New York accuses Intel of antitrust violations

Stephen Withers
Thursday, 05 November 2009 10:53

IT Industry - Strategy

New York has filed an antitrust suit against Intel, alleging the chipmaker engaged in illegal conduct in its dealings with  computer makers Dell, IBM and HP.

An antitrust suit against Intel brought by New York Attorney General Andrew Cuomo alleges that the chipmaker paid billions of dollars to computer manufacturers in return for their exclusive use of Intel CPUs.

The allegations involve federal and state anti-monopoly laws.

"Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market," said Cuomo.

"Intel's actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices. These illegal tactics must stop and competition must be restored to this vital marketplace."

Individual manufacturers received "hundreds of millions of dollars annually - and in some years billions of dollars - in so-called 'rebates'," officials claimed.

"Sometimes, the payments from Intel exceeded a company's reported quarterly net income."

The alleged objective was to lock AMD out of the major PC manufacturers, or where that was not possible, to impose a small cap on the share they could achieve at any of the biggest OEMs.

The AG's office claims massive payments were made to Dell, HP and IBM - please read on.