RealTime IT News

N.Y. Attorney General Targets Intel

Here we go again. The ongoing antitrust battle between chip makers AMD and Intel took a more regional turn today when New York's Attorney General Andrew Cuomo announced he's launched an investigation into Intel's pricing practices and whether the chip giant illegally hindered competitor AMD's sales efforts.

Intel confirmed it's received the subpoena and denied any wrongdoing. "We believe our business practices are lawful," Intel spokesperson Chuck Mulloy told InternetNews.com. "Microprocessors prices have continued to decline over the past twenty years to the benefit of consumers. Regardless of these kind of allegations, the microprocessor market is very competitive market."

Mulloy also said Cuomo's allegations mirror the charges AMD originally filed in the U.S. District Court of Delaware back in June, 2005 which is still ongoing. Intel has consistently declared its innocence in that case.

Mulloy said Intel would "work very hard to comply with the subpoena from the Attorney General."

In addition to the Delaware case, Intel is contesting similar charges filed last year by the European Commission. Japan and Korea have also been investigating charges of anti-competitive behavior by Intel.

Cuomo's subpoena seeks documents and information concerning Intel's pricing practices and possible attempt to exclude competitors through its market domination. Among other things, the AG said he's looking into whether Intel penalized its customers, primarily computer manufacturers, for purchasing x86 computer processing units (CPU) from competitors; improperly paid customers for exclusivity and illegally cut off competitors from distribution channels.

“We will also look at whether Intel abused its power to remove competitive threats or harm competition in violation of New York and federal antitrust laws," Cuomo said in a statement.

The AG's announcement was followed later in the day by statements of support by New York Senator Charles Schumer and the Computer and Communications Industry Association (CCIA), an industry group that has in the past supported investigations into alleged anticompetitive actions by AT&T, IBM and Microsoft. Ironically, Microsoft later joined the CCIA, which had supported the Justice Department's antitrust case against the software giant.

"Given the importance of the chip industry, it is important that allegations of major anticompetitive behavior not be ignored, and that a full airing and examination of the facts be undertaken," said CCIA President and CEO Ed Black. "Thus, CCIA welcomes the investigation of serious, credible accusations relating to anti-competitive behavior by Intel, and we applaud General Cuomo for his action."

Senator Schumer went further, urging that the Federal Trade Commission investigate Intel. "The FTC needs to stop looking the other way on Intel and start getting serious about enforcing antitrust law," he said. "The FTC is moving at a mega-hertz pace, in a gigahertz world."

While Silicon Valley is more associated with the chip industry than New York, there is one connection. In 2006 AMD announced plans to build a $3.2 billion dollar chip facility in upstate New York.