WASHINGTON — After sitting on the sidelines while regulators across the globe investigated allegations of improper business practices by Intel Corp., U.S. officials have decided to join in.
Under the leadership of a new chairman, the Federal Trade Commission has launched a formal investigation of how Intel wields its power as the world's largest maker of semiconductors, the company said Friday. The move set the stage for the lengthy battle between Intel and rival Advanced Micro Devices Inc. to come to a head. But it still might be years before the disputes are resolved.
Advanced Micro has alleged that Intel used steep discounts and other tactics to bully computer makers into using its microprocessors, the brains inside PCs. Intel sold about 80% of the world's computer chips in 2007, while Advanced Micro had about 13% of the market, according to ISuppli Corp.
"An awful lot is at stake," said Bert Foer, president of the American Antitrust Institute, a consumer-focused advocacy group partially funded by Advanced Micro that has urged the commission to start a formal inquiry.
With microprocessors important not just in computers but in a host of other devices, shoppers should be concerned about the competitive dynamics of the marketplace, he said.
"If it's competitive, they'll pay less," he said. "If it's dominated by one company, they'll pay more."
Intel and Advanced Micro said they had received subpoenas from the commission, which had declined to escalate an informal inquiry under its previous chairwoman, Deborah Platt Majoras.
Intel shares dropped 97 cents, or 4%, to $22.90 on Friday. Advanced Micro was off 35 cents, or 4.5% to $7.43.
The FTC inquiry comes as European regulators work to finish their own investigation into allegations that Intel abused its market dominance. Advanced Micro's complaints of anti-competitive behavior by Intel are also the subject of a continuing private lawsuit in Delaware, an investigation by New York state officials and completed investigations in Japan and South Korea.
Intel said it had received a subpoena from the FTC on Wednesday. The Santa Clara, Calif.-based company promised to "work cooperatively" with the FTC, as it said it had done since the agency started the informal inquiry in 2006. Intel said that it welcomed the investigation and that its practices were legal. The company predicted vindication.
