FTC Sues Intel
The FTC said Wednesday that it is suing Intel Corp. for using its dominance in the computer chip market to harm competition and strengthen its monopoly. In the complaint, the FTC alleges Intel has "waged a systemic campaign to shut out rivals' competing microchips by cutting off their access to the marketplace."
"Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly," Richard A. Feinstein, director of the FTC's Bureau of Competition, said in a statement. "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's complaint alleges that Intel used threats and rewards to "coerce" computer manufactures such as Dell, Hewlett-Packard and IBM not to buy rival computer chips and used exclusive or restrictive deals to prevent computer makers from marketing any machines with non-Intel computer chips. In addition, the FTC claims Intel "secretly redesigned" key software known as a compiler to "deliberately" stunt the performance of competitors' central processing unit chips, while telling the public that the software performed better with Intel's CPUs than on their competitors' products. The complaint also alleges the firm is attempting to leverage its power to gain control over the emerging market for graphics processing units.
The commission said Intel's alleged activities violate sections of the FTC Act prohibiting unfair methods of competition and deceptive acts and practices in commerce, and the firm also engaged in illegal monopolization. The FTC is seeking an order that would bar Intel from using threats, bundled prices or other measures to encourage exclusive deals and hamper competition. The commission said it also may seek to bar Intel from "from unreasonably excluding or inhibiting the sale of competitive CPUs or GPUs."
The FTC lawsuit comes a month after Intel reached a settlement with its chief rival, Advanced Micro Devices Inc. However, Intel is still appealing a record $1.5 billion antitrust fine levied against it by the European Commission in May.
"Intel has competed fairly and lawfully," the firm said in a statement. Intel General Counsel Doug Melamed added that the firm tried to reach a settlement but the FTC "insisted on unprecedented remedies - including the restrictions on lawful price competition and enforcement of intellectual property rights set forth in the complaint that would make it impossible for Intel to conduct business." He also said the FTC rushed to file the case without fully investigating some of the facts.
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Antitrust
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