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New York attorney general files antitrust lawsuit against Intel

November 4, 2009 | 10:00 am

New York Atty. Gen. Andrew Cuomo today filed an antitrust lawsuit against Intel Corp., the world's largest chip maker, alleging that the company engaged in "a worldwide, systematic campaign of illegal conduct" to further its business and stifle competitors.

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

Cuomo's office maintained that Intel paid or threatened some of the world's leading computer makers -- Dell, Hewlett-Packard and IBM among them -- to prevent the companies from doing business with Intel's main rival, Advanced Micro Devices Inc.  The payments, the complaint alleges, came in the form of high-dollar "rebates" to the computer makers, though Cuomo's office dismissed the rebates as "payoffs" that Intel made to hide their true nature.

The case is assembled in part from internal e-mails collected from Intel's business partners and from within the company itself, according to the filing.

“'I understand the point about the accounts wanting a full AMD portfolio,'" wrote an IBM executive in 2005, according to a statement from Cuomo's office. "'The question is, can we afford to accept the wrath of Intel …?'”

Intel could not immediately be reached for comment.

The lawsuit is a result of a nearly two-year investigation by Cuomo's office, in which investigators say they evaluated millions of pages of documents and e-mails and interviewed dozens of witnesses.

The suit was filed in federal court in Delaware and aimed to bar Intel from what it called "further anti-competitive acts," and recover damages to New York consumers and government entities.

In May, the European Commission fined Intel nearly $1.5 billion over similar charges of anti-competitive practices, saying the results harmed millions of European consumers.  Intel disagreed with those charges and vowed to appeal the decision.

-- David Sarno