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Intel to change practices in FTC settlement

By Jia Lynn Yang
The Federal Trade Commission is banning tech giant Intel from a slew of practices deemed unfair and deceptive as part of an antitrust settlement over charges the firm exploited its dominance in the chip market to elbow out competitors.

The FTC doesn't have the authority to fine the company — unless it violates the terms of the settlement — but the agency outlined a deal on Wednesday checking Intel's business practices. Officials said the deal would immediately benefit consumers purchasing computers by increasing competition in the chip-making business.

“This is an exceptionally important case,” said FTC Chairman Jon Leibowitz. “And the commission was deeply troubled by Intel's actions.”

The agency investigated Intel's practices going back at least 10 years and found the company “stepped well over the line.” The FTC said Intel told customers it would not sell products to them unless they agreed to stop doing business with Intel's rivals. The agency also says that Intel redesigned its central processing units, or CPUs, to throw off competitors by making it harder for their chips to work with Intel's.

Intel said in a statement Wednesday that the company does not admit to breaking the law as part of the settlement and that the agency's allegations are all false.

“This agreement provides a framework that will allow us to continue to compete and to provide our customer the best possible products at the best prices,” said Doug Melamed, Intel senior vice president and general counsel. “The settlement enables us to put an end to the expense and distraction of the FTC litigation.”

Intel has faced antitrust charges before from rival chipmaker Advanced Micro Devices. Last November the two firms agreed to a $1.25 billion settlement. The European Union has also accused Intel of anticompetitive behavior. In May 2009, the EU fined Intel $1.45 billion and told the company to stop offering customer rebates that the EU thought were coercive.

By Jia Lynn Yang  |  August 4, 2010; 12:06 PM ET
Categories:  Antitrust , FTC  
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