Intel has lashed out at the US Federal Trade Commission (FTC) following its filing yesterday of an anti-competitive lawsuit, labelling the action as "misguided".
"Intel has competed fairly and lawfully," the chip giant says in a statement. "Its actions have benefitted consumers. The highly competitive microprocessor industry, of which Intel is a key part, has kept innovation robust and prices declining at a faster rate than any other industry. The FTC's case is misguided. It is based largely on claims that the FTC added at the last minute and has not investigated. In addition, it is explicitly not based on existing law, but is instead intended to make new rules for regulating business conduct. These new rules would harm consumers by reducing innovation and raising prices."
The FTC has accused Intel of using its dominant position in the market to stifle competition and strengthen its monopoly for over a decade. It says in its complaint that Intel has waged a systematic campaign to shut out rivals’ competing microchips by cutting off their access to the marketplace. In the process, it claims, Intel deprived consumers of choice and innovation in the microchips that comprise the computers’ central processing unit, or CPU. These chips are critical components that often are referred to as the “brains” of a computer.
Intel’s anticompetitive tactics, it adds, were designed to put the brakes on superior competitive products that threatened its monopoly in the CPU microchip market. Over the last decade, this strategy has succeeded in maintaining the Intel monopoly at the expense of consumers, who have been denied access to potentially superior, non-Intel CPU chips and lower prices, the complaint states.
“Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly,” says Richard 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. The Commission’s action today seeks to remedy the damage that Intel has done to competition, innovation, and, ultimately, the American consumer.”
In response, Intel senior vice-president and general counsel, Doug Melamed says: "This case could have, and should have, been settled. Settlement talks had progressed very far, but stalled when the FTC insisted on unprecedented remedies – including the restrictions on lawful price competition and enforcement of intellectual property rights set forth in the complaint — that would make it impossible for Intel to conduct business.
"The FTC's rush to file this case will cost taxpayers tens of millions of dollars to litigate issues that the FTC has not fully investigated," Melamed says. "It is the normal practice of antitrust enforcement agencies to investigate the facts before filing suit. The Commission did not do that in this case."