The Federal Trade Commission sued Intel, claiming that it had used its monopoly power in the market to squeeze its clients. Intel has refused to supply some companies with information on its products. It claims that it has every right to do this; the FTC contends that as a monopoly, it has special responsibilities and is in breach of antitrust rules.
The action will go through an internal FTC court, and could take a year to be heard. Intel's shares fell on the news, losing $0.5 to $69.3125
Intel supplies four-fifths of the chips for personal computers. Microsoft, the dominant producer of software, is also currently the subject of legal action by the US Department of Justice. The personal computers which the two produce for are known as "Wintel" systems, combining Intel chips and Windows software. The Intel move, combined with the Microsoft action, seems to signal a harder line on monopolies in the US.
William Baer, the FTC's chief litigator, charged that Intel had withheld information from Digital Equipment Corporation, Intergraph Corporation and Compaq Computer. "The case the commission is bringing seeks to prevent Intel from repeating this conduct in the future," he said.
He alleged that Intel had forced the three companies to share information on their own products and when this was refused, had withheld technical data. "In at least three separate cases against three major customers, Intel used its market to cut off these customers who had asserted their own patent rights with respect to microprocessors and related technologies that rivalled Intel's technology," he said.