The N.Y. Attorney General's office is accusing Intel of using bribes and coercion to pressure OEMs, including HP, Dell and IBM, into favoring its products over those from rival AMD. The charges leveled by the N.Y. investigators echo those of European regulators, who earlier this year fined Intel $1.45 billion for anti-competitive behavior. Intel has appealed that fine and accused the EC of conducting a one-sided investigation. An Intel spokesman questioned the filing of the N.Y. suit, saying that all the issues raised were being dealt with in a private lawsuit between AMD and Intel.
Federal prosecutors in New York
have filed an antitrust lawsuit against Intel, leveling charges that echo those
of European regulators, who eventually fined the giant chip maker $1.45 billion
earlier this year.
The lawsuit, filed Nov. 4, accuses Intel of leveraging its monopoly position
in the global processor market to cajole and threaten systems makers into using
Intel processors and staying away from products from rival Advanced Micro
N.Y. Attorney General Andrew Cuomo's lawsuit-which accuses Intel of breaking
state and federal anti-monopoly laws-alleges that Intel paid billions of
dollars to Dell, Hewlett-Packard and IBM to
use Intel products at the expense of AMD and
threatened those OEMs if they didn't comply.
"Rather than compete fairly, Intel used bribery and coercion to maintain a
stranglehold on the market," Cuomo said in a statement. "Intel's actions not
only unfairly restricted potential competitors, but also hurt average
consumers, who were robbed of better products and lower prices. These illegal
tactics must stop and competition must be restored to this vital marketplace."
The 83-page lawsuit is asking the federal court to ban Intel from continuing
such practices, force the chip maker to pay damages to N.Y. residents and
government entities, and level penalties against Intel.
The charges are similar to those leveled by investigators
with the European Commission
-the antitrust arm of the European
Commission-who also found that Intel offered rebates and made direct payments
to such systems makers as Acer, Dell, HP and NEC to buy all or mostly Intel
products for their machines. Intel, which owns
about 80 percent
of the world's x86 processor market, also coerced these
companies into favoring the chip maker, the EC said.
Intel has appealed the EC's fine, and officials have been vocal in accusing
European investigators of conducting a one-sided investigation and ignoring
evidence that is positive to Intel and its case. They also argued that
consumers have benefited by Intel's practices through greater innovation and
At the Intel Developer Forum in September, Intel CEO
Paul Otellini reiterated that argument and denied allegations of conditional
rebates or exclusive deals.
"I think they have consistently ignored information that would paint an
entirely different picture around the memos" from OEMs that the EC
unveiled Sept. 21, Otellini said at IDF.
Regarding the N.Y. case, Intel spokesman Tom Beermann said the company disagrees
with Cuomo's decision to file the lawsuit, particularly given that Intel and AMD
are locked in court proceedings over a lawsuit
filed by AMD
in Delaware that
essentially addresses the same allegations and similar evidence.
Both Intel and AMD have spent hundreds of
millions of dollars, filed hundreds of pages of evidence and conducted 2,200
hours of depositions in connection with the AMD
lawsuit. It doesn't benefit either company or consumers to have another lawsuit
filed to go over the same issues, Beermann said.
"The same tired line of thinking that AMD
has been shopping to regulators around the world has been picked up by the
Attorney General's Office in New York,"