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Chipping Away at Intel

Remember Microsoft? The government opens a formal antitrust probe into Intel.
Intel

Intel and Microsoft are old pals. But now the former may want to seek advice from the latter on how to fight the federal government.

Intel, the world's biggest maker of semiconductor chips, is being investigated by the Federal Trade Commission for antitrust practices, according to a report by Stephen Labaton in the New York Times. Intel later confirmed it had received a subpoena from the F.T.C. on June 4.

The Feds are entering the fray three years after smaller rival Advanced Micro Devices first sued the chip behemoth over its pricing practices. That suit is ongoing, and yesterday the company announced its trial date was pushed back a year to February 2010. The two companies expect the case to generate more documents than any other civil case in U.S. history, according to the Wall Street Journal.

A.M.D. has been urging the F.T.C. to investigate Intel's sales practices since filing its suit, to no avail until now. Deborah Majoras, who was the chairman of the agency until two months ago, had blocked a formal inquiry, according to Labaton. The agency's new chairman, William Kovacic, authorized the Intel probe with support of its commissioners.

A.M.D. has had better luck convincing antitrust regulators abroad to stop Intel from using some of its sales tactics. Just yesterday, the South Korean authorities fined Intel more than $25 million for violating its trade laws. It claimed that Intel rebated Samsung Electronics and TriGem Computer $37 million in exchange for a promise not to buy chips from competitors. Intel has also had setbacks in Europe and other international markets.

A federal antitrust suit against Intel, while possibly still many months away, would be the government's biggest antitrust suit since it sued Microsoft in 1998 for monopolistic practices.

 


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