Page last updated at 22:41 GMT, Wednesday, 4 November 2009

Intel in threats and bribery suit

Intel micro processing chip
Intel dominates the personal computer microchip market

Intel is facing a federal lawsuit that accuses it of using "illegal threats" to dominate microchip sales.

The New York attorney general accuses Intel of using "bribery and coercion" to make computer manufacturers buy its chips instead of those from its rivals.

Andrew Cuomo said the anti-competition federal lawsuit follows an investigation lasting almost two years.

Intel said in a statement that the "decision to file suit against [us] is just plain wrong".

The quicker Intel owns up to its actions the quicker it, and the entire computer industry, can move on
Ed Black, Computer and Communications Industry Association

"Neither consumers, who have consistently benefited from lower prices and increased innovation, nor justice, are being served by the decision to file a case now," it added.

In May, Intel was fined $1.5bn (£948m) by European competition authorities.

The firm denied any wrongdoing in that case and is now appealing.

'Systematic campaign'

Mr Cuomo said Intel - the world's largest maker of semiconductors - had been engaged in a "worldwide, systematic campaign of illegal conduct".

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

"Intel's actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices."

Mr Cuomo said the details of the case were revealed in email exchanges.

Intel is accused of paying millions of dollars each year - and "in some years billions" - in payoffs to computer makers in exchange for them only buying its chips.

It is further said to have withdrawn this payments to punish those computer firms "perceived to be working too closely with Intel's competitors".

Ed Black, president of trade body Computer and Communications Industry Association, said Mr Cuomo had put forward a "strong case".

"The quicker Intel owns up to its actions the quicker it, and the entire computer industry, can move on," he said.

In the European case, the European Commission ruled in May that Intel had paid manufacturers and one retailer to favour its chips over those of key rival Advanced Micro Devices between 2002 and 2007.

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