The JTFC said Tuesday that Intel contrary to the public interest, has substantially restrained the competition in the market of CPUs sold to the Japanese OEMs, by acting to exclude Intel’s competitors’ business activities related to the sales of CPUs.
The claims relate specifically to deals inked between Intel KK, the chip giant’s Japanese subsidiary, and five Japanese OEMs. The regulator says Intel offered lower processor prices if the OEMs eliminated or reduced purchases from main rival Advanced Micro Devices.
The watchdog expects to force Intel to quit the practices in question. Intel said it believes it has acted in a fair and lawful manner and has ten days to respond to the recommendation before the JFTC decides whether to pursue the matter further.
An Intel spokesperson said that while the deals in question may have been made in Japan, the OEMs’ end products are sold globally, which means the implications could be broader than Intel’s practices being regulated in Japan.
Not only is Intel a global company, but the customers they’re talking about are global companies, the spokesperson said. This could have an impact on consumers in many countries.
Intel is also upset with the way it says the decision was made, with competitors mainly in mind rather than consumers. While this may or may not be the way things are done in Japan, Intel said it does not appear to take into account antitrust principles commonly accepted worldwide.
There is a broad consensus that competition regulators should only intervene where there is evidence of harm to consumers, said Intel general counsel Bruce Sewell. It is apparent the JFTC’s Recommendation did not sufficiently weigh these important principles.
The six-page English translation of the ruling does not mention consumers directly. But Intel is not suggesting that the JFTC is not accurately enforcing Japanese law, merely that its recommendations would probably not fly in the US or Europe.
The JFTC says that Intel saw in 2002 that AMD’s market share had risen in Japan from 17% to 22% over two years, and then decided to restrain OEMs from adopting competitors’ CPUs for all or most of the PCs manufactured and sold by them.
In some cases, Intel made the OEMs adopt Intel in 100% of their boxes, the report says, in others, the OEMs could buy 10% of their chips from AMD and other rivals. In 2003, Intel got its market share up to 89%, the JFTC said.
AMD, naturally, welcomed the Japanese ruling, and called on antitrust regulators around the world to take note, saying: Efforts by an avowed monopolist to artificially set market shares to exclude competition clearly violates antitrust standards globally.
AMD’s Thomas McCoy, executive vice president of legal affairs, said: The evidence of harm to consumers is obvious. By preventing PC manufacturers from using CPUs of their choice, Intel’s misconduct deprived consumers worldwide of the freedom to purchase computers that best fit their needs.
