Intel Corp. is raising questions about whether the Federal Trade Commission acted hastily in filing an administrative lawsuit against the chip maker yesterday.
The agency sent its first subpoena to Intel just last week for information on certain conduct included in its lawsuit filed yesterday, Intel’s spokesperson Chuck Mulloy confirmed to Main Justice.
The subpoena, issued on Dec. 8, was the first time the FTC asked Intel to provide information related to the graphics chip market, Mulloy said. Although the agency had opened an antitrust investigation of Intel in May 2008, yesterday’s lawsuit was the first time any regulatory agency had singled out the company’s conduct in the market related to graphics and multimedia.
Intel hired former Antitrust Division chief Doug Melamed last month. (Getty Images)
Intel had been in settlement talks with the agency. Those talks broke down over several new issues, Intel’s general counsel, Douglas Melamed, said in a conference call with reporters yesterday. The issues included graphics and benchmarks, which had not been fully investigated by the FTC, Melamed said.
“They wanted concessions on graphics that they hadn’t even investigated,” Mulloy said in an interview.
The FTC’s competition bureau director, Richard Feinstein, said in a news conference yesterday that the FTC staff had thoroughly investigated the claims outlined in its complaint.
The FTC lawsuit against the chip maker outlines a broader case against the company than other complaints have raised.
In the past, Intel has been accused of illegally inducing its customers to spurn rival products. The FTC’s case alleges that Intel also engaged in anti-competitive behavior in a separate market for chips, known as graphics processing units, that are made for heavy multimedia use.
An FTC spokesman also said the agency investigates matters for some time before issuing subpoenas for specific information.
The FTC has accused Intel of resorting to “deception and coercion” to catch up with rival innovators as it “fell behind in the race for technological superiority.”
Intel has fought back against the lawsuit by claiming that the FTC is overreaching both in its legal case against Intel and in the changes that the FTC is seeking in Intel’s behavior.
The broad scope of the FTC’s suit surprised many observers, given that Intel had previously signaled it was open to resolving the many antitrust issues against it. Last month Intel agreed to pay rival chip maker Advanced Micro Devices, Inc. $1.25 billion to settle a long-running dispute over rebates Intel offered its customers. The company also hired Melamed last month, adding a savvy insider to its team. Melamed, most recently a partner at WilmerHale, had been acting chief of the Justice Department’s Antitrust Division during the Clinton administration.
