Fair Trade Commission of Japan's Ruling That Intel Violated Antimonopoly Act@ 2005/04/01
Intel's Refusal to Acknowledge JFTC Facts and Harm Caused to Competitors and Consumers is Disturbing
SUNNYVALE, Calif., Mar 31, 2005 (BUSINESS WIRE) -- AMD (AMD) released the following statement today regarding Intel K.K.'s ("Intel") acceptance of the Fair Trade Commission of Japan's (JFTC) March 8, 2005 ruling on its violation of Section 3 of Japan's Antimonopoly Act:
"It is unfortunate that even when presented with specific -- and very disturbing -- findings of deliberate and systematic anti-competitive behavior, Intel refuses to face the facts and admit the harm it has caused to competitors and consumers," said Thomas M. McCoy, AMD executive vice president, legal affairs and chief administrative officer. "Although Intel's willingness to comply with the JFTC Recommendation is a step in the right direction, it has conspicuously failed to either accept responsibility for its actions or acknowledge that competition is best served when customers and consumers have a choice. The JFTC determined that Intel conditioned its pricing based on customers not doing business with competitors; governments around the world must ensure that such anti-competitive actions are not impacting their markets as well."
Issued on March 8, 2005, the JFTC Recommendation found that Intel has abused its monopoly power to exclude fair and open competition, thereby violating Section 3 of Japan's Antimonopoly Act. These findings reveal that Intel used illegal tactics to stop AMD's increasing market share by imposing limitations on Japanese PC manufacturers. Specifically, the JFTC found that:
-- Some manufacturers were required to buy 100 percent of their CPUs from Intel; another manufacturer was forced to curtail its non-Intel purchases to 10 percent or less;
-- Intel separately conditioned rebates on the exclusive use of Intel CPUs in specific PC product lines or brands in order to eliminate competitor CPUs from key OEM brand lines;
-- Intel's activities in Japan include the use of its "Intel Inside" program, market development funds and other rebate programs. Intel's tactics lock-in OEMs and prevent them from doing business with Intel's competitors.
The Recommendation reveals that Intel imposed these restrictions in direct response to AMD's growing market share in Japan from 2000-2002. The Recommendation also notes that as a result of this misconduct, the combined Japanese market share of AMD and a second, much smaller CPU company fell from 24 percent in 2002 to 11 percent in 2003.
The JFTC imposed a number of restrictions on Intel including ending the use of rebates and other funds to illegally distort competition, notifying its customers and educating its employees that it may no longer provide rebates and other funds to Japanese computer manufacturers on conditions that exclude competitors' CPUs.
Intel had ten days to either comply with or appeal this ruling and requested a two week deadline extension. Intel elected to accept the Recommendation which means that the company will need to alter business practices and implement other remedies immediately to meet the guidance in the Recommendation.
The European Commission recently stated that it is investigating Intel for possible similar anti-competitive business practices in Europe and is cooperating with the Japanese authorities.
AMD's Position on Fair and Open Competition
AMD stands for fair and open competition and the value and variety competition delivers to consumers. Businesses and consumers should have the freedom to choose from a range of competitive products that come from continuous innovation on a level playing field where everybody plays by the same set of rules. When market forces work, consumers have choice and everyone wins.
Intel Agrees to Comply with JFTC Recommendation; Disagrees with Findings of Fact
SANTA CLARA, Calif., Mar 31, 2005 (BUSINESS WIRE) -- Intel Corporation today announced that its Japanese subsidiary, Intel K.K. (IJKK), is accepting a Recommendation from the Japan Fair Trade Commission (JFTC) dated March 8, 2005. Although IJKK accepts the Recommendation, the company does not agree with the facts underlying the JFTC's allegations and the application of law in the Recommendation. IJKK continues to believe its business practices are both fair and lawful, but the company believes that the cease and desist provisions of the Recommendation will not impair it from continuing to meet customer requirements.
"Intel respectfully disagrees with the allegations contained in the Recommendation, but in order to continue to focus on the needs of customers and consumers, and continue to provide them with the best products and service, we have decided to accept the Recommendation," said Bruce Sewell, vice president and general counsel for Intel. "We believe the Recommendation's cease and desist provisions define a workable framework that enables us to continue to provide competitive pricing to our customers, and benefits consumers and the Japanese economy. We do not accept the Recommendation's allegations in its fact findings and the application of law. We believe the allegations misinterpret important aspects of our business practices and fail to take into account the competitive environment within which Intel and its customers compete."
Intel, the world's largest chip maker, is also a leading manufacturer of computer, networking and communications products. Additional information about Intel is available at www.intel.com/pressroom.