NY: Intel violates antitrust statutes

NEW YORK (AP) — New York’s attorney general hit Intel Corp. with an antitrust lawsuit Wednesday, claiming the company used “illegal threats and collusion” to dominate the market for computer microprocessors.

Following a similar case in Europe, Attorney General Andrew Cuomo claimed that the world’s biggest computer-chip maker paid billions of dollars in kickbacks to computer manufacturers and retaliated against those that did too much business with Intel’s competitors, namely Advanced Micro Devices Inc.

Intel used its market prowess to “rule with an iron fist,” Cuomo said.

“Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market,” Cuomo said in a written statement. “Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices.”

An Intel spokesman, Chuck Mulloy, denied the charges and said the company’s sales practices were legitimate.

“We never threatened anyone,” he said.

The lawsuit, filed in U.S. District Court in Wilmington, Del., is the latest in a string targeting Intel’s practice of paying large annual rebates to big customers.

Intel has described the rebates as simple volume discounts, but some regulators have disagreed. The European Union fined the company $1.45 billion in May, a decision Intel is appealing to EU courts.

Intel’s closest competitor, AMD, sued Intel in the same court four years ago, accusing it of anticompetitive behavior. Cuomo’s lawsuit mirrors many of the allegations in AMD’s case, which is scheduled to go to trial in a few months. Cuomo said Intel’s rebates were illegally designed to squash competition.