Intel called on to admit monopolistic practices

Globalfoundries chairman issues challenge to Intel to acknowledge that it has used anticompetitive practices to strengthen its position in the market.

The chairman of Globalfoundries, the microchip manufacturer majority owned by Abu Dhabi investors, has called on Intel, the world's largest chip maker, to acknowledge that it has used anticompetitive practices to strengthen its position in the market. Hector Ruiz, who ran AMD, the world's second-largest chip maker and Intel's main competitor, before moving to Globalfoundries, issued the challenge in a strongly worded commentary published by MarketWatch, a financial website.

"Faced with an avalanche of evidence supporting adverse antitrust verdicts in Europe, Japan and South Korea, Intel nonetheless refuses to find a way in which, in the new order of competition and innovation, it could prosper," Mr Ruiz said in the piece, published last week. The comments came during a week when the EU released internal documents from companies doing business with Intel and AMD, which it acquired during an investigation into allegations of anticompetitive actions in the microchip market.

The e-mails illustrate concerns among Intel customers that they could suffer financially, through the loss of incentive payments, if they expanded their purchasing from AMD, whose largest shareholder is Abu Dhabi's Mubadala Development. One such e-mail, sent to colleagues by an unnamed executive at Lenovo, a computer maker, said: "Late last week, Lenovo cut a lucrative deal with Intel. As a result of this, we will not be introducing AMD-based products in 2007 for our notebook products."

In another e-mail released to the public, an internal company presentation at Dell, the world's largest computer market, warned that if the company increased its purchasing from AMD, the retaliation from Intel "could be severe and prolonged". In response to the release of the documents, Intel said the EU was demonstrating the "underlying bias we have come to expect from the case team that ran this investigation".

It said the documents were produced by "lower level employees that did not participate in the negotiation of the relevant agreements". Intel was fined more than ?1 billion (Dh5.39bn) by the EU in May for "deliberately acting to keep competitors out of the market for computer chips for many years", the EU competition commissioner said in a statement announcing the decision. The company is appealing against the fine, which at the time was the largest in EU history.

In the week that the fine was issued, the AMD chief executive, Dirk Meyer, also had strong words for his biggest competitor. "Since 2001, and until very recently, I have seen instances where Intel's business practices have locked us out of opportunities in the marketplace," Mr Meyer said during a visit to Abu Dhabi. "Business practices akin to paying customers not to do business with us, either outright paying not to do business with us anywhere, or not to do business with us in specific product segments, or end user segments, or geographic segments.

"It has unreasonably caused us not to grow our business. It was true in 2001 and it is still true today in various forms." [e-mail]