Intel Faced With Antitrust Investigation

The Federal Trade Commission, according to The NYT – has opened a formal antitrust investigation of Intel (INTC), the world’s largest maker of computer microprocessors, for anticompetitive conduct.

The officials and lawyers said that in recent days Intel, its smaller rival Advanced Micro Devices (AMD), and several of the world’s largest personal computer makers that buy semiconductors from the two companies have begun to receive subpoenas from the commission.

The investigation into accusations that Intel’s pricing policies in the United States and abroad have been designed to maintain a near-monopoly on the microprocessor market was authorized by William E. Kovacic, the new chairman of the trade commission, and has the support of the agency’s other commissioners.

AMD has waged a global legal and public relations campaign against Intel. The fight between the two—over a market that generates annual revenues of more than $225 billion — is among the largest antitrust matters pending before American and foreign regulators, and is considered to be among the most important since the antitrust cases brought against Microsoft in the 1990s.

AMD’s complaints have received considerably more traction abroad.

This week, the Korean Fair Trade Commission said it would order Intel to pay more than $25 million for violating its fair trade laws. The Korean commission found that Intel violated antitrust law when it offered $37 million in rebates to the personal computer makers, Samsung Electronics and the Trigem Company, from 2002 to 2005 in return for a pledge not to buy microprocessors from AMD.

Intel responded by saying it was disappointed with the decision and was likely to appeal it.

Since it will almost certainly be many months before the commission decides whether to make a case against Intel, as European and Asian regulators already have, the investigation could mark an important early test for the next administration on antitrust and competition policy.

There was no immediate comment from Intel or A.M.D. about the Federal Trade Commission’s decision.

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About Ron Haruni 1071 Articles
Ron Haruni is the Co-Founder & Editor in Chief of Wall Street Pit.

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