Advanced Micro Devices yesterday ran a full-page advertisement in several major North American newspapers urging readers to familiarize themselves with its 48-page complaint against Intel Corp’s alleged anti-competitiveness.
You may not be aware, but Intel’s illegal actions hurt consumers — everyday, read the ad, which mostly is a 350-word letter from AMD chief Hector Ruiz. Computer buyers pay higher prices inflated by Intel’s monopoly profits.
By taking its case to the people, AMD arguably may pique investor interest and raise its market profile.
At the same time, these antics may force AMD into a precarious legal act. If the company’s suit were unsuccessful in court, there would be no penalty against AMD. But when it makes those allegations in a public forum, it potentially bears itself to a libel suit from Intel.
Is this a lawsuit or a publicity stunt? said Gartner analyst Martin Reynolds. This is going to make the lawsuit a little less easier to run with… The judge is going to wonder why was being tried in the court of public opinion before it comes to him.
Intel declined comment on the newspaper ads.
AMD’s public display also may spook potential plaintiffs in the case, including the 12 PC makers, the dozen distributors and 17 retailers cited in the lawsuit as having been bullied by Intel. They include Dell, HP, IBM, Best and Circuit City.
Given the way AMD is promoting the suit, there is a concern [OEMs] may run out and hide, Reynolds said.
AMD’s public displays likely would not bolster the confidence of OEMs in their future dealings with Intel, he said.
AMD spokesman Eric DeRitis said the company ran the one-time ads in select newspapers to inform the computer industry, as well as AMD partners and customers of the suit. He said the lawsuit likely took some of these parties by surprise and AMD wanted to get its point across that this is a complex issue and provide more detail, DeRitis said.
This is one of a variety of different ways to show them why we’re [suing], why it’s important and what it can mean in terms of the industry, he said.
Ruiz also has been personally calling key customers and partners to elucidate matters and answer questions, DeRitis said. (Sagely, AMD’s legal counsel also participated in these calls.)
Ruiz called companies cited in the complaint first, DeRitis said. Ruiz did not pointedly discuss documentation of Intel’s alleged bullying tactics, but if they chose to bring that into the conversations, that’s completely fine, DeRitis said. Such documentation would likely be key courtroom evidence.
DeRitis confirmed there had yet been no response from OEMs on their involvement in the lawsuit.
On why AMD’s complaint is written in such user-friendly language – as opposed to the clunky legalese usually employed for court filings – DeRitis said this was not necessarily intentional. Since the suit directly quotes other companies who allegedly complain about their dealings with Intel, DeRitis said the document being easy to read is testament to the validity of its claims.
Still, it seems difficult to fathom that Ruiz’s comments in the newspaper ads, Read our complaint. Demand innovation. Choose fair and open competition would ordinarily roll off his tongue.
Analyst Reynolds’ points out the complaint itself Doesn’t look like it was written for a judge.
The price of AMD stock fell nearly 2% yesterday to close at $17.37. The stock’s price then edged up to $17.54 after the bell.
Wall Street analyst Tim Luke said the move to sue Intel was generally positive for AMD in terms of raising its market profile and, irrespective of the merits of this case, we recognize that it may adversely impact sentiment and increase scrutiny longer-term toward Intel’s actions. Luke, who works for Lehman Brothers, is neutral on AMD stock.
Intel’s share price closed yesterday at $26.25, down slightly from the previous days’ close. The stock also rallied upwards in after-hours trading to $26.33.
Separately, Intel chief executive Paul Otellini yesterday broke his silence on AMD’s lawsuit.
Intel has always respected the laws of the countries in which we operate, Otellini said, in a statement. We compete aggressively and fairly to deliver the best value to consumers. This will not change.
Over the years, Intel has been involved in other antitrust suits and faced similar issues. Every one of those matters has been resolved to our satisfaction. We unequivocally disagree with AMD’s claims and firmly believe this latest suit will be resolved favorably, like the others.
AMD’s ads ran yesterday in mainstream papers The New York Times, The Wall Street Journal and The Washington Post. AMD also targeted the area where its main US-based chip plant is based, in Austin Texas, as well as in Silicon Valley, where AMD and Intel are headquartered.
Political lobbyists also had a chance to see the ad in Washington, DC’s The Hill and Roll Call.
