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Intel faces US antitrust probe

The state of New York will probe Intel to determine whether the world's biggest microchip maker has behaved anti-competitively. The company is already the subject of a European Commission case following a six-year investigation.14 Jan 2008

New York attorney general Andrew Cuomo's office has issued a subpoena intended to help it gather evidence into Intel's practices. It will investigate whether or not Intel forced its customers to exclude competitor Advanced Micro Devices (AMD).

“After careful preliminary review, we have determined that questions raised about Intel's potential anticompetitive conduct warrant a full and factual investigation,” said Cuomo. “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.”

Cuomo's office said that it would investigate whether Intel penalised computer manufacturer customers when they chose to build some machines using competing chips; whether it improperly paid customers to use only Intel chips; and whether it illegally blocked distribution channels for competitors.

It said that the investigation would focus on state and national laws.

The grounds for investigation are very similar to charges laid at Intel's door by the European Commission. It is also investigating Intel's behaviour and the Commission has said that the company had an "overall anti-competitive strategy" which broke the EC Treaty in three different ways.

"Our investigation is focused on determining whether Intel has improperly used monopoly power to exclude competitors or stifle innovation,” said Cuomo. “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.”

Intel said last week that it would defend itself against the European charges. The company has a right to an oral hearing before the Commission makes a ruling in the case.

The Commission won a victory last year when a court backed its 2004 ruling against Microsoft on competition offences. Its action on Intel follows an investigation which lasted six years and involved raids on Intel premises.