System Builders Weigh In On Intel's Alleged Antitrust Actions

Some system builders monitoring a federal antitrust lawsuit brought against Intel had their own tales of pressure from the chip giant to exclude products from Advanced Micro Devices, but others say they never felt coerced in any way.

New York Attorney General Andrew Cuomo on Wednesday filed a federal antitrust lawsuit that alleges Intel violated antimonopoly laws in order to maintain its supposed monopoly power and profit margins in the microprocessor market. Specifically, the lawsuit alleges that Santa Clara, Calif.-based Intel used "special rebates" and other means to pressure top computer makers like Dell, Hewlett-Packard and IBM to exclude or drastically limit the use of AMD processors from roughly 2000 to 2006.

The evidence in the case includes internal e-mails from HP and Dell executives that refer to alleged plans by Intel to punish those two companies for signing on with Sunnyvale, Calif.-based AMD to use its Opteron and Athlon processors, which by some accounts were superior to Intel's own products during the time in question.

One system builder said that in the early part of the decade, at the same time that Intel was allegedly pressuring Dell and HP, Intel also put pressure on his business to not sign on with AMD.

"Intel routinely told us, 'Don't do that deal,' " the system builder said.

But other builders of white-box systems -- a distribution channel of Intel and AMD products that is not directly addressed in Wednesday's lawsuit -- said they never experienced such things.

Glen Coffield, president of SmartGuys Computers, a five-store system builder chain based in Lake Mary, Fla., said he has never felt pressured by Intel to build only Intel-based systems.

"I'm not big enough to make a difference [for Intel or AMD]," he said. "And I have just the kind of personality that anybody that knows me knows it wouldn't do any good to pressure me. I don't succumb to pressure."

As far as Coffield is concerned, the only difference between Intel and AMD is that he has an Intel channel sales rep assigned to his business.

Still others said the lawsuit reminded them of a time when AMD had the opportunity to be a much bigger player than it is today.

Todd Swank, vice president of marketing at Nor-Tech, a Burnsville, Minn.-based system builder, said AMD's processors at one time had better performance and ran cooler than Intel's products, and as a result AMD was growing in the early 2000s.

But in Swank's opinion, AMD's problems with maintaining growth were self-inflicted rather than caused by alleged pressure by Intel, at least as far as Nor-Tech was concerned. He claimed that AMD's 2006 acquisition of graphics chip maker ATI Technologies and a distribution deal with Dell signed that same year were more likely causes of AMD's fiscal and channel struggles, respectively.

"They did everything they shouldn't have done, and then started complaining about Intel," Swank said. "Intel was always working within the rules with us. But I remember when AMD was [doing really well], and we would throw it in Intel's face and say, 'See what AMD is doing?'

"And we liked AMD because at that time it was not working with Dell."

DAMON POETER & STEVEN BURKE contributed to this story.

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