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Technology

Intel Faces FTC Antitrust Suit


Federal officials say Intel used pressure on PC makers to deprive consumers of choice and stifle innovation in the chip industry

By Jim Rubin

(Bloomberg)— The U.S. Federal Trade Commission today accused Intel (INTC), the world's leading computer chipmaker, of illegally using its dominant market position for a decade "to stifle competition and strengthen its monopoly."

The complaint, which will be heard by an FTC administrative law judge, says Intel tried to block "superior" products by rivals and deprived consumers of choice and innovation for 10 years. Intel has been "running roughshod" over principles of fair play, the FTC charged. A hearing in the case could be held next September, the FTC said.

"Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly," said Richard A. Feinstein, the FTC's director of competition, in a statement.

Intel, based in Santa Clara, California, controls more than 80 percent of the global market for computer chips, dwarfing rivals such as Advanced Micro Devices (AMD). Intel has contended with antitrust probes dating back more than a decade and agreed to pay more than $1 billion to AMD last month to settle a four- year dispute.

Intel used "threats and rewards" aimed at computer manufacturers including Round Rock, Texas-based Dell (DELL), Palo Alto, California-based Hewlett-Packard (HP) and Armonk, New York- based International Business Machines (IBM), according to the FTC statement. Intel coerced the companies not to buy rival central processing unit chips, according to the statement.

Intel fell 13 cents, or less than 1 percent, to $19.67 at 9:35 a.m. New York time in Nasdaq Stock Market trading. The shares rose 35 percent so far this year through yesterday.

Intel spokesman Chuck Mulloy didn't immediately return a phone call.

To contact the reporter responsible for this story: Jim Rubin at jimrubin@bloomberg.net


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