Intel’s antitrust woes cross the Atlantic
Intel is facing a federal antitrust lawsuit from New York’s Attorney General over claims it used “bribery and coercion” to maintain its market share. It follows a record fine of $1.45 billion imposed by the European Union over similar activity.
As with the European case, the New York allegations involve deals Intel did with computer manufacturers who used its chips. It’s said the firm paid customers hefty sums to stop buying chips from rival manufacturers such as AMD. One firm alone, Dell, received almost $2 billion in such payments in a single year.
The payments were made in the form of “rebates”, effectively bulk-order discounts. That in itself isn’t legal. However, the case cites e-mail evidence that the rebates were conditional on whether or not the customers bought from rivals. If that evidence is held to be accurate, those conditions would likely be considered a breach of competition rules.
It’s also claimed Intel threatened some customers by saying that they would pull out of funding joint projects and give the money to competitors, unless the customer followed Intel’s demands. Whether that’s illegal may be more disputable.
New York Attorney General Andrew Cuomo said, “Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices.”
The case may not be the end of Intel’s legal problems in the U.S. The Federal Trade Commission is reportedly considering an investigation into Intel’s behavior. And rival AMD appears set to bring its own court case against the firm.
In May this year, the European Union fined Intel 1.06 billion Euros for actions which were virtually identical to those described in the Cuomo case. The firm was also fined $25 million in Korea last year for antitrust offenses and has previously been warned about the rebates-for-exclusivity policy by officials in Japan.
Related Posts:
