US Govt sues Intel
By Sumir Singh

Intel dominates the computer chip market and earned revenues of $9.4 Billion in the last quarter. Intel India is one of the jewels of this international company.

The US Government set up the Federal Trade Commission (FTC) in 1914 and tasked it with consumer protection and competition jurisdiction in broad sectors of the economy. The FTC has sweeping powers to ensure that every business operating in USA follows the laws of the land and does not abuse its market power.

FTC has now sued Intel for misusing its market dominance to stifle competition required by any free market.  The FTC press note read

“
FTC Charges Intel Anticompetitive Tactics Have Stifled Innovation and Harmed Consumers

The Federal Trade Commission today sued Intel Corp., the world’s leading computer chip maker, charging that the company has illegally used its dominant market position for a decade to stifle competition and strengthen its monopoly.

In its complaint, the FTC alleges that Intel has waged a systematic campaign to shut out rivals’ competing microchips by cutting off their access to the marketplace. In the process, Intel deprived consumers of choice and innovation in the microchips that comprise the computers’ central processing unit, or CPU. These chips are critical components that often are referred to as the “brains” of a computer.

According to the FTC complaint, Intel’s anticompetitive tactics were designed to put the brakes on superior competitive products that threatened its monopoly in the CPU microchip market. Over the last decade, this strategy has succeeded in maintaining the Intel monopoly at the expense of consumers, who have been denied access to potentially superior, non-Intel CPU chips and lower prices, the complaint states.

“Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly,” said Richard A. Feinstein, Director of the FTC’s Bureau of Competition. “It’s been running roughshod over the principles of fair play and the laws protecting competition on the merits. The Commission’s action today seeks to remedy the damage that Intel has done to competition, innovation, and, ultimately, the American consumer.”

The FTC’s administrative complaint charges that Intel carried out its anticompetitive campaign using threats and rewards aimed at the world’s largest computer manufacturers, including Dell, Hewlett-Packard, and IBM, to coerce them not to buy rival computer CPU chips. Intel also used this practice, known as exclusive or restrictive dealing, to prevent computer makers from marketing any machines with non-Intel computer chips.
“

So when will the case be heard in court?  The FTC is telling media that it is tentatively scheduled to be heard before an Administrative Law Judge on September 15, 2010, at 10:00 a.m.

If convicted, Intel faces fines totaling hundreds of millions of dollars.