Intel Corp (INTC)

[Elmer Phud]

Intel Anxious for Discovery Phase of Trial
By Scott M. Fulton, III, BetaNews
September 28, 2006, 8:43 PM

Early Thursday afternoon, Intel spokesperson Chuck Malloy told BetaNews his company is pleased with Judge Joseph Farnan's decision on Friday to dismiss a major portion of AMD's antitrust case against it. That much is not a surprise. What we learned today from Malloy is that Intel is now anxious to begin the discovery phase of the trial - the part where both sides are allowed to pursue investigations that may turn up evidence.

Up to now, a protective order had been imposed by Judge Farnan upon both parties, until a trial date was set and a formal itinerary decided upon. That happened yesterday, but it almost didn't. With the judge's dismissal of AMD's claim that Intel's conduct in foreign countries anti-competitively impacted AMD's business in the US, AMD was forced to ask the judge to be able to seek reconsideration of that decision, and to continue its investigation pending that reconsideration.

But Malloy's comments to BetaNews today suggested that Intel will pursue a kind of affirmative defense, proving that the company did nothing illegal rather than waiting for AMD's case to fall apart. Up to now, he said, AMD has had only its allegations. Now it will need proof.

It's a very big case, Malloy added, and it will take all two-and-one-half years between now and the trial date for both sides to uncover the data they'll need to make a case. Intel's case, Mulloy said, will be an affirmative proof that his company did nothing illegal.

"All the business practices AMD argues about," remarked Mulloy, "are lawful." He conceded that some Intel business practices could, at some point, impact AMD, after a series of what Judge Mulloy in his decision yesterday characterized as "twists and turns."

But the Sherman Antitrust Act strictly prohibits a company's conduct in the U.S. that unfairly, due to monopoly status, impacts other companies in the U.S., with the exception being foreign companies whose business relationship is based on importing. Since both AMD and Intel are American companies, any business it does elsewhere is considered foreign by current law, even if the parts were manufactured elsewhere and sold to customers elsewhere.

When asked whether the Sherman Antitrust Act might exclude certain business practices in AMD's claims, Mulloy agreed.