Hector Ruiz, CEO of AMD hit out at his company’s rival, Intel during a speech at the American Antitrust Institute National Conference – claiming that its anti-competitive strategies are hurting the industry and consumers.
Ruiz started by emphasising that AMD was not another "whining competitor" and that "My purpose is not to argue for competitive advantage – we know how to compete…I want to give you an idea of what it’s like to do business day in and day out when you are competing against an abusive monopolist."
At the heart of the problem, claims Ruiz, is Intel’s rebate program. Due to small margins in the highly competitive market, many computer manufacturers rely heavily on them in order to make a profit.
"Computer manufacturers are dependent upon Intel’s ‘rebates’ for a large portion of their razor-thin operating margins and must sacrifice their brand in favour of promoting Intel," Ruiz said yesterday.
Ruiz went as far as to boldly state: "Intel uses illegal tactics explicitly aimed at preventing customers from doing business with AMD."
It wasn’t a statement that he didn’t back up either. Citing examples of HP and Dell, he said that HP had told him they couldn’t purchase or use AMD chips because of the fear of retribution from Intel. While in the case Dell he reminded listeners that it is currently facing a class action lawsuit from its own investors over claims of "secret and likely illegal" payments from Intel to not sell PCs with AMD processors in them.
"The IT industry is being held hostage by Intel – a fact that has detrimental effects across the board, and it has gone on for too long,” continued Ruiz. “Customers get hit by less choice and PC manufacturers become dependent upon rebates."
Ruiz also added that Europe, Korea and Japan were all investigating or had investigated alleged underhand tactics used by Intel, with the latter finding against the manufacturer stating that it had "substantially restrained the competition."
He also drew upon Nicholas Negroponte’s recent comments about the chip maker. The MIT professor behind the One Laptop per Child initiative, which aims to get $100 laptops to every child that needs one in developing countries, had said that Intel was dumping products on the same markets that it was targeting, all because the XO laptop uses AMD processors.
"In my view, the tactics Intel is using against OLPC are not only anti-competitive – they’re unethical," added Ruiz.