AMD

AMD

March 08, 2005 04:21 ET

AMD Supports Fair Trade Commission of Japan's -- JFTC -- Decision to Stop Illegal Business Practices by Intel


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: AMD

NYSE SYMBOL: AMD

MARCH 8, 2005 - 04:21 ET

AMD Supports Fair Trade Commission of Japan's -- JFTC
-- Decision to Stop Illegal Business Practices by Intel

SUNNYVALE, Calif.--(CCNMatthews - Mar 8, 2005) -

Intel's Unlawful Business Practices in Japan Limit Consumers' Freedom to
Choose Worldwide

AMD (NYSE:AMD) released the following statement today regarding the Fair
Trade Commission of Japan's (JFTC) Recommendation to Intel Japan K.K.
("Intel") on its violation of Section 3 of Japan's Antimonopoly Act:

"The JFTC found that Intel illegally manipulated the market to exclude
competition, hurting PC users around the world," said Thomas M. McCoy,
AMD executive vice president, legal affairs and chief administrative
officer. "Using market power illegally to limit innovation and, more
importantly, consumers' freedom to choose, cannot be tolerated. We
encourage governments around the globe to ensure that their markets are
not being harmed as well."

McCoy continued, "The evidence of harm to consumers is obvious. By
preventing PC manufacturers from using CPUs of their choice, Intel's
misconduct deprived consumers worldwide of the freedom to purchase
computers that best fit their needs. Efforts by an avowed monopolist to
artificially set market shares to exclude competition clearly violates
antitrust standards globally."

The JFTC has found that Intel has abused its monopoly power to exclude
fair and open competition, thereby violating Section 3 of Japan's
Antimonopoly Act. These findings reveal that Intel used illegal tactics
to stop AMD's growing success and increasing market share, which reached
22% in 2002, by imposing limitations on Japanese PC manufacturers (which
sell notebook and desktop computers to customers around the world).

The JFTC Recommendation is the culmination of an 11-month investigation
that has established patterns of anti-consumer and anti-competitive
behavior. The Commission found that, because of AMD's inroads into
Intel's market share, Intel deliberately set out to artificially limit
AMD by imposing conditions on five Japanese manufacturers that together
represented 77% of all CPUs sold in Japan. Specifically, the JFTC found
that:

-- One manufacturer was forced to agree to buy 100% of its CPUs from
Intel; another manufacturer was forced to curtail its non-Intel
purchases to 10% or less;

-- Intel separately conditioned rebates on the exclusive use of Intel
CPUs throughout an entire series of computers sold under a single brand
name in order to exclude AMD CPUs from distribution;

-- The mechanisms used to achieve these ends included rebates and
marketing practices that includes the "Intel Inside" program and market
development funds provided through Intel's corporate parent in the
United States.

The Recommendation notes that Intel imposed these restrictions in direct
response to AMD's growing market share from 2000-2002. The
Recommendation also notes that as a result of this misconduct, the
combined market share of AMD and a second, much smaller CPU company fell
from 24% in 2002 to 11% in 2003.

The JFTC imposed a number of restrictions on Intel. Among them, it must
notify its customers and educate its employees that it may no longer
provide rebates and other funds to Japanese computer manufacturers on
conditions that exclude competitors' CPUs.

The European Commission's investigation of Intel for anti-competitive
business practices in the European market remains ongoing.

AMD's Position on Fair and Open Competition

AMD stands for fair and open competition and the value and variety
competition delivers to consumers. Businesses and consumers should have
the freedom to choose from a range of competitive products that come
from continuous innovation on a level playing field where everybody
plays by the rules. When market forces work, consumers have choice and
everyone wins.

About AMD

AMD (NYSE:AMD) designs and produces innovative microprocessors, Flash
memory devices and low-power processor solutions for the computer,
communications and consumer electronics industries. AMD is dedicated to
delivering standards-based, customer-focused solutions for technology
users, ranging from enterprises to government agencies and individual
consumers. For more information visit www.amd.com.

AMD, the AMD Arrow logo and combinations thereof, are trademarks of
Advanced Micro Devices, Inc. Other names are for informational purposes
only and may be trademarks of their respective owners.

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