Intel pays $6.5 million in New York antitrust case

February 10, 2012 | 11:35

Tags: #andrew-cuomo #antitrust #monopoly #new-york

Companies: #amd #intel

Intel has finally settled a three-year antitrust case brought on behalf of the state of New York by then-attorney general and current governor Andrew Cuomo for $6.5 million.

In the 2009 lawsuit, Cuomo accused Intel of a 'systematic worldwide campaign' of anticompetitive activities including, but not limited to, massive subsidies, incentives and kickbacks totalling billions of dollars if customers chose Intel chips over rival processors from the likes of AMD.

When the carrot didn't work, Cuomo claimed Intel turned to the stick. For manufacturers who refused to play ball and chose to stock machines with non-Intel processors, prices were suddenly hiked and stock constrained so as to put a squeeze on shipment times and margins.

The lawsuit originally looked for triple damages calculated over a period of four to six years. Sadly for New York's coffers, Judge Leonard Stark limited the claim to standard damages and a three-year period. As a result, the settlement has come to a mere $6.5 million.

Okay, so that might sound like a lot, but let's put it into perspective: the company's profits for 2011 totalled $12.9 billion. As a result, the $6.5 million settlement shaves a mere 0.05 per cent off that total. To put it another way, the company has lost just over three hours' profit.

Additionally, the terms of the settlement mean that Intel has been able to end the lawsuit without having to admit wrongdoing. As a result, if anyone else feels like having a go at Intel they won't be able to use this case as evidence of monopolistic activities.

This isn't the first time Intel's been slapped over its allegedly anticompetitive nature. Back in 2009, the European Union hit the company with a £948 million fine for the self same activities of which Cuomo complained.

At the time, competition commissioner Neelie Kroes claimed that 'Intel has harmed millions of European consumers by deliberately acting to keep competitors out of the market for computer chips for many years. Such a serious and sustained violation of the EU's antitrust rules cannot be tolerated.'

The state of New York has indicated its displeasure with such a lightweight punishment for Intel, especially given the prior weight of the EU's fine, but has declared that it won't be contesting the ruling.
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