U.S. Federal Trade Commission Files Suit Against Intel

Charged company with illegally using its dominant market position to stifle competition

Accusing the world's biggest computer chipmaker of illegally using its dominant market position to stifle competition, the U.S. Federal Trade Commission announced on Dec. 16 that it had filed suit against Intel.

The FTC alleged that Intel has waged a systematic campaign for a decade to shut out competing microchips produced by rivals by cutting off their access to the marketplace.

"Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly," said Richard 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 Commission's action today seeks to remedy the damage that Intel has done to competition, innovation, and, ultimately, the American consumer."

The FTC complaint said Intel's anticompetitive tactics were designed to put the brakes on superior competitive products that threatened its monopoly in the central processing unit (CPU) microchip market.

"Over the last decade, this strategy has succeeded in maintaining the Intel monopoly at the expense of consumers," the FTC statement said. "In the process, Intel deprived consumers of choice and innovation."

The FTC suit comes a month after Intel agreed to pay Advanced Micro Devices $1.25 billion to settle the long-running legal dispute between the two chipmakers on antitrust and patent issues. In exchange, AMD agreed to drop all pending litigation against Intel.

Intel has been facing litigation in the United States, Europe and Asia alleging it abused its dominant position in the sector.

European Union antitrust regulators fined Intel a record 1.06 billion euros (US$1.45 billion) in May, claiming the company abused its stranglehold on the semiconductor market to crush AMD. Intel denied the charges and has appealed the EU ruling.

AMD filed a lawsuit in 2005 in Delaware alleging a catalogue of abuses by Intel, including threats of retaliation against firms if they do not buy from Intel rather than AMD.
At the time of the lawsuit, Intel held a share of more than 80% of the market for microprocessors for the world's personal computers. AMD's share had slipped to just under 16% from about 20% in 2001.

Intel last year also challenged an $18 million fine imposed by South Korea's anti-trust watchdog.

Copyright Agence France-Presse, 2009

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