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Tokyo District Court Denies Intel K.K. Argument To Keep Evidence Obtained By JFTC Of Illegal Business Practices From The Public Record


Fair Trade Commission of Japan to Turn Over Evidence Collected In Its Investigation of Intel K.K. By March 17, 2006

TOKYO, Japan -- December 16, 2005 --Tokyo District Court today required the disclosure of evidence collected by the Fair Trade Commission of Japan (JFTC) during its investigation of Intel K.K. (“Intel”) for violating the country’s Antimonopoly Act. The evidence, discovered in raids of Intel K.K. offices as well as major Japanese OEM manufacturers in April, 2004, formed the basis of the JFTC’s Recommendation against Intel. Legal counsel for AMD Japan intend to use the JFTC’s evidence as part of its law suit against Intel in Japan, filed June 30th, 2005.(AMD Japan v. Intel K.K.).

The ruling was issued at the conclusion of a hearing in which counsel for both AMD Japan and Intel addressed the production of documents collected by the JFTC during its year-long investigation into Intel for violating Japan’s Antimonopoly Act.

“Today’s court ruling sends the message that the truth about Intel’s illegal monopoly abuse will soon see the light of day,” said Thomas M. McCoy, AMD executive vice president, legal affairs and chief administrative officer. “We thank the court for its sound decision, and we believe that it sends a clear message worldwide that Intel cannot hope to hide the truth about its anti-competitive business practices any longer; not from the law or from consumers everywhere who deserve to know the facts. We believe the JFTC’s evidence will show what people inside our industry already know well – that Intel abuses its monopoly position to threaten and intimidate OEMs not to do business with AMD.”

McCoy continued, “What’s at stake is the future of computing in a world economy that grows more dependent on microprocessors daily. Consumers across the globe are being harmed by Intel’s abusive monopoly- preservation tactics through higher prices, stifled innovation and reduced choice.”

The JFTC Recommendation Against Intel
On March 8, 2005, the JFTC found that Intel abused its monopoly power to exclude fair and open competition, violating Section 3 of Japan’s Antimonopoly Act. The findings revealed that Intel used coercive, 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 was 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 (later revealed to be NEC Corp., Toshiba Corp., Hitachi Ltd., Sony Corp., and Fujitsu, Ltd.) that together represented 77% of all CPUs sold in Japan. Specifically, the JFTC found that:
One manufacturer was coerced 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 noted that Intel imposed these restrictions in direct response to AMD’s growing market share from 2000-2002. The Recommendation also noted 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 investigations into Intel’s business practices by the European Commission and the Fair Trade Commission of Korea for violations similar to those found in Japan by the JFTC remain ongoing.

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