Judge dismisses portion of Intel antitrust suit

A federal judge in Delaware has dismissed portions of a class-action suit that accused Intel of violating antitrust laws.

U.S. District Court Judge Joseph Farnan, in a ruling issued Wednesday, said that a U.S. court has no jurisdiction over the foreign conduct claims in a lawsuit that seeks monetary damages for U.S. consumers and businesses who purchased PCs with Intel chips. Those consumers say they were forced to pay too much because Intel used its near-monopoly position to bar computer makers from using Advanced Micro Devices (AMD) chips, thus eliminating competition and keeping prices artificially high.

The case has no direct relation to the antitrust suit leveled against Intel in 2005 by AMD, but mirrors the same charges, said Intel spokesman Chuck Mulloy. Farnan is hearing both cases, and in September made the same decision about the AMD version.

The ruling means that even if the court found Intel guilty of forcing up prices, the plaintiffs could not calculate the damages they won by including PC sales by foreign vendors like Acer, Sony and Toshiba, Mulloy said. They would have to base their claim solely on sales by U.S. vendors like Dell, Gateway and Hewlett-Packard.

Still, both AMD and the foreign consumers will continue pressing their cases because Farnan also ruled they could use foreign evidence to build a domestic case against Intel.

“AMD and the class [action suit] would need to sue Intel in foreign jurisdictions to recover monetary damages that were incurred outside the U.S.,” said AMD spokesman Michael Silverman. “From our perspective — and I suspect the class would say the same — the critical piece was to gain access to that foreign discovery. In both cases, the judge has allowed that access.”

In addition, the class-action suit concerns only the harm caused to domestic customers, said Daniel A. Small, a lawyer for the firm Cohen, Milstein, Hausfeld and Toll, of Washington, D.C. who argued the plaintiffs’ case.

“We’re pursuing very actively document discovery, both from Intel and from third parties,” Small said.

However, that effort hit a large hurdle on Monday, when Intel admitted it had lost many internal e-mail records related to the AMD case, making it impossible to collect them as evidence. On Wednesday, the court gave Intel a deadline of April 10 to turn over an explanation of its e-mail preservation plan, a list of correspondence between the people responsible for following it and its plan to restore the lost data.

Another challenge for the class-action suit is Intel’s motion to dismiss the entire case because it says customers were never harmed by increased prices. Instead, Intel says it used its dominant market position to compete with AMD by decreasing prices, Small said. Farnan said Wednesday he would rule on that motion by the end of March.

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