Second antitrust lawsuit against Intel

This is the second time the company has been accused of anti-competitive behaviour this year, following a lawsuit by the European Commission in May, which resulted in a fine of £922million. Intel has been accused of striking deals in which computer makers such as Dell, Hewlett Packard and IBM agreed to choose its microprocessors over those of competitors in return for 'rebates' estimated to be worth billions of dollars. The lawsuit followed complaints by rval company, Advanced Micro Devices. Attorney General Andrew Cuomo said: "In Intel's market, there were no laws of supply and demand. Instead, it was the law of 'my way or the highway'. Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market. Intel's actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices." Among the allegations are that Intel encouraged hardware manufacturers to use its products which were withdrawn if customers marketed any products with AMD's chips. Evidence included an email between Intel's chief executive, Paul Otellini and Dell's chief executive, Michael Dell, in which Dell complained of a loss of market leadership since using Intel's microprocessors. After mentioning that alternative suppliers were being considered, Otellini's reply reiterated that Intel was transferring over $1billion a year to Dell. "This was judged by your team to be more than sufficient to compensate for the competitive issues," the email continued. Cuomo concluded: "Intel has engaged in a systematic worldwide campaign of illegal, exclusionary conduct to maintain its monopoly power and prices in the market for x86 microprocessors. By exacting exclusive or near exclusive agreements from large computer makers in exchange for payments totalling billions of dollars, and threatening retaliation against any company that did not heed its wishes, Intel robbed its competitors of the opportunity to challenge Intel's dominance in key segments of the market. This illegal behaviour was highly detrimental to consumers, competition and innovation."