SAN JOSE, Calif. - Escalating the legal woes of the world's largest computer-chip maker, the Federal Trade Commission has opened a formal probe into Intel Corp.'s sales tactics. The move is a victory for the company's much smaller rival, Advanced Micro Devices Inc.
Intel disclosed yesterday that it received a subpoena from the FTC for records about Intel's microprocessor sales, which dominate the world market with a roughly 80 percent share.
The FTC's two-year investigation had been considered "informal" until now, and Intel said it has been cooperating. The company is already fighting antitrust charges in the European Union and was fined this week by antitrust regulators in South Korea.
By opening a formal investigation, Intel said, the FTC will be able to get access to documents revealing Intel's communications with certain customers - documents Intel couldn't voluntarily provide because of a protective order that is part of a sweeping antitrust lawsuit AMD filed in 2005 that isn't expected to go to trial until 2010.
"From our perspective, it's not a surprising event nor is there any really substantive change in the relationship we've had with the FTC," Bruce Sewell, Intel's general counsel, said in an interview.
The intensifying look at Intel's business practices is a result of AMD's long-running campaign to convince antitrust regulators around the world that its business has been hurt by Intel's aggressive tactics.
AMD also said yesterday that it received a subpoena this week from the FTC - though the company said it was not a target of the investigation.
The two companies have been fighting for years over what AMD claims is Intel's intimidation of computer makers into striking exclusive deals for the chips they use in their new machines.
AMD claims the rebates and financial incentives Intel offers to those companies for buying more Intel chips are designed to prevent AMD from gaining market share - and that Intel threatens those manufacturers that it will retaliate if they introduce computer models based on AMD's chips.
AMD argues that Intel's volume discounts are sometimes so steep that AMD can't cut its own prices enough to compete without losing money on the sales.
Intel has repeatedly denied breaking any laws. It said yesterday that the sharp drop in microprocessor prices over the last seven years shows that the "evidence that this industry is fiercely competitive and working is compelling."