Intel under FTC investigation
Intel maintains that the evidence that the MPU industry is fiercely competitive and working is compelling.
By Suzanne Deffree, Managing Editor, News -- EDN, June 6, 2008
Intel Corp is maintaining that its business practices are “well within US law” today after the United States Federal Trade Commission (FTC) launched an official probe into the leading chip maker.
The FTC on Wednesday issued a subpoena after a more than year-long informal investigation into Intel that started in 2006 regarding competition in the MPU market.
Intel’s chief competitor Advanced Micro Devices Inc (AMD) has been pushing for such a move from the FTC for some time. The two companies are currently engaged in an antitrust suit in which AMD claims it has evidence that Intel made payments to MPU market customers for exclusivity, for sector and channel exclusion, to cancel or delay AMD-based platforms; that Intel offered quantity-forcing all-or-nothing discounts; and that Intel practiced predatory bid-pricing. An economic study released in July 2007 and commissioned by the rival company found that Intel extracted alleged monopoly profits from MPU sales of more than $60 billion in the period from 1996 to 2006.
“Intel must now answer to the Federal Trade Commission, which is the appropriate way to determine the impact of Intel practices on US consumers and technology businesses," AMD executive VP and chief administrative officer Tom McCoy told Electronic News. "In every country around the world where Intel’s business practices have been investigated antitrust regulators have taken action.”*
Against all allegations made by AMD, however, Intel has maintained that its business practices are on the up and up and that its lead in the MPU market is based on its technology, not anticompetitive behavior. In its statement today on the FTC’s probe, Intel stated that prices for MPUs declined by 42.4% from 2000 to the end of 2007.
“The company believes its business practices are well within US law. The evidence that this industry is fiercely competitive and working is compelling,” Intel said. “When competitors perform and execute the market rewards them. When they falter and under-perform the market responds accordingly.”
Intel stated that since the FTC began its informal inquiry into the company’s business practices in 2006, it has provided the commission staff with a “considerable amount of information and thousands of documents.”
Intel said it will work cooperatively with the FTC staff to comply with the subpoena and continue providing information.
Intel is also under investigation by the state of New York for alleged antitrust business practices.
