Intel Faces Antitrust Lawsuit

Ftc Says Company Shut Out Rival Computer Chip Makers

December 17, 2009|By Jim Puzzanghera and Don Lee | Jim Puzzanghera and Don Lee,Tribune Newspapers

WASHINGTON - - The Federal Trade Commission on Wednesday sued Intel Corp., accusing the computer chip giant of abusing its market dominance for a decade to stifle competition and strengthen its monopoly.

The FTC alleges that Intel has waged a systematic and illegal campaign to shut out rival makers of central processing unit chips, the main brains of a computer, by cutting off their access to the marketplace. In doing so, the agency contends, the world's largest chipmaker has deprived consumers of choice by denying them access to potentially superior chips and lower prices.

"Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly," said Richard A. Feinstein, director of the FTC's Bureau of Competition. "It's been running roughshod over the principles of fair play and the laws protecting competition on the merits."

The lawsuit is the latest antitrust challenge to Intel, which has been targeted by regulators in Europe and Asia. The European Union levied a $1.45 billion fine against Intel in March, alleging the company had forced computer manufacturers to use its chips instead of those of its main rival, Advanced Micro Devices Inc.

New York Attorney General Andrew Cuomo recently filed antitrust charges against the company. And last month Intel agreed to pay $1.25 billion to AMD to settle a long-running lawsuit that echoed many of the antitrust allegations.

The FTC's administrative complaint alleges that Intel used threats and rewards aimed at the world's largest computermakers to coerce them not to buy rival computer chips.

The FTC filed the case under a statute that does not allow any fines. Instead, the FTC is seeking to force Intel to make a host of changes to its business practices, including limiting the way it uses discounts and bundling to sell its products.

Intel said it had done nothing wrong. Intel General Counsel Doug Melamed said the company tried to settle the case and believed the FTC unfairly lumped in recent allegations regarding graphic chips that it hadn't properly investigated. He said the proposed remedies would prevent Intel from competing.

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