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FTC slaps Intel with antitrust suit

The U.S. Federal Trade Commission sued Intel Corp. on antitrust grounds Wednesday, accusing the computer chip maker of trying to snuff out competition in its sector.

Computer chip maker paid $1.2B in November to settle similar charges from rival

The U.S. Federal Trade Commission sued Intel Corp. on antitrust grounds Wednesday, accusing the computer chip maker of trying to snuff out competition in its sector.

A Lenovo netbook equipped with an Intel processor is shown at the International Consumer Electronics Show in Las Vegas. Intel faces numerous lawsuits over antitrust claims.

In November, Intel paid $1.2 billion in fines to settle with its largest rival, Advanced Micro Devices, over allegations that over the last several years Intel extracted exclusive arrangements from large computer makers which agreed to use Intel microprocessors in exchange for payments totalling billions of dollars.

A separate suit launched by New York Attorney General Andrew Cuomo is outstanding on the same issue. It alleges that to obtain exclusive agreements, Intel paid billions in so-called "rebates" to individual computer makers. These rebates were actually just payoffs that Intel invented to disguise their anticompetitive nature, the suit reads.

Intel's x86 microprocessors — the "brains" of most personal computers — are usually sold as components to computer makers, as opposed to the general public. Intel sales to IBM, Dell and Hewlett-Packard are swept up in the probe. The suit alleges that Intel paid Dell more than $2 billion US in 2006 — more than the computer maker's profit for the year.

The FTC said in a statement Wednesday it is seeking a court order to bar Intel from using "threats, bundled prices, or other offers to encourage exclusive deals, hamper competition, or unfairly manipulate the prices" on its products.

In its complaint Wednesday, the FTC said Intel has used both threats and rewards to keep some of the biggest computer makers from buying other companies' chips or marketing computers that carried them.

The FTC also says Intel has secretly redesigned critical computer software to hinder the performance of other companies' microprocessors, or CPUs.

In addition, the agency said Intel is looking to extend its dominance into chips that are used to processes graphics, commonly known as GPUs.

"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."

Intel has not immediately commented on the FTC suit.

In May, the European Union imposed a record fine of $1.45 billion on Intel for numerous antitrust violations. Intel is appealing that ruling.

With files from The Associated Press