US government antitrust investigators plan to recommend within the next week that the Federal Trade Commission charge chipmaker Intel Corp with unfairly using its market clout to strong-arm corporate customers, according to lawyers familiar with the case.
The lawyers say the case would focus on charges that in disputes with the customers, Intel has at times refused to provide them with key technical information about its chips that the companies need to build their products. Because much of the personal computer industry is based on Intel technology, the FTC would allege, such action can effectively cripple a computer maker's efforts in the market.
Last week the US government sued software company Microsoft Corp, alleging a variety of anti-competitive practices that Microsoft denies. An action against Intel would expand the federal government's antitrust front to the other giant of the personal computer industry, a company that makes roughly 85 per cent of the microprocessor chips used in the world's PCs.
For years, computer companies have grumbled that Intel uses its market power in unfair ways. A series of past FTC probes, however, have always stopped short of taking action.
"It's a non-public investigation, and so we have no comment on what the FTC may be doing," Chuck Mulloy, a spokesman for Intel, said of the latest probe. Launching an antitrust case requires a majority vote of the five FTC commissioners, which could take several weeks. During that time, Intel may work hard to find grounds to settle with the US government, industry sources suggested.
But the FTC also is continuing to ask questions about the chipmaker, which could result in a second suit with a broader focus, lawyers said.
Over the years, investigators have looked into allegations that Intel unfairly pressures computer makers not to use rival chips, but they have taken no action.
If filed, the suit would focus on Intel's relations not with competitors but with companies that incorporate Intel technology into their own products.
To design such products that will use Intel microprocessors, computer makers need detailed descriptions from Intel about its forthcoming chips. Trying to design a computer without such information would be like trying to build a car without knowing what sort of engine it might have. The FTC suit would allege that when Intel gets into disputes with companies, it sometimes withholds information from them in illegal ways or threatens to do so.
