AMD says Dell and Dixons are Intel monopoly victims

AMD WHEELED in its chief lawyer Tom McCoy and other senior lawyers to give an overview of its legal actions against Intel, worldwide.

The CPU was so important for the whole industry because the X86 now dominates the microprocessor market, and there was only an effective choice between two suppliers. Three if you count Via, naturally.

McCoy is not a marketing guy but he came out with some interesting allegations, including that Intel had bought the retail market in Media Markt, and that Chipzilla was leading its customers over the edge.

He said that Intel provided German firm Media Markt between $15-$20 million of marketing MDF (money) and that there were pressures on the UK firm DSG, which runs Dixons and PC World too.

He claimed that Dixons, which doesn't seem to feel victimised according to recent reports, is a victim in a monopolistic prison where people are afraid to break out. He said that even Dell is a victim and no one wants to be a hostage to a monopoly.

McCoy said that IBM realised in 1981 that the processor was going to be the soul of innovation for PCs and as IBM originally set up its business model it envisioned there would be second sources with AMD being one of these companies.

He said: "We've seen AMD play that role sometimes with excellence and sometimes behind Intel but now we're enjoying an advantage."

He said: "Why would any business want to choose a monopoly supplier. Why do we see Intel buying out retail channels, like it did with Media Markt in Germany. Why is Intel so intimidating and why do you have such courage to stand up on the world stage and say you're going to support it. "

There was more to come. He asked: "Why is it we have had this monopoly for so long. Why is it there are only two companies in the world that can build X86 leading edge processors, and where are these monopolies going. X86 is becoming more ubiquitous and if we're going to have innovation it's going to be that standard. "

Left, Sue Snyder, AMD exec legal counsel
Right, Tom McCoy, head legal VP

McCoy said it was legal for a company to have more than 40 per cent of market share, but not to abuse that position.

He claimed Intel wants to get into every single sector with its CPUs, but Microsoft's operating margins show its monopolistic tendencies are in decline.

Dell's operating margins exhibited discrimination in the system influenced by Intel. HP provides the richest mix of products in the industry and provides good profits which Intel then shunts to Dell.

He said the industry was a weak industry and Intel has come up with a scheme with marketing tools to keep it that way and that's how it comes up with its deals.

He said that AMD considered the European Commission investigation into Intel's alleged antitrust activities to be a very serious matter. The number of consumer class actions filed against Intel after AMD filed its antitrust action had slowed the process down. McCoy hopes it will come late 2006 or early 2007.

Intel's not present here in Fab 30 to respond to these claims but we will ask what it thinks of this presentation by Mr McCoy. µ