M$ May Be An Unwitting 'Ally' In AMD Lawsuit Vs. Intel

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Intel archrival Advanced Micro Devices (AMD) sued the chip giant on June 27, saying the No. 1 chipmaker coerces its customers to use only Intel chips. AMD filed a similar suit in Japan three days later.

Observers are used to archrivals AMD and Intel taking potshots at one another. But this lawsuit might well have heft, says a former Federal Trade Commission official.

David Balto, a former FTC policy director, says the AMD case coupled with the Justice Department antitrust settlement with Microsoft could prod U.S. regulators to take another look at Intel.

Microsoft and the department reached a settlement in their landmark case in 2002, but Balto and others say it can take a suit to regenerate interest.

Complaints from Sun Microsystems, Netscape and others sparked the Justice Department to sue Microsoft in 1998.

The Federal Trade Commission, in fact, looked at Intel in 1999, but the Microsoft case was still pending.

"A lot of the facts (about Intel's practices) were true five years ago when the FTC looked at Intel," Balto said. "But the law wasn't as good then."

Balto worked for the FTC when it investigated Intel for possible antitrust activities. Intel settled out of court, admitting no guilt.

In Tuesday's conference call with analysts to discuss its latest quarterly results, Intel Chief Executive Paul Otellini took the rare step of referring to a pending legal case.

"I want to be absolutely clear about where Intel stands," Otellini said. "Intel competes aggressively and fairly around the world. This formula has led to Intel's success and it will not change.

"We unequivocally disagree with AMD's claims and are confident this latest suit, like the others, will be resolved favorably to Intel."

With the AMD suit, what's at stake for Intel is its ways of giving incentives to customers.
If federal agencies get involved, the stakes naturally go up.

Even without the AMD suit, the stakes for Intel seem to have risen, thanks to actions in Japan and Europe.

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