Bribery, Corruption, Intimidation A Day At The Office For Intel

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Intel, who is already being investigated in Europe for threatening PC vendors like Dell and HP is now being accused of”bribery and coercion” after a two year investigation by Federal agents in the USA.

Intel, who is already being investigated in Europe for threatening PC vendors like Dell and HP is now being accused of”bribery and coercion” after a two year investigation by Federal agents in the USA.

This is the same Company that was recently fined $1.6 billion by the European Union for its monopolistic practices. It is also the same Company that is facing court action for threatening and punishing PC makers that worked too closely with its arch competitor Advanced Micro Devices.

Described as one of the biggest bullies in the PC industry, Intel is again facing another probe after New York’s attorney-general last night  alleged that Intel, the world’s biggest chipmaker, had used “bribery and coercion” to maintain its dominant market position after an investigation into the Silicon Valley company lasting nearly two years.

Currently Intel is trying to move into the consumer electronics and mobile phone market; however several manufacturers such as Sony, Panasonic and LG have rejected their advances for Intel processors inside their devices claiming they are not reliable and prone to crashing.
Last month the European Commission revealed documentation which shows how Intel tried to create a monopoly by “threatening” PC vendors like Dell and HP.
They are also under investigation in Japan and Korea over similar practices.

New York Attorney General Andrew Cuomo’s action, filed in a federal court, is the most detailed and strongly worded to date.

It says”Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market. Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices. These illegal tactics must stop and competition must be restored to this vital marketplace.”

Mr Cuomo’s suit seeks to bar further anticompetitive acts, restore lost competition, collect penalties and recover damages he says were suffered by New York and consumers.

According to the Financial Times in London, the lawsuit alleges that Intel paid billions of dollars to PC makers for their exclusive use of its microprocessors, including $2bn in “rebates” to Dell in 2006. It says Intel also threatened and punished PC makers that worked too closely with its competitor Advanced Micro Devices.

It is alleged that retaliatory threats included cutting off payments in the form of rebates to PC makers, directly funding a competitor and ending joint development ventures.

New York served a wide-ranging subpoena in January last year seeking documents and information on Intel’s potentially monopolistic practices.
One internal Dell email unearthed says Intel was “prepared for jihad if Dell joins the AMD exodus”.

“We [will] get ZERO [rebates] for at least one quarter while Intel ‘investigates the details’ – there’s no legal/moral/threatening means for us to apply and avoid this.”

Intel appealed in September against a record E1.1bn ($1.6bn) fine imposed by the European Commission for abusing its dominant market position. The South Korean FTC has also fined the chipmaker.

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