New York launches antitrust investigation of Intel

New York state Attorney General, Andrew Cuomo, has launched an antitrust investigation of Intel, and on Thursday, his office served a wide-ranging subpoena on the company.

Cuomo is investigating whether Intel violated state and federal antitrust laws by coercing customers to exclude its main rival, Advanced Micro Devices, from the worldwide market for PC CPUs (central processing units), Cuomo said in a news release.

The subpoena seeks information on Intel's pricing practices and possible attempts to exclude competitors through its market power, Cuomo's office said.

Intel's conduct warrants "a full and factual investigation," Cuomo said in a statement. "Protecting fair and open competition in the microprocessor market is critical to New York, the United States, and the world. Businesses and consumers everywhere should have the ability to easily choose the best products at the best price and only fair competition can guarantee it."

An Intel spokesman, Chuck Mulloy, confirmed that Intel has received a subpoena from Cuomo's office. Intel intends to "work very hard to comply with the request," he said.

"We believe our business practices are lawful, and we believe the microprocessor market is competitive," Mulloy added.

Cuomo's office, in the subpoena, is seeking information on whether Intel penalized customers, including computer manufacturers, for purchasing CPUs from competitors, his office said. Cuomo also wants to know whether Intel improperly paid customers for exclusivity and whether the company illegally cut off competitors from distribution channels.

Intel sells about 80 per cent of the CPUs contained in PCs, Cuomo noted.

Authorities in Europe and Asia have also investigated Intel for monopolistic practices, with the European Commission accusing Intel in July 2007 of abusing its dominant position in the microprocessor market. Intel filed a response to the European complaint earlier this month.

In 2005, the Japanese Fair Trade Commission concluded that Intel violated its competition laws.