As the lawsuit progresses, it is bound to capture the attention of much of the tech industry — 38 companies received notices from AMD, requiring them to keep documents related to this case. As a result, the system under which PC vendors make their buying decisions will come under unprecedented public scrutiny.

AMD alleged that Intel went beyond aggressive marketing and repeatedly browbeat PC vendors into limiting their purchases of AMD processors through the selective distribution of market- development funds — cash payments that help PC vendors fund their marketing programs — and rebate checks triggered by certain levels of purchasing.

For example, in 2002, when AMD tried to offer chips for Hewlett-Packard (HP) to use in its Evo commercial desktop line, HP asked for a $25 million quarterly fund to compensate it for expected retaliation from Intel, AMD’s complaint said.

“This trial will boil down to how permissible it is for Intel to use these various marketing programs,” said Dean McCarron, principal analyst at Mercury Research.

These marketing programs help Intel and the PC companies extol the virtues of various technologies, such as Intel’s Centrino mobile technology, McCarron said.

Intel Denies Any Wrongdoing

“We unequivocally disagree with AMD’s claims,” said Paul Otellini, Intel’s president and CEO.
Intel competes aggressively but fairly, he added.

Should AMD prevail, Intel would have to discontinue the programs, or at least curtail them, McCarron said. And it would probably have to cut its prices to keep the PC industry from losing money on each unit it sells.