Digging Into N.Y.'s Antitrust Suit Against Intel
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New York Attorney General Andrew Cuomo caused quite a stir this week with his antitrust suit against Intel, accusing the chip giant of conducting "an illegal campaign to deprive AMD of distribution channels."
More than a few writers and bloggers chalked it up to politics. Cuomo's ambitions are no secret: he wishes to be governor of the state just like his father Mario once was. With current governor David Patterson performing abysmally in opinion polls and up for reelection next year, this could be the time for the son of one of New York's most famous governors to strike.
But really, would even the most ambitious of politicians put together a detailed 83-page complaint (available here in PDF format) as an election gimmick? Glenn Manishin, an antitrust attorney and partner at the Washington D.C. law firm of Duane Morris doesn't think so.
"Considering how much effort went into filing that data, you don't compile that much data just to file for headlines. He has to put up or shut up, so he's got to proceed and litigate this thing," Manishin told InternetNews.com.
Intel has consistently denied any wrongdoing and said it plans to continue to defend itself in court against any antitrust charges.
Cuomo's office said it had examined millions of pages of e-mails and documents since it opened an investigation in late 2007. Much of that has been undoubtedly helped along by the release of documents by the European Commission following its $1.45 billion fine against Intel (NASDAQ: INTC) earlier this year.
Intel certainly has a track record for getting the attention of antitrust officials. The company has been investigated as far back as 1991 for unsavory business practices. In 1995, it settled a lengthy legal case with AMD (NYSE: AMD), but that wouldn't be the last time the two would go at it legally.
In 2004, AMD filed suit against Intel in Delaware for anti-competitive behavior, citing marketing dollars used as extortion to lock out or limit use of AMD processors. Also that year, Japan's competition agency raided Intel's Tokyo offices. A year later, it issued a warning but no fine to Intel for anti-competitive practices.
That year the EU raided multiple Intel European offices, and in 2006, the Korean Fair Trade Commission (KFTC) raided Intel's Seoul offices. Intel was later hit with a $25 million fine. In 2008 the Federal Trade Commission opened another investigation of Intel and may take action as well. Finally came this year's EU fine and Cuomo's suit.
"It's pretty daunting that in Japan, Korea and the EU, where full scale investigations occurred, the outcome is the same, where they issued lengthy detailed statements of fact that looked pretty persuasive. It wouldn't take much for any AG, whether he wants to run for office or not, to see it as his obligation to step forward here," notes Albert Foer, president of the American Antitrust Institute in Washington, D.C.
Scott Testa, professor of Business Administration at Cabrini College in Philadelphia, adds "My gut is Intel is a very aggressive company and [Cuomo] felt there was an opportunity there, and felt that New York consumers were being wronged, and thought he'd make his move. Intel is very dominant in their market."