In a landmark ruling by the European Commission today, Intel was found guilty of antitrust violations and was fined 1.06 billion Euros (US$1.44 billion). Intel was also ordered to stop its illegal practices which include paying PC manufacturers to delay or cancel altogether production of AMD-based PCs and improper rebate practices as a reward for using Intel CPUs.
Intel continues to deny any wrongdoing even though this is the third conviction they’ve been hit with regarding antitrust behavior. “Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years,” said EU Competition Commissioner Neelie Kroes. “Such a serious and sustained violation of the EU’s antitrust rules cannot be tolerated.”
Given their convictions in Japan in 2005 and South Korea in 2008 this third conviction seems to set a trend. As the global economic downturn continues its march across the wallets of consumers, this ruling enforcing fair competition couldn’t have come at a better time.
While consumers are certainly on the top of the list of winning parties, AMD is the company that will be leading the charge, or lack thereof, by now being allowed to compete in a fair marketplace. As is the historical norm between these two, it will be AMD that drives the market to additional savings for consumers.
Nigel Dessau, Senior Vice President and Chief Marketing Officer has joined us today to offer some additional insight from AMD’s point of view on how today’s ruling will affect AMD’s business moving forward. Nigel is responsible for AMD’s global marketing, image and campaign strategy.
Thanks very much, Nigel, for taking time out to answer some questions today. I’m sure your phone is ringing off the hook.
AlienBabelTech: The EU ruling against Intel carries a 1.04B Euro fine with it. What happens with this money? Is it paid out class-action style to consumers and businesses that purchased Intel CPUs, entered into the EU general fund and/or will AMD be awarded any of it?
Nigel Dessau: The EC will determine what happens with the money as is typical for this type of action. Frankly we’re more concerned that Intel stops doing what it’s not supposed to be doing so we can get on with the business of having a free and open market place.
AlienBabelTech: Obviously AMD will be better able to increase their market share with the reduction of Intel’s ability to illegally inhibit competition. How prepared is AMD for increased production and how soon should we expect to see AMD’s market share increase?
Nigel Dessau: The process we’ve gone through with Global Foundry was designed to do exactly that, allow us to better respond to demand. We are fully prepared to meet an increase in demand with a corresponding increase in production.
AlienBabelTech: What are the top three action items for AMD to execute on related to this ruling?
Nigel Dessau: The first thing to do is talk to OEM, ODM and retail partners to make sure they know what Intel was doing is illegal and that they are now free to engage with us based on demand and a normal business model. They have been a victim of Intel monopolistic practices as much as AMD.
Next would be to double down on the Delaware case that is ongoing. If your next door neighbor has been the victim of a crime, it’s still a crime even though it wasn’t your house that was broken into. We have the same kind of activities going on in the US that have yet to be addressed.
Finally we need to keep innovating. We want to drive to a 50% market share as one would expect in a standard duopoly and with each anti-trust ruling against Intel we come one step closer to having the opportunity to achieve that.
AlienBabelTech: What impact might this have on business in the US and other parts of the world?
Nigel Dessau: More and more markets have moved to a position where the consumer has the power to dictate when, where and how much [as that applies] to their goods and services. We are finally seeing that achievement happen in the tech industry as well. MediaMarkt was paid to delay or not carry at all AMD-based PCs that there was no option at all for consumers to purchase at all. This ruling will allow consumers the ability to make their own choices about what they buy rather than allowing one company to dictate what is available.
AlienBabelTech: Finally, what impact is this ruling having on general moral at AMD? If I were to walk down the halls would I be ducking party favors and hearing people sing Auld Lang Syne or is there just a quiet sense of the calm before the storm as AMD sales worldwide redouble their efforts?
Nigel Dessau: This is definitely a checkmark in the win column for us and it certainly feels good to have other people know what we know. There is an air of excitement internally that we now have a chance to take AMD to a place it’s never been before. The football is on the ground and now it’s up to us to kick it in the right direction.
Nigel thanks so much for taking the time to give us AMD’s point of view on this. We wish you and AMD all the luck and look forward to seeing what you come up with next.
For more information about Nigel and to see his thoughts on other topics, visit his blog at http://blogs.amd.com/nigeldessau/.
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