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AMD: A Helping Hand from Japan?

A legal victory in Japan may have given Advanced Micro Devices (AMD) a leg up in an antitrust case against archrival Intel (INTC). The ruling, issued on Dec. 16 by the Tokyo District Court, releases information gathered by Japan's Fair Trade Commission (JFTC) in its case that found Intel violated Japanese antimonopoly laws. Much of the evidence was collected from raids on Intel's Japanese offices by investigators there.

AMD is hoping the information will add ammunition to its blockbuster antitrust case against Intel in the U.S. AMD sued Intel in U.S. District Court in Delaware on June 28, accusing the world's largest chipmaker of a "pervasive, global scheme to coerce Intel customers from freely dealing with AMD to the detriment of customers and consumers worldwide" (see BW Online, 6/28/05, "AMD Hauls Intel Back to Court").

Much of the behavior detailed in AMD's complaint is thought to resemble the types of actions considered central to the Japanese case. Exactly what's contained in the documents is still unknown, but according to a person familiar with the matter, documents now subject to disclosure may include copies of contracts between Intel and several major Japanese PC makers.

SENDING A MESSAGE? Based on the evidence gathered, the JFTC ruled against Intel in March. At the time, AMD described the Japanese case as proof that Intel had a pattern of behaving like a monopolist.

"This is the stuff on which the JFTC based its decision that Intel was violating Japanese law with regard to antitrust," says Nathan Brookwood, an analyst at Insight64 in Saratoga, Calif. "It has got to be pretty compelling."

AMD wasted no time declaring the ruling a victory. "Today's court ruling sends the message that the truth about Intel's illegal monopoly abuse will soon see the light of day," said Thomas McCoy, AMD executive vice-president for legal affairs, in a written statement.

FLOOD OF DOCUMENTS. Intel has said it would abide by the JFTC's ruling but says it disagrees with the findings. Intel spokesman Chuck Mulloy dismissed AMD's interpretation. "Once again, AMD has mischaracterized the impact of a procedural ruling, which does not address the validity of AMD's complaint in any way," he says. "This ruling does not specify which documents should be turned over to the court, nor does it say which ones should or will become public. There will be many more procedural steps in this case."

Intel argued against the disclosure, saying it wanted to protect its confidential information and that of its customers, Mulloy says. "In the American litigation alone, literally millions of pages of documents will be exchanged," he says. "AMD's claim of Intel's hiding documents is absurd."

U.S. courts occasionally find legal findings from foreign courts useful, observes David Balto, former policy director at the U.S. Federal Trade Commission during the Clinton Administration and now an antitrust litigator with the Washington (D.C.) firm of Robins Kaplan Miller & Ciresi. "Sometimes what a foreign antitrust regulator [uncovers] can affect how a U.S. judge sees the case," Balto says. He cited one case brought against Visa and Mastercard, the credit card consortiums, which was based in part on allegations of exclusionary behavior by regulators in the European Union.

"WELL PUT-TOGETHER CASE." Balto, who is not involved with either side of the case, notes that getting the JFTC information released to the public may strengthen AMD's case, but he says AMD's case already looks strong. "I think AMD's complaint raises some very serious issues," he adds. "AMD has a very well-put-together case. In 20 years, I have never read a better complaint."

On Dec. 16, Intel's shares slipped 20 cents, to $26.38. AMD prices were up 27 cents, to $28.17. AMD was buoyed in part by the positive legal news and by the IPO of its former flash-memory division Spansion (SPSN), which debuted on Dec. 16 at $12 per share. Spansion shares rose $1.48 -- more than 12% -- in their first day of trading.

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