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4/27/2007
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Intel, AMD Accuse Each Other Of Media Manipulation

In letters to court-appointed mediator Vincent J. Poppiti, the two companies exchanged barbs, but stopped short of asking presiding federal court Judge Joseph Farnan Jr. to intervene.

Intel and Advanced Micro Devices have accused each other of trying to manipulate the press in the latter company's antitrust lawsuit.

In letters sent this week to court-appointed mediator Vincent J. Poppiti, the two companies exchanged barbs, but stopped short of asking presiding federal court Judge Joseph Farnan Jr. to intervene. The missives stem from a recent filing in which Intel said an internal investigation showed that e-mails mistakenly deleted after the suit was filed in June 2005 did not result in the loss of evidence with any "genuine significance."

AMD sent an e-mail blast to reporters and analysts that included copies of Intel's "remediation report," and said Intel chose to file supporting documents under seal to keep them from public view. Intel in its letter sent Wednesday to Poppiti defended its decision, saying, "AMD's hurried action highlights and fully supports the reason why Intel thought it was appropriate to file under seal the exhibits to its report that identify the names, positions, and employment status, in total, of more than 1,000 key Intel employees worldwide, many of whom will play no part in this litigation."

AMD countered in a letter sent to Poppiti Thursday that Intel was doing its own spinning in telling reporters that the remediation report established a "strong basis to believe that ultimately nothing of any genuine significance will prove to have been lost," according to AMD.

"We don't mind Intel explaining to the public the meaning it ascribes to its court filing," AMD said in the letter. "But we are puzzled by the obvious double standard that it wishes to apply to AMD, rushing to the court when AMD engages in a more limited example of the same public disclosures that Intel is so obviously eager to influence."

The letters, distributed by AMD, are an indication of the bitterness between the two companies. Intel has complained that it's being forced to spend millions of dollars and dedicate enormous resources in gathering and preserving potential evidence in a case that it believes has no merit. AMD's suit, on the other hand, accuses its rival in the PC and server business of using improper tactics to maintain its monopoly with computer manufacturers.

Intel in March acknowledged that for three and a half months after AMD filed its suit, a small number of employees whose e-mails were considered potential evidence failed to move all messages to their hard drives, which means they would have been purged automatically from Intel's system. In addition, "a few" employees believed erroneously that Intel's IT group was automatically saving their e-mails.

The disclosure brought an angry response from AMD. While not accusing Intel of intentionally destroying evidence, the company questioned the effectiveness of the procedures Intel put in place to protect potential evidence. Farnan ordered Intel to determine what was lost and whether there was any damage to potential evidence.

Determining whether Intel was negligent is important because of the punishment the company could face. If Farnan decides Intel failed to take proper steps, he could fine the company million of dollars. Worse, the judge could decide during the trial to instruct the jury that they should assume that the lost e-mails would have been detrimental to Intel's defense. Such a move could play a role in swaying the jury toward AMD.

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