The Federal Trade Commission has, at long last, brought an antitrust suit against Intel. The leviathan of the microchip industry has used its enormous market power — it controls 80 percent of the global microprocessor market and more than half the market for graphics chips — to shut rivals out, suppressing competition and reducing consumers’ choices.
If successful, the F.T.C.’s case could open the door to increased innovation from rival firms in one of the most vital sectors of the American economy.
Intel has suffered a string of legal challenges and defeats around the world. In May, the European Commission fined it $1.5 billion for abusing its power by offering illegal rebates to computer makers that purchased all or most of their chips from Intel and threatening to punish those who bought too much from rivals. Japan and South Korea have also acted against Intel.
In November, Attorney General Andrew Cuomo of New York filed an antitrust suit against Intel. That month, the company paid $1.25 billion to settle a suit brought by its main rival, Advanced Micro Devices, for allegedly using illegal tactics to defend its near-monopoly.
The F.T.C.’s case is broader. It charges that Intel redesigned software to slow the performance of A.M.D.’s chips. And it argues that Intel is applying the same bullying strategy to the growing market for graphics chips used to run video on computers. It alleges Intel has engineered its processors to ensure that graphics chips made by A.M.D. and another rival, Nvidia, won’t run smoothly on a computer that uses an Intel central processor.
The F.T.C. wants Intel to stop using threats, bundled prices or other offers to encourage exclusive deals, hamper competition or distort prices. It said it may seek an order stopping Intel from making or distributing products that impair the performance of rival chips. Intel says the F.T.C. case is misguided and argues that the remedies would hinder product improvements, limit its ability to protect its intellectual property and make it impossible for the company to compete on price.
We believe it is long overdue. Monopolies have been given too easy a ride over the last decade — and American businesses and consumers have paid the price.
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