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Intel fighting new complaint in New York's antitrust suit

By John O'Brien | Jan 19, 2011


NEW YORK (Legal Newsline) - A federal judge is currently deciding if New York Attorney General Eric Schneiderman will be allowed to submit his predecessor's amended complaint in an antitrust lawsuit against computer chip maker Intel.

In his last month as attorney general, now-Gov. Andrew Cuomo fought with Intel over the right to file an amended complaint 13 months after his original one was submitted. While U.S. District Judge Leonard Stark decides, Intel is opposing New York's stance and asking for oral arguments in the matter.

"Thirteen months into this case, and without justification, New York belatedly seeks a major expansion of the scope of the parties it represents and an enlargement of the claimed damages period by more than a year," attorneys for the company wrote.

"While leave to amend is liberally granted, New York's proposed amendment raises serious issues that require denial."

In November 2009, Cuomo alleged the company threatened and punished companies it viewed as working too closely with its competitors.

Intel cut off payments made under the guise of "rebates" it was making to computer makers, Cuomo said. Intel also funded those makers' competitors and ended joint development ventures, he claimed.

The allegations included paying $2 billion to Dell in 2006, threatening HP with the derailment of a server technology and paying IBM $130 million not to launch an AMD-based server product.

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

Cuomo wanted to expand his original complaint to include "small and medium businesses in the group those New York seeks to protect from Intel's anticompetitive conduct."

Intel says the impact of amending the complaint is larger than that.

"In reality, rather than clarify, New York's amendment adds a new, undefined group of 'small and medium businesses' to the existing group of natural persons represented in the original complaint," the company says.

"This change represents a significant expansion of New York's represented parties, thus enlarging the scope of any potential liability on its Donnelly Act and Executive Law claims. New York fails to explain why it originally did not seek to represent such parties or why it waited more than a year to add them."

The Donnelly Act is New York's antitrust law, prohibiting price-fixing, bid-rigging and monopolization, among other practices.

Intel also claims the company will be prejudiced by the amendment, because Intel "has no clear idea" of which specific parties would be represented in the group of "small and medium businesses."

The proposed amended complaint asks for relief on behalf of "small and medium businesses in New York who purchased products containing x86CPUs indirectly or directly."

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