The US Federal Trade Commission ("FTC") has filed an antitrust lawsuit against Intel Corp., the world's leading computer chip maker, charging the company with illegally using its dominant market position to stifle competition and strengthen its monopoly. The complaint follows on from the European Commission's infringement decision of May 2009 which concerned similar practices found to have harmed consumers in the EEA (resulting in Intel receiving the largest fine imposed on a single company by the Commission of €1.06 billion).
The FTC's administrative complaint alleges that Intel carried out an anticompetitive campaign using threats and rewards directed at the world's largest computer manufacturers to coerce them not to buy rival computer chips (particularly those of Advanced Micro Devices). Intel also allegedly sought to prevent computer makers from marketing any machines with non-Intel computer chips, depriving consumers of choice and innovation in the market for central processing units ("CPU"s).
The FTC charges also go further than the earlier European Commission case in that they allege that Intel embarked on a similar anticompetitive strategy in relation to 'graphics processing units' (commonly known as "GPU"s) with the aim of preserving its CPU monopoly by smothering potential competition from GPU chips.
Intel's anticompetitive tactics are claimed to violate (the relatively little used) section 5 of the Federal Trade Commission Act, which prohibits unfair methods of competition, and deceptive acts and practices in commerce. Unlike an antitrust violation, a violation of section 5 cannot be used to establish liability for follow-on private litigation. The aim is to focus the case on the protection of consumers rather than Intel's susceptibility to private treble damages actions.
The FTC complaint marks the beginning of proceedings in which the allegations will be ruled upon after a formal hearing. The case is tentatively scheduled to be heard before an Administrative Law Judge in September 2010.
Intel is currently appealing the European Commission's decision to the General Court.
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