FTC sues Intel for "anticompetitive tactics"

 

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By Stuart Turton

Posted on 16 Dec 2009 at 16:35

Intel has been sued by the US Federal Trade Commission for using "anticompetitive tactics" to "hamstring" competitors.

The FTC's allegations mirror those of the EU, which found that Intel offered the world’s largest computer manufacturers, including Dell, HP, and IBM, massive discounts in return for restricting the sale of non-Intel processors.

The watchdog accuses the chip giant of waging "a systematic campaign to shut out rivals' competing microchips by cutting off their access to the marketplace."

"This strategy has succeeded in maintaining the Intel monopoly at the expense of consumers, who have been denied access to potentially superior, non-Intel CPU chips and lower prices," the complaint states.

Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly

“Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly,” says Richard Feinstein, director of the FTC’s Bureau of Competition.

“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 is also claiming that Intel has brought its anticompetitive practices to the graphics card market. "These products [GPUs] have lessened the need for CPUs, and therefore pose a threat to Intel’s monopoly power," the suit claims.

"Intel has responded to this competitive challenge by embarking on a similar anticompetitive strategy, which aims to preserve its CPU monopoly by smothering potential competition from GPU chips such as those made by Nvidia," it concludes.

The FTC is seeking an order prohibiting "Intel from using threats, bundled prices, or other offers to encourage exclusive deals, hamper competition, or unfairly manipulate the prices of its CPU or GPU chips."

Intel has called the case "misguided" and claimed its actions in the market have benefited consumers and spurred innovation.

Unsurprisingly the move has been cheered by Nvidia. "We applaud today's action by the US Federal Trade Commission," says spokesman Hector Marinez.

"We are particularly pleased to see scrutiny being placed on Intel's behavior toward GPUs, which have become an increasingly important part of the PC industry."

The investigation will come as a bitter blow for Intel, following the $1.25 billion settlement with AMD last month.