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Federal Trade Commission Files Suit Against Intel For 'Anticompetitive Tactics'

Wednesday December 16, 2009 7:42 am PST by Eric Slivka
The U.S. Federal Trade Commission (FTC) today announced that it has filed suit against Intel, claiming that the company has "illegally used its dominant market position for a decade to stifle competition and strengthen its monopoly." The complaint focuses not only on Intel's actions in the CPU market to shut out competitors such as AMD, but also on newer, similar actions in the graphics chip market.

The FTC's administrative complaint charges that Intel carried out its anticompetitive campaign using threats and rewards aimed at the world's largest computer manufacturers, including Dell, Hewlett-Packard, and IBM, to coerce them not to buy rival computer CPU chips. Intel also used this practice, known as exclusive or restrictive dealing, to prevent computer makers from marketing any machines with non-Intel computer chips.

In addition, allegedly, Intel secretly redesigned key software, known as a compiler, in a way that deliberately stunted the performance of competitors' CPU chips. Intel told its customers and the public that software performed better on Intel CPUs than on competitors' CPUs, but the company deceived them by failing to disclose that these differences were due largely or entirely to Intel's compiler design.

The FTC is seeking a variety of remedies in the lawsuit against Intel, including orders preventing the company from using threats, bundled pricing, and other tactics to hamper competition or manipulate prices.

The news comes as Intel prepares for a preview event tomorrow highlighting forthcoming Arrandale processors. Speculation as centered on Apple's possible use of these chips in the next generation of its notebook computers, although a recent report claimed that Apple has refused to accept Intel's standard Arrandale package incorporating the company's integrated graphics chipset.

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