AMD Says Koreans Raided Intel Offices In Antitrust Probe

Advanced Micro Devices Inc. stepped up the rhetoric in its antitrust battle with rival Intel over alleged monopolistic practices on Thursday, issuing a press release stating that the Korean Fair Trade Commission conducted "dawn raids" on Intel offices in that country. And AMD chairman and chief executive Hector Ruiz told the U.S. House of Representatives that antitrust laws needed to be enforced to ensure "fair and open competition."

Ruiz testified before the House committee on government reform on the competitiveness of U.S. companies in world markets. "We have a responsibility to ensure no one is sheltered from competition," he said. "That means that the enforcement of antitrust laws … is critical to the creation of a sustainable competitive society."

A study conducted by the California Institute of Technology in 2004, and commissioned by AMD, shows that nearly 70% of all federal procurements of computer hardware contained language that required the use of a specific brand of microprocessor, a policy that cost taxpayers between $281 million and $563 million, Ruiz testified.

Meanwhile, Korean officials conducted a raid of Intel offices in Korea as part of an investigation into Intel's business dealing with four South Korean PC makers, AMD said.

Intel described the events differently. "There was a visit to our offices in Korea, but to characterize it as a dawn raid is a mischaracterization," a spokesman said. Intel disclosed in June that the KFTC was conducting an investigation, and the company has cooperated, he said.

"It is not unusual for regulatory agencies to look at successful companies, and [Intel is] extremely successful," he said. "We're cooperating [in Korea] much like we do with regulators around the world."

The Intel spokesman also said that the report on government PC procurements "is a study that [AMD] paid for, and we have no additional comment."

In June, AMD filed an antitrust complaint in U.S. federal court alleging Intel has used coercion and illegal payments to force PC makers and retailers to either exclude the use of AMD processors or severely limited their availability. That suit was quickly followed by similar court action in Japan.

In a response filed in September, Intel said AMD's problems in competing are a "direct result of AMD's own actions or inaction," and was not the result of any illegal action by Intel. AMD's position in the marketplace "reflects its uneven track record, and its repeated failure to deliver on its promises," the response states.

AMD alleges that Intel's anticompetitive practices have kept an artificial lid on its ability to grow its position in the PC market. Since filing the lawsuits, AMD has seen its share of the x86 microprocessor market continue to grow, with the company shipping more than 21% of all x86 processors in the fourth quarter of 2005, according to Mercury Research. More AMD-based PCs than Intel-based PCs were shipped to U.S. retail outlets during certain months late last year.