Intel's Refusal to Acknowledge JFTC Facts Causes Concern Among Competitors and Consumers

Strategic Insights -

AMD today expressed concern over Intel's refusal to accept responsibility for its actions following the Fair Trade Commission of Japan's (JFTC) ruling on its violation of Section 3 of Japan's Antimonopoly Act. Despite being found guilty of deliberate and systematic anti-competitive behavior, Intel has failed to acknowledge the harm it has caused to competitors and consumers. The JFTC Recommendation found that Intel used illegal tactics to stop AMD's increasing market share by imposing limitations on Japanese PC manufacturers, ultimately leading to a decline in the combined Japanese market share of AMD and a second CPU company from 24% in 2002 to 11% in 2003.

Key Takeaways:

  • Intel K.K. was found guilty of violating Section 3 of Japan's Antimonopoly Act by the Fair Trade Commission of Japan (JFTC) on March 8, 2005.
  • The JFTC found that Intel used illegal tactics to stop AMD's increasing market share in Japan by imposing limitations on PC manufacturers.
  • Intel was found to have conditioned rebates on the exclusive use of Intel CPUs in specific PC product lines or brands, eliminating competitor CPUs from key OEM brand lines.
  • Intel's "Intel Inside" program, market development funds, and other rebate programs were used to lock-in OEMs and prevent them from doing business with Intel's competitors.
  • The JFTC imposed a number of restrictions on Intel, including ending the use of rebates and other funds to distort competition.
  • Intel accepted the JFTC's Recommendation, but failed to acknowledge responsibility for its actions or admit harm to competitors and consumers.
  • The European Commission is investigating Intel for possible similar anti-competitive business practices in Europe.

Statistics:

  • 24%: The combined Japanese market share of AMD and a second CPU company in 2002 prior to Intel's anti-competitive behavior.
  • 11%: The combined Japanese market share of AMD and a second CPU company in 2003 after Intel's anti-competitive behavior.
  • 10%: The percentage of non-Intel CPU purchases that one Japanese manufacturer was forced to curtail.
  • 100%: The percentage of CPU purchases that another Japanese manufacturer was required to buy from Intel.

Sources:

  • AMD statement regarding Intel's refusal to acknowledge JFTC facts and harm caused to competitors and consumers.
  • Fair Trade Commission of Japan (JFTC) Recommendation, issued on March 8, 2005.
  • European Commission statement regarding investigation of Intel for possible anti-competitive business practices in Europe.
  • Business Wire news release dated March 31, 2005.