Intel faces antitrust lawsuit from FTC

NEW YORK (AP) - The Federal Trade Commission sued Intel Corp. on Wednesday, looking to block pricing deals and other tactics the government said the world's biggest chip maker has used to snuff out competition.

The FTC said Intel, which makes the microprocessors that run personal computers, has shut rivals out of the marketplace. In the process, the FTC said, Intel has deprived consumers of choice and stifled innovation in the chip industry.

In a statement, the agency said it is asking for an order that would bar Intel from using "threats, bundled prices, or other offers to encourage exclusive deals, hamper competition, or unfairly manipulate the prices of its" chips.

A phone message left with the company seeking comment on Wednesday was not immediately returned.

Intel has faced similar charges for years and has denied any wrongdoing. The lawsuit comes after a recent $1.25 billion settlement with rival Advanced Micro Devices Inc. over similar claims.

In AMD's lawsuit, a Toshiba Corp. manager compared Intel's financial incentives for not working with the competition to cocaine, and Gateway executives said Intel beat them "into guacamole" with threats against working with AMD.

Intel, which is based in Santa Clara, Calif., is also appealing a record $1.45 billion antitrust fine leveled by European regulators.

Intel shares fell 37 cents, or 1.9 percent, to $19.43 in morning trading, while AMD jumped 43 cents, or 4.9 percent, to $9.25.

In its complaint Wednesday, which was scheduled to be heard in September by an administrative law judge, the FTC said Intel has used both threats and rewards to keep some of the biggest computer makers from buying other companies' chips or marketing computers that carried them. The complaint names Dell Inc., Hewlett-Packard Co., and IBM Corp. as Intel's targets.

The FTC also said Intel has secretly redesigned critical computer software to hinder the performance of other companies' microprocessors, or CPUs.

Although the FTC does not ask for any specific damages in its lawsuit, it wants to force Intel to provide its customers with a substitute software at no additional charge and to compensate them for the cost of distributing the replacement.

In addition, the agency said Intel is looking to extend its dominance into chips that are used to processes graphics, commonly known as GPUs, an area where Intel faces competition from smaller rivals such Nvidia Corp..

"Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly," said Richard A. Feinstein, director of the FTC's Bureau of Competition. "It's been running roughshod over the principles of fair play and the laws protecting competition on the merits."

A history of Intel's antitrust troubles:

1991: Intel's smaller rival, Advanced Micro Devices Inc., files an antitrust lawsuit against Intel amid years of legal disputes between the companies.

1993: The FTC drops a probe into alleged anticompetitive behavior by Intel.

1995: AMD and Intel settle all litigation between them. Intel gets $58 million, while AMD gets $18 million.

1998: The FTC accuses Intel of violating federal law by withholding technical information about its processors from computer makers with whom Intel was involved in patent disputes. Intel settled that case the following year.

2000: AMD files a complaint with the European Commission accusing Intel of abusing its dominant market position.

2005: Japan's Fair Trade Commission finds that Intel violated antitrust rules there, a ruling Intel eventually accepts without admitting wrongdoing. AMD files antitrust lawsuit against Intel in a federal court in Delaware.

2008: Regulators in Korea fine Intel $18.6 million, a ruling Intel is appealing. U.S. Federal Trade Commission opens formal probe of Intel's behavior.

2009: European regulators fine Intel a record $1.45 billion, a fine Intel pays but is appealing. New York Attorney General Andrew Cuomo files a federal lawsuit against Intel. Intel warns AMD that the spinoff of its manufacturing division violates the companies' cross-license agreement. The companies settle, with Intel agreeing to pay AMD $1.25 billion and the companies entering into new, five-year cross-licensing deal. The FTC sues Intel, adding allegations regarding graphics-chip sales to complaints made by others over central processing units.