SANTA CLARA, California, 5 April 2005 — Intel Corporation has agreed that its Japanese subsidiary, Intel K.K. (IJKK), will accept a recommendation from the Japan Fair Trade Commission (JFTC) dated March 8, 2005. The recommendation called upon Intel to halt the practice of requiring PC makers to limit the use of competitors’ chips in exchange for monetary rebates.
Although IJKK accepts the recommendation, the company stated that it does not agree with the facts underlying the JFTC’s allegations and the application of law in the recommendation. IJKK continues to believe its business practices are both fair and lawful. Additionally, the company feels that the cease-and-desist provisions of the recommendation will not impair it from continuing to meet customer requirements.
“Intel respectfully disagrees with the allegations contained in the recommendation, but in order to continue to focus on the needs of customers and consumers, and continue to provide them with the best products and service, we have decided to accept the recommendation,” said Bruce Sewell, VP and general counsel for Intel. “We believe the recommendation’s cease and desist provisions define a workable framework that enables us to continue to provide competitive pricing to our customers, and benefits consumers and the Japanese economy. We do not accept the recommendation’s allegations in its fact findings and the application of law. We believe the allegations misinterpret important aspects of our business practices and fail to take into account the competitive environment within which Intel and its customers compete.”
The cease-and-desist order could take several months to implement and the JFTC will be monitoring Intel to ensure compliance. If IJKK does not abide by the agreement the JFTC would resort to the courts. The JFTC commented that although they believe the findings are true, Intel is not obligated to accept the findings as fact when they accept the recommendations. Compliance with the recommendations is all that is required.
By accepting the order, Intel has saved both face in the market and millions in legal fees. Intel also believes that it has a strong enough grip on the market to be competitive within the limitations of the JFTC order. Time will tell.
Rival chipmaker AMD said Intel’s decision to comply with the JFTC order is a step in the right direction but that it is still dissatisfied with the latest move. “(Intel) has conspicuously failed to either accept responsibility for its actions or acknowledge that competition is best served when customers and consumers have a choice,” remarked AMD Executive Vice President Thomas McCoy.