New FTC Chief Opens Formal Antitrust Probe into Intel Pricing

Computer chip maker Intel Corp. is facing a formal antitrust investigation of anti-competitive pricing by the Federal Trade Commission.

The company issued a statement saying it received an FTC subpoena on Wednesday, but its practices “are well within U.S. law," the New York Times reports. Government officials and lawyers involved in the investigation told the Times that subpoenas had also been issued to Intel rival Advanced Micro Devices and several computer makers that buy semiconductors from the two companies.

Advanced Micro Devices has long sought an antitrust probe into Intel’s pricing rebate practices, the Wall Street Journal reports (sub. req.). Advanced Micro Devices claims Intel’s rebates and discounts in the microprocessor market sometimes result in products being sold below cost.

The Times says the FTC’s new chairman, William Kovacic, authorized the probe, reversing a decision by his predecessor Deborah Majoras. The move comes after South Korea said it would fine Intel more than $25 million for violations of fair trade laws.