Federal Trade Commission Sues Intel, and Intel Fires Back

FTC says Intel used its monopoly illegally, squeezing out the competition

2 min read

And so it continues. As we predicted in a podcast last month, Intel's antitrust worries aren't anywhere near over.

After officially investigating the chipmaking giant for over a year and a half, the U.S. Federal Trade Commission took the plunge and sued. That doesn't come as a total surprise, given last month's similar suit from the New York State attorney general's office, and a fine levied earlier this year from the European Commission, the EU's enforcement arm. Intel also recently paid off rival AMD, in return for that company dropping its lawsuit against Intel.

From the FTC press release:

“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. The Commission’s action today seeks to remedy the damage that Intel has done to competition, innovation, and, ultimately, the American consumer.”

Intel fired back, saying the FTC would like to impose restrictions so harsh that "it would make it impossible for Intel to conduct business." Furthermore, the company claims,

The FTC's case is misguided. It is based largely on claims that the FTC added at the last minute and has not investigated. In addition, it is explicitly not based on existing law but is instead intended to make new rules for regulating business conduct. These new rules would harm consumers by reducing innovation and raising prices.

But the FTC isn't buying. According to its release:

To remedy the anticompetitive damage alleged in the complaint, the FTC is seeking an order which includes provisions that would prevent Intel from using threats, bundled prices, or other offers to encourage exclusive deals, hamper competition, or unfairly manipulate the prices of its CPU or GPU chips. The FTC also may seek an order prohibiting Intel from unreasonably excluding or inhibiting the sale of competitive CPUs or GPUs, and prohibiting Intel from making or distributing products that impair the performance–or apparent performance–of non-Intel CPUs or GPUs.

This could indicate that the Obama justice department is indeed coming down harder on antitrust cases than the previous administration.

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