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AMD: Article

FTC Starts Formally Investigating Intel for Antitrust

Answering AMD's Prayers

The Federal Trade Commission has decided to formally investigate Intel for antitrust for pushing AMD to the wall with its sales incentives, an answer to a prayer AMD has been saying for years now.

AMD supposedly only brought its mammoth private antitrust suit against Intel in a Delaware federal court in 2005 because no American regulators would investigate Intel.

News of the FTC’s action broke on the heels of South Korea deciding to fine Intel $25.4 million (practically a rounding error) for abusing its dominant position and offering $37 million in rebates to Samsung and Trigem allegedly in exchange for freezing out AMD. Korean authorities said AMD couldn’t have competed even if its chips were free.

Intel is expected to appeal but can’t do anything until it gets a copy of the final determination, which could take a while.

Anyway, the FTC’s decision is supposed to have been made by the commissioners themselves, not the staff, who have been investigating Intel informally since 2006.

And supposedly the decision to act has a lot to do with the departure of FTC chairman Deborah Majoras, who’s reportedly been stifling the pro-investigation camp for months.

The commissioners supposedly want to be able to look their offshore counterparts in the eye and not come across as wimpy. Intel denies a report in the Wall Street Journal claiming that the FTC acted on some damning new evidence.

Now under formal investigation, Intel will be able to turn over third-party discovery – like contracts, costs, pricing information, negotiation collateral and communications – collected from PC makers for the AMD antitrust case that it couldn’t previously give to the FTC because of a 2006 protective order. It can now thanks to an FTC subpoena. Aside from Intel and AMD the FTC has also served subpoenas on unidentified PC makers directly.

Intel maintains that its pricing policies are within the law and points to a dozen or so Supreme Court decisions that it says back it up. And it has repeatedly denied AMD’s allegation that it sells chips for less than cost and reacts to such contentions as if somebody just defiled its copy of the Koran.

Meanwhile, the European Commission is expected to expand on the antitrust charges it made against Intel last year.

The state of New York is also investigating AMD’s antitrust claims.

A Japanese investigation of Intel and its rebates wound up with Intel maintaining its innocence but signing a consent decree anyway in 2005. In the decree Intel reportedly promised not to put exclusivity clauses in its contracts; it claims it never had exclusivity clauses in its contracts.

AMD later filed suit against Intel in Japan allegedly because the Japanese regulators weren’t punitive with Intel.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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