Did Intel Use MDFs To Put The Whammy On AMD In Germany?


That appears to be the question at the heart of a raid on Intel's Munich office by European Commission (EC) and German Federal Cartel investigators. Intel Tuesday said it is cooperating with both the European Commission (EC) and German Federal Cartel but refused to comment on what it called "the substance of this investigation."

The EC, which formally charged Intel with anti-competitive practices last July, is investigating claims that Intel used Market Development Funds (MDFs) or rebates to European OEM partners and retailers in exchange for limiting CPUs from rival chipmaker Advanced Micro Devices.

Intel has battled charges for years that it has used anticompetitive actions to stop OEMs and retailers from selling AMD based systems. AMD, in fact, has claimed that Santa Clara, Calif.-based Intel offered "rebates" to OEMs in exchange for maintaining the use of competitors' chips at just 10 percent of their mix or less. "We can confirm that our office in Munich was inspected by investigators from European Commission as well as investigators from the German Federal Cartel office," said an Intel Spokesperson. "As is our normal practice Intel is cooperating with the investigators. Investigations of this nature are confidential. So Intel will not comment on the substance of this investigation."

The Intel spokesperson said the company has already denied claims related to an AMD lawsuit in 2005 that it has violated any laws related to using MDFs.

Sponsored post

The European Commission investigation comes on the heels of an antitrust investigation launched in January by New York Attorney General Andrew M. Cuomo. That probe centers of charges that Intel allegedly coerced customers to exclude AMD from the worldwide x86 CPU market, a $30 billion global market for which Intel holds 90 percent of the revenue and 80 percent of the volume.

AMD, for its part, has claimed in the past that Intel offered "rebates" to OEMs in exchange for maintaining the use of competitors' chips at just 10 percent of their mix or less.

The New York Attorney General has served Intel with subpoenas seeking documents and information concerning its pricing practices and its possible attempt to exclude competitors through market domination. The attorney general's office is looking into whether Intel penalized customers, mostly computer manufacturers, from purchasing x86 CPUs from its competitors; improperly paid customers for exclusivity; and illegally cut off competitors from distribution channels.

"None of this matters to me as long as we continue to get our high quality Intel processors that never stop working," said Tom Derosier, co owner The CPUGuys, a Hanson, Mass. system builder and Intel partner. "We don't use any AMD chips and it's definitely not because of Intel MDFs. In my professional opinion building systems for the last 13 years there is only one chip that goes in any box that I'm responsible for: Intel."

Derosier said he views the constant claims that Intel engages in anticompetitive actions as marketing noise that does not directly affect his business.

As for the recent decision by Dell to no longer sell AMD consumer based systems online, Derosier said he is disappointed because he sees a steady stream of AMD-Dell based systems that he must repair at his shop. "Part of the reason we see those AMD systems in our shop is because it is a lower-end model," he said.