Intel, PC makers sued over Pentium 4 performance

Tom Mainelli, PC World   Today’s Top Stories    or  Other Hardware Stories  

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August 19, 2002 (PC World) -- A small group of PC owners has quietly filed a class-action lawsuit against Intel Corp., Gateway Inc., and Hewlett-Packard Co., alleging that the companies misled them into believing the Pentium 4 was a superior processor to Intel's own Pentium III and the Athlon from Advanced Micro Devices Inc.
The complaint -- Neubauer et al. v. Intel et al. -- was filed June 3 in the Third Judicial Circuit in Madison County, Ill. The case is in limbo awaiting a ruling on whether it belongs in a state or federal jurisdiction and has not yet achieved class-action status. It came to light this week after a copy of the complaint was sent to PCWorld.com anonymously.
The plaintiffs claim that the companies deceived the public when marketing Intel's flagship processor and allege that it is "the material fact that there is no benefit to consumers in choosing the Pentium 4 over the Pentium III." The complaint alleges that "the Pentium 4 is less powerful and slower than the Pentium III and/or the AMD Athlon."
Noting the sheer number of Pentium 4s Intel has sold, the complaint goes on to say the class "is so numerous that the individual joinder of all members is impracticable" and that the class could include "hundreds of thousands of members." According to MicroDesign Resources in Sunnyvale, Calif., Intel has shipped upwards of 50 million Pentium 4s since the chip was launched in November 2000 (see story).
The complaint doen't name the monetary amount sought by the plaintiffs. It does, however, cite what it says is law in California -- where the companies are based -- that each plaintiff is entitled to actual damages, restitution of property and punitive damages. The complaint notes that the cumulative total would be less than $75,000 each.
Attorneys Stephen M. Tillery and Aaron M. Zigler of the law firm Carr Korein Tillery in St. Louis filed the complaint on behalf of five plaintiffs. The firm declined to comment about the case, but Zigler confirmed the June 3 filing.
Intel and Gateway executives also declined to comment about the complaint, citing company policies regarding ongoing litigation. HP didn't return calls seeking comment.
The plaintiffs don't appear to be accusing Intel of lying about the Pentium 4's clock speed, said Rob Enderle, a research fellow at Giga Information Group Inc. They're complaining about the chip's performance, and that's a crucial element to the case's viability, he said.
"As long as the market is going after megahertz, and Intel is reporting the correct megahertz, then I do not think this is actionable," he said. "Megahertz is misleading, but that has to do with the fact that the industry doesn't use benchmarks."
Enderle said the PC industry should throw out megahertz altogether as a system of measuring performance. The actual clock speed matters less than the overall system performance, he said.
"The right answer really is benchmarks," he said. "We need to have a way that people can really see the difference between PCs."
In fact, in the tech industry several benchmarks have achieved enough coverage to qualify as industry standards. However, it's unlikely any one benchmark would satisfy the legion of vendors that build the components of any one PC.
AMD took matters into its own hands with its launch of the Athlon XP processor last October, when it also introduced a new naming convention that attaches faster-sounding names to AMD's slower-running chips. Results have been mixed.

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