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June 6, 2008 9:09 AM PDT

FTC plans formal investigation of Intel

by Tom Krazit
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Updated 10:00am PT with statement from AMD

Intel's business practices will come under the scrutiny of the U.S. Federal Trade Commission, which has opened a formal antitrust investigation of the chipmaker.

The New York Times, citing lawyers and government officials, reported on Friday morning that subpoenas have begun to arrive at the offices of the world's major PC companies.

Intel has been under intense scrutiny in other parts of the world, especially in Europe, South Korea, and Japan, but it has faced little objection to its business practices here at home in recent years, other than a recent investigation launched at the state level by New York Attorney General Andrew Cuomo.

An FTC representative declined to comment on the investigation, citing its policy of neither confirming nor denying the existence of any ongoing investigations. But Intel confirmed the investigation in a statement issued Friday morning.

"On June 4, the U.S. FTC served a subpoena related to Intel's business practices with respect to competition in the microprocessor market. Since 2006, Intel has been working closely with the FTC on an informal inquiry into competition in the microprocessor market, and has provided the commission staff with a considerable amount of information and thousands of documents," according to the statement. "By proceeding to a subpoena, the commission will be able to obtain not only information that Intel has already committed to provide but also information from other parties. Consistent with its standard practice, Intel will work cooperatively with the FTC staff to comply with the subpoena and continue providing information."

Intel's main opponent, Advanced Micro Devices, has filed an antitrust suit against the company in the federal courts over Intel's alleged practice of offering favorable pricing discounts to PC makers in exchange for keeping AMD's chips out of their system, which Intel has denied. That case is winding its way through the court system, and it shows no signs of coming to a trial anytime soon.

UPDATED 10:00 am PT - AMD issued a statement after news of the investigation was released. "Intel must now answer to the Federal Trade Commission, which is the appropriate way to determine the impact of Intel practices on U.S. consumers and technology businesses. In every country around the world where Intel's business practices have been investigated, including the decision by South Korea this week, antitrust regulators have taken action."

Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple. E-mail Tom.
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by nicmart June 6, 2008 11:10 AM PDT
Why is the FTC intent on destroying American competitiveness? There are demonstrably harmful cartels which the FTC could attend to, such as among physicians, attorneys, taxi drivers, and the myriad guilds which the states have created through licensing. Then there are the monopolies created by local governments, such as in cable TV and power generation. Instead, the FTC wants to harm manufacturers in industries which are very competitive.
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by smokified June 6, 2008 11:51 AM PDT
Well put.
by smokified June 6, 2008 11:18 AM PDT
Maybe if AMD could puke out a good chip once in a while it would not be so easy for Intel to convince retailers to not use AMD's chips.....

If intel is able to sell chips at lower costs and still maintain the income they need, who cares? AMD is having issues because of their own poor product, not because of Intel's ability to sell their superior product for less.
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by Kavajim June 6, 2008 12:19 PM PDT
http://www.tomshardware.com/charts/processors/3d-studio-max-9,369.html
by Commander_Spock June 6, 2008 11:38 AM PDT
How about if companies make a better "mouse trap" (chip) than Intel rather complaining to their mommies and daddies in "Europe, South Korea, and Japan..."; and now the USA.

Now, "All of your (Silica Sand) Base (in South America) are belong to us" (Intel)!
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by Kavajim June 6, 2008 12:17 PM PDT
Intel DID offer discounted wholesale prices to Gateway, my former employer, to go with them exclusively and drop AMD. Customers were upset that did CAD/autoCAD because the Intel chips ONLY did better at digital video.....not numbers crunching as in a CAD program.

It was common knowledge of the monopoly deal throughout the company.
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by Commander_Spock June 6, 2008 12:43 PM PDT
Re: "Intel chips ONLY did better at digital video.....not numbers crunching as in a CAD program...". Remember the Intel's sales and marketing campaign - "The computer that is is the inside the computer" - That sales and marketing matters.... ask Microsoft if Windows was a better Operating System than OS/2!
by Commander_Spock June 6, 2008 12:32 PM PDT
Re: "All of your (Silica Sand) Base (in South America) are belong to us" (Intel)!

In the below attached substitute "AMD" against "Intel" for "IBM" against "Microsoft"!

http://www.youtube.com/watch?v=ksFqjI3gyAo

Now, where in the world is that "Silica Sand" in that Google Maps-like "search" competition?
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by Commander_Spock June 6, 2008 7:24 PM PDT
Hey FTC, we would like to become a monopoly. Our nature of business would be trading sub-standard "Intel computer chips" for imported "petroleum products"; and, while we are at it we would to hire some "H-1B services" to do the "maths/economics" (AMD's chips being better than ours in this respect according to an earlier comment) for the "ranking" of our business operations (among others) within the context of the present US Economy.
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