Andrew Cuomo guns for Intel

After coming down on bankers bonuses, New York Attorney General Andrew Cuomo has now trained his guns on Intel Corporation, the world's largest maker of computer microprocessors, and filed a federal antitrust lawsuit against the company for allegedly paying billions of dollars in kickbacks to computer makers to stop using chips made by rivals.

The new lawsuit against Intel comes close on the heels of the European Commission imposing a record $1.44 billion fine on Intel in May 2009 for abusing its dominance in the computer chip market to exclude its only serious rival, AMD (See: EU fines Intel record $1.44 billion in anti-trust case) and published its verdict in a non-confidential version of its decision adopted on 13 May 2009 stating that Intel broke EC Treaty antitrust rules (Article 82) by engaging in two types of illegal practices to exclude competitors from the market for computer chips called x86 central processing units (CPUs). (See: European Commission finds Intel guilty of stifling competition)

Filing a lawsuit yesterday in the US District Court of Delaware, the New York Attorney General claims that Intel violated state and federal antitrust laws by "engaging in a worldwide, systematic campaign of illegal conduct" that involved threatening and bribing executives at firms like Dell, Hewlett-Packard and IBM.

Cuomo alleges that over the last several years, Intel has extracted exclusive agreements from large computer makers in which they agreed to use Intel's microprocessors in exchange for payments totaling billions of dollars.

Intel also threatened to and did in fact punish computer makers whom it perceived to be working too closely with its competitors. Retaliatory threats included cutting off payments the computer maker was receiving from Intel, directly funding a computer maker's competitors, and ending joint development ventures.

''Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market,'' said Cuomo. ''Intel's actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices. These illegal tactics must stop and competition must be restored to this vital marketplace.''