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FTC to investigate Intel

by on09 June 2008


Ongoing Trade Practices to be Examined

The U.S. Federal Trade Commission (FTC) has launched a formal investigation of Intel Corporation.  The FTC launched its antitrust investigation after similar probes have taken place in Europe and Asia, but did not indicate the exact reasons why it is investigating Intel. Intel has been long accused by its rivals, including Advanced Micro Devices Inc. (AMD), of gaining its huge market dominance through abusive tactics, and AMD filed an action against Intel based on this claim in 2005. Intel’s microprocessors are found on more than 80 percent of the world’s PCs.  Intel and the FTC reached a settlement agreement in a former FTC investigation in 1999.

Intel had been under an informal investigation by the FTC until several months ago, and the FTC did confirm that the matter has not been upgraded to a formal investigation. Intel indicated through its General Counsel that it has been cooperating with the FTC’s existing informal probe by supplying hundreds of thousands of documents, and that it would continue to cooperate. Bruce Sewell, General Counsel, told Reuters news in a telephone interview, "We don't believe that there's been abusive behavior or illegal behavior. The record here is so strong in our favor."

Also, the Attorney General’s office of the State of New York has been formally investigating Intel since January to determine whether Intel violated New York State antitrust laws in its efforts to squeeze AMD out of the market there. A year ago, the European Commission in Brussels formally charged Intel with selling chips below cost and offering customers huge rebates in an illegal marketing attempt to eliminate AMD. And Japan’s Trade Commission ruled in 2005 that Intel had, in fact, violated Japan’s anti-monopoly laws. Intel accepted the finding, which allowed it to avoid a trial there.

AMD sued Intel in 2005 for giving illegal discounts to computer manufacturers and for retaliating against manufacturers who used AMD chips, and against retail stores that provided sizeable shelf space for computers containing AMD chipsets. AMD’s lawsuit is ongoing against Intel, but last week the U.S. District Court in Delaware postponed hearing the case for trial until 2010.

It seems that governments and commissions worldwide agree that Intel has engaged in improper conduct, but their remedies so far have not been sufficiently meaningful or long lasting as to cause Intel to change its ongoing practices.  AMD will have to bide its time until 2010. Let’s hope it can wait that long.

Last modified on 10 June 2008
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