Intel Target Of Antitrust Probe, Again

Intel Corp. is again the focus of an antitrust investigation, this time launched by New York Attorney General Andrew M. Cuomo for allegedly trying to edge out rival Advanced Micro Devices Inc. (AMD) and other competitors.

Intel, the world's largest chipmaker, did not respond to requests for comment on the probe that suggests it tried coerce customers to exclude AMD from the worldwide x86 CPU market, a $30 billion global market for which Intel holds 90 percent of the revenue and 80 percent of the volume.

In the past, AMD has claimed that Santa Clara, Calif.-based Intel offered "rebates" to computer manufactures in exchange for maintaining the use of competitors' chips at just 10 percent of their mix or less.

According to a statement Thursday from Cuomo's office, Intel was served with subpoenas seeking documents and information concerning its pricing practices and its possible attempt to exclude competitors through market domination. The attorney general's office is looking into whether Intel penalized customers, mostly computer manufacturers, from purchasing x86 CPUs from its competitors; improperly paid customers for exclusivity; and illegally cut off competitors from distribution channels.

"Our investigation is focused on determining whether Intel has improperly used monopoly power to exclude competitors or stifle innovation," Cuomo said in a statement. "We will also look at whether Intel abused its power to remove competitive threats or harm competition in violation of New York and federal antitrust laws."

An spokesperson for Sunnyvale, Calif.-based AMD said Thursday afternoon that AMD also received a subpoena pertaining to the antitrust investigation into Intel.

"New York State's decision, based on its findings to date, to open a formal investigation of Intel's anticompetitive business practices is good news for computer buyers in NY and throughout the United States," said AMD executive vice president, legal affairs and chief administrative officer Tom McCoy.

This is not the first time Intel has come under the antitrust gun, as the world's largest semiconductor company faces lawsuits and antitrust probes around the world.

Similar allegations have been investigated by authorities in Europe and Asia and have resulted penalties such as a cease and desist order against Intel.

Last July, the European Commission reached and preliminary conclusions that Intel violated competition law, which, if proven, could end up with Intel being fined 10 percent of its annual revenue. The Korean Fair Trade Commission reached similar preliminary conclusions that could result in a fine of 3 percent of Intel's annual sales if the chipmaker is found guilty.

In 2005, the Japanese Fair Trade Commission concluded that Intel violated its competition laws and Intel agreed to cease and desist.

"After careful preliminary review, we have determined that questions raised about Intel's potential anticompetitive conduct warrant a full and factual investigation," Cuomo said. "Protecting fair and open competition in the microprocessor market is critical to New York, the United States, and the world. Businesses and consumers everywhere should have the ability to easily choose the best products at the best price and only fair competition can guarantee it. Monopolistic practices are a serious concern particularly for New Yorkers who are navigating an information-intensive economy."