The Federal Trade Commission (FTC) has opened a formal antitrust investigation of Intel. The officials and lawyers accuse Intel of abusing its power to lock AMD out of the processor market.
The officials and lawyers said that in recent days Intel, its smaller rival Advanced Micro Devices, and several of the world’s largest personal computer makers that buy semiconductors from the two companies have begun to receive subpoenas from the commission.
The investigation into accusations that Intel’s pricing policies have been designed to maintain a near-monopoly on the microprocessor market was authorized by William E. Kovacic, the new chairman of the trade commission, and has the support of the agency’s other commissioners.
It reversed a decision by his predecessor, Deborah P. Majoras, who had been blocking the formal inquiry for many months, frustrating other senior commission officials and some lawmakers on Capitol Hill.
Earlier this week South Korea gave Intel a $25 million antitrust fine. Intel Corporation today issued the following statement in response to the issuance of a subpoena from the United States Federal Trade Commission (U.S. FTC):
On June 4 the U.S. FTC served a subpoena related to Intel's business practices with respect to competition in the microprocessor market. Since 2006 Intel has been working closely with the FTC on an informal inquiry into competition in the microprocessor market and has provided the commission staff with a considerable amount of information and thousands of documents. By proceeding to a subpoena, the Commission will be able to obtain not only information that Intel has already committed to provide but also information from other parties. Consistent with its standard practice Intel will work cooperatively with the FTC staff to comply with the subpoena and continue providing information.
The company believes its business practices are well within U.S. law. The evidence that this industry is fiercely competitive and working is compelling. For example, prices for microprocessors declined by 42.4 percent from 2000 to end of 2007. When competitors perform and execute the market rewards them. When they falter and under-perform the market responds accordingly.