Intel accused of "systematic bullying"

 

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By Reuters

Posted on 5 Nov 2009 at 10:13

Chipmaker Intel is in hot water with US prosecutors, standing accused of threatening computer manufacturers and paying billions of dollars in kickbacks to maintain its market dominance.

The lawsuit, issued by New York Attorney General Andrew Cuomo, accuses Intel of violating competition laws through a "systematic worldwide campaign" of bullying and coercion to monopolise the market for PC chips.

Cuomo alleges that Intel, whose processors power 80% of the world's PCs, bribed or coerced computer makers such as Dell, HP and IBM to use its microprocessors or stop using those of rivals. The alleged wrongdoing went on for years and included kickbacks and threats of retaliation for using rival chips.

The lawsuit is not the first of its kind. Earlier this year, Intel was fined £1bn by the European Union for similar anti-competitive actions.

Cuomo said Intel's "my way or the highway" had corroded competition, while forcing consumers and businesses to overpay for chips. "We intend to stop them," he said, and the lawsuit also seeks triple damages and other remedies.

"Consumers have paid more for slower computers and competition has been dampened," said David Balto, a former Federal Trade Commission official.

Intel spokesman Chuck Mulloy said the company would defend itself against the charges, saying: "Neither customers who have benefited from lower prices and increased innovation nor justice are being served by the decision to file a case now."