Intel faces lawsuit over chip discounts

NEW YORK - Intel, the world's leading microchip maker, which is already facing the largest European Union fine for anti-competitive practices, was yesterday hit with more legal action in its main market, the US.

The company has been accused by the US Federal Trade Commission (FTC) of abusing its dominant position by offering deep discounts to computer manufacturers that agreed not to use any other company's chips.

Intel had been hoping to settle the long-running investigation, particularly after agreeing to pay rival Advanced Micro Devices (AMD) US$1.25 billion ($1.74 billion) last month. The company reacted angrily to the FTC's decision to launch a civil lawsuit. Doug Melamed, Intel's senior vice-president, said the commission insisted on unprecedented remedies.

Intel, which has a market share of about 80 per cent, has been found in violation of monopoly laws in several countries, including Japan, and in the EU, where it was ordered to pay €1.06 billion ($2.14 billion). Under its settlement with AMD, Intel agreed to abide by a set of business practice provisions. The FTC decided those promises, nor others offered by Intel during talks, did not go far enough towards preventing abuse.

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