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Cuomo hits Intel with antitrust lawsuit
By Reuters
New York Attorney General Andrew Cuomo in New York June 5, 2008. REUTERS/Chip East
NEW YORK (Reuters) - Intel Corp <INTC.O> was sued on Wednesday by New York Attorney General Andrew Cuomo, who accused the world's largest chipmaker of scheming to maintain monopoly power in the market for microprocessors.
In a lawsuit filed in a Delaware federal court, Cuomo said Intel violated state and federal antitrust laws through a "systematic worldwide campaign" of illegal threats, bullying and coercion designed to maintain a stranglehold on the market for microprocessors for personal computers.
He said the company for several years has bribed or coerced computer makers such as Dell Inc <DELL.O>, Hewlett-Packard Co <HPQ.N> and International Business Machines Corp <IBM.N> to use its microprocessors or not use those of rivals, in exchange for "billions of dollars" of payments.
Intel's microprocessors power more than 80 percent of the world's PCs. In a conference call with reporters, Cuomo said Intel's "my way or the highway" attitude hurt companies and consumers. "We intend to stop them," he said.
Intel spokesman Chuck Mulloy rejected Cuomo's allegations and said the Santa Clara, California-based company would defend itself. "Neither customers who have benefited from lower prices and increased innovation, nor justice are being served by the decision to file a case now," he said.
An IBM spokesman declined immediate comment. Dell and Hewlett-Packard did not immediately return calls for comment.
In afternoon trading, Intel shares were up 33 cents, or 1.8 percent, at $18.83 on the Nasdaq.
Eric Corngold, a deputy New York attorney general, said Intel's scheme was revealed in e-mails and "orchestrated by the very top" of the company. "This isn't the story of a few rogue employees going too far," he said.
The lawsuit seeks to bar Intel from further anti-competitive acts, and seeks monetary and other damages.
Other regulators have also examined Intel's alleged attempt to exercise monopoly power in the computer chip market.
The Federal Trade Commission opened a formal inquiry in June 2008, and at least three of four FTC commissioners have backed the filing of a complaint, people familiar with the review have said.
An FTC representative declined to comment on Wednesday.
In May, the European Union fined Intel $1.45 billion for practices such as paying computer makers to shelve plans to launch products containing chips from rival Advanced Micro Devices Inc <AMD.N>.
South Korean and Japanese authorities have also moved against Intel for antitrust violations.
AMD has long accused Intel of abusing its market-leading position, and sued the company in 2005. That case has not gone to trial.
The case is New York v. Intel Corp, U.S. District Court, District of Delaware.
(Reporting by Jonathan Stempel; Additional reporting by Diane Bartz in Washington and Ian Sherr in San Francisco; Editing by Derek Caney and John Wallace)
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