A Chat with AMD's Hector Ruiz
The Sept. 17 antitrust ruling against Microsoft (MSFT) by the European Court of First Instance will have ripple effects on other companies and other cases. Chief among them: the EC Competition Directorate's investigation into whether chipmaker Intel (INTC) has abused its dominant position to harm Advanced Micro Devices (AMD) and restrict consumer choice in the marketplace. AMD Chief Executive Hector Ruiz recently spoke to BusinessWeek's Jennifer L. Schenker about one of Silicon Valley's longest-running disputes.
You are a U.S. company and you have a dispute with Intel, another U.S. company. Why did you bring the case to European regulators?
In early 2000 we recognized that despite having had phenomenal innovations in technology, we were failing to get our customers [PC makers] to participate and benefit from them and to take those innovations to market. I made a decision after launching the Opteron [chip] that we would do everything we could around the world. The places where Intel's illegal practices are so blatant happened to be Europe, Japan, and Korea, so we embarked on a multiprong strategy to make those regulatory agencies aware of all that is happening
In what way are Intel's business practices hurting consumers, as you claim?
We have demonstrated over the last five years that every major innovation has come out of AMD, not out of Intel. But when these technologies are not able to reach the consumer then a phenomenal amount of competitiveness is not reaching the marketplace. For consumers to benefit from technology there has to be fair and open competition. Fair and open competition is the only course we know that can lead to meaningful innovation.
Intel has about 80% of the market and AMD about 20%. When you introduced the Opteron for servers about five years ago, it was widely seen as having technological advantages over Intel's offerings. Why haven't you been able to grab more market share?
There is no question our market share today would be significantly higher if we had not been held back by Intel's practices. It is strongly believed that we would be twice as large as we are—at a minimum—based on our innovation, efficiency, and leadership.
Do you think the outcome of the Microsoft case will help AMD's case?
The Microsoft ruling was product-focused, so from that point of view the cases are different. Our case is more about business practices that inhibit AMD's ability to take products to market. But as in the Microsoft case, mature regulatory agencies around the world have a string of concerns about business practices that limit consumers' choices.
How and when will AMD's long-running legal battles with Intel end?
The civil case is supposed to be decided in early 2009; we are going through the heavy-duty process of discovery. If you listen to the drumbeat around the world, in every single case—Korea, Japan, the EU—Intel has lost every single one. Frankly, their behavior has not changed, they keep thumbing their nose at all these people because they think they are in the right. I think this will culminate in action against them in the civil case.
Unfortunately, it takes longer than it should, and as a result continues to do harm to AMD. That harm will have to be taken into account in the civil case judgment. We are a global company: 80% of our business is outside of the U.S. I believe there is a consistency, a corroboration by regulatory agencies around the world that we are right. And I believe we will prove in the U.S. civil court that we are right, too.