Intel Corp. and its much smaller rival Advanced Micro Devices Inc. have been subpoenaed by the Federal Trade Commission about possible anticompetitive behavior in the microprocessor market, the companies said Friday.
The move by the FTC to escalate its probe to a formal investigation is the latest in a series of legal challenges facing Intel, the world's largest computer chip maker. Antitrust investigations of Intel have been launched in several countries, including the U.S., based on complaints by AMD of unfair business practices that have stunted its growth.
The dispute centers on incentives Intel offers computer makers for buying Intel chips – and the fierce retaliation AMD says those companies are threatened with if they offer products using AMD's chips.
Santa Clara-based Intel is currently fighting antitrust charges in the European Union and was fined $25.4 million this week by South Korea's antitrust regulator.
The company said Friday that the FTC's investigation was considered “informal” until the subpoena for records was served this week.
AMD claims Intel has maintained its dominance in microprocessors – the electronic brains of personal computers – by illegally threatening computer manufacturers with higher prices if they don't stick exclusively with Intel chips.
Intel commands about 80percent of the worldwide market for microprocessors. AMD has roughly 20 percent and claims it has been crippled by Intel's sales tactics.
Lengthy delays in production of new chips also have hurt AMD's competitiveness over the past year. Intel said it has been cooperating with the FTC's probe.
The company has maintained that its business practices are fully legal, despite AMD's intensifying legal challenges over the past several years, and said Friday that the “evidence that this industry is fiercely competitive and working is compelling.”
Bruce Sewell, Intel's general counsel, said that by opening a formal probe the FTC can now secure documents showing Intel's communications with customers involved in the disputed transactions.
Intel is forbidden from releasing those documents voluntarily because of a protective order in place as part of a pending antitrust lawsuit filed by AMD that's not scheduled to go to trial until 2010, Sewell said.
“From our perspective, it's not a surprising event nor is there any really substantive change in the relationship we've had with the FTC,” Sewell said.