Intel, the leader in computer processors, is under investigation for monopolizing the market due to their pricing of microprocessors. Intel prices are so low and has such a huge market share that competition is said to be virtually nonexistent.
The Federal Trade Commission (FTC) has launched a formal investigation into the pricing strategies of
Intel related to anticompetitive conduct, according to a
news report.
In a market that brings in $2.25 Billion US dollars annually, the investigation is one of global magnitude and is considered the most important antitrust issue since the 1990's Microsoft case.
Korean Fair Trade Commission said it would order Intel to pay more than $25 million for violating its fair trade laws. The Korean commission found that Intel violated antitrust law when it offered $37 million in rebates to the personal computer makers, Samsung Electronics and the Trigem Company, from 2002 to 2005 in return for a pledge not to buy microprocessors from AMD Intel responded by saying it was disappointed with the decision and would probably appeal.
Lawyers involved in the proceedings say they expect that European regulators will expand their statement of objections, or official charge sheet, against Intel. Last year, the European Commission said the company had engaged in anti-competitive conduct by providing rebates to customers that limit their business with rivals and by paying computer makers to either delay or cancel the release of products that used AMD microprocessors.
This investigation may pave the road for the future of antitrust cases in the United States as current administration policies are nearing an end as far as support and the new FTC Chairman, William Kovacic, is ready for some changes.
A previous decision by Deborah Majoras blocked investigations into Intel's practices, creating frustration among commission officials. She was also a player in the 2001 Microsoft antitrust settlement under the current administration. Majoras stepped down a couple of months ago, opening up the door for Kovacic.
It will be months before the formal investigation turns up any possible evidence to substantiate a case against Intel.
FTC Chairmen are appointed directly by the President of the United States.
Does the stepping down of one Chairman, who openly opposed an investigation into Intel and the requests of other commissioners, reflect the policies of the administration? Will a new administration reflect the beliefs of the new Chairman?
The results will be interesting, to say the least.
