Cuomo files antitrust suit against Intel

John O'Brien Nov. 4, 2009, 1:54pm


NEW YORK (Legal Newsline) - New York Attorney General Andrew Cuomo is accusing microprocessor maker Intel Corp. of threatening computer manufacturers in order to maintain a monopoly.

Wednesday, Cuomo announced a federal lawsuit against Intel, the world's largest microprocessor manufacturer, alleging the company threatened and punished companies it viewed as working too closely with its competitors.

Intel cut off payments it was making to computer makers, funded those maker's competitors and ended joint development ventures, Cuomo says.

"Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market," 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. These illegal tactics must stop and competition must be restored to this vital marketplace."

Cuomo says Intel paid rebates -- which he said were basically payoffs -- to obtain exclusive agreements with computer makers. Those payments were large enough to be the difference between loss and profit for some computer makers, he said.

Intel paid $2 billion to Dell in 2006, threatened HP with the derailment of a server technology and paid IBM $130 million not to launch an AMD-based server product, Cuomo says.

It also threatened to stop funding for an IBM/Intel joint project if IBM marketed AMD-based server products, he alleges.

"Intel's illegal conduct has corroded competitive conditions in an economically vital market," the complaint says.

"It has also deprived New York consumers, businesses and governmental entities of innovative technology and compelled them to pay prices above competitive levels.

"Businesses and public entities (including universities) in New York and elsewhere were compelled to purchase Intel-based products, particularly multi-processor servers used for
complex computing tasks, often paid hefty monopoly overcharges."

Cuomo also claims to have internal documents and e-mails that prove his case.

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