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By | Austin Modine 30th August 2007 21:24

US antitrust group urges Intel investigation

Wants more vigorous FTC probing

The American Antitrust Institute (AAI), a Washington DC lobby group, has written an open letter to the Federal Trade Commission urging an investigation of Intel's allegedly monopolistic business practices.

The letter, directed to FTC chairwoman Deborah Majores, notes similar investigations by the European Commission and in Japan and Korea. The AAI hopes to convince the matter isn't just a concern of duty, but of red-white-and-blue American pride:

"The U.S. government — especially the FTC — should reclaim its traditional role as leading antitrust enforcer, especially when it is two U.S. corporations that are involved and the rest of the industrialized world is so concerned."

AAI say its insistence of an investigation is based on allegations by AMD in a private case and information obtained by the EC's complaint, which have not been made public. In particular, it alleges that Intel has fashioned a rebate policy that keeps OEM vendors from switching to AMD.

"Intel is clearly a monopolist in the microprocessor manufacturing industry, which for practical purposes is a global duopoly whose control over an essential ingredient for high technology makes it a critical focal point for competition policy. There seems to be no compelling evidence that this industry is a natural monopoly, so it becomes especially important to be vigilant against strategies by the dominant firm that might eliminate or cripple its only rival's ability to gain substantial market share as a result of its hard-won and pro-competitive innovations and efficiency."

A copy of the letter is available here (PDF warning).

The FTC said it would not comment on an ongoing investigation.

The organization, however, hasn't been shy about poking around Intel's offices. The chipmaker announced today it has received a second request for information from the FTC. Unlike the EU's charges, the FTC's latest action is in regards to the proposed venture with STMicroelectronics. The two have inked an agreement to create an independent flash memory company based in Geneva. The company will compete against a partnership between AMD and Fujitsu to create flash memory for mobile devices.

Intel said that no estimate is being provided on the transaction's closing date, but it will respond promptly to the information request. If the FTC determines the deal is on the up-and-up, federal law requires a 30-day waiting period before the deal can be closed. ®

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