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Intel could face US federal anti-trust investigation, say legal experts

Intel could be facing a US federal investigation as the number of legal complaints against the chipmaker's business practices begin to mount up.

The latest complaint by New York attorney general Andrew Cuomo after a 22-month investigation alleges that Intel spent up to $6bn to coerce computer makers such as Dell, HP and IBM into using its chips instead of those from rival AMD.

The suit charges that Intel violated state and federal anti-monopoly laws by engaging in a worldwide, systematic campaign of illegal conduct to maintain its monopoly power and prices in the market for microprocessors.

Intel is accused of extracting exclusive agreements from large computer makers to use Intel's microprocessors in exchange for payments totalling billions of dollars and punishing computer makers perceived to be working too closely with rivals.

But US legal experts believe the case could lead to a much bigger case against Intel similar to the US Department of Justice's anti-trust case against Microsoft in 1998.

A federal case is thought to be likely in the light of the Federal Trade Commission's announcement earlier this year that it will take a more stringent approach to enforcing US anti-trust legislation.

There are also similarities between the complaints against Intel and those against Microsoft, where a dominant technology supplier is accused of abusing its power to keep out smaller rivals.

A federal case could also broaden the investigation to look at whether Intel's actions have limited innovation in the chip industry, according to a former FTC official.

Intel is likely to come under severe pressure as it prepares to defend itself in New York at the same time as private US anti-trust cases filed by AMD and graphics chip maker Nvidia.

Intel has been found guilty on similar charges by anti-trust regulators in Korea, Japan and Europe.


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