FTC launches antitrust probe of Intel

By Diane Bartz and Duncan Martell

WASHINGTON/SAN FRANCISCO (Reuters) - The world's leading semiconductor maker Intel Corp faces a formal investigation by the U.S. Federal Trade Commission after fighting similar antitrust probes in Europe and Asia, the company said on Friday.

Smaller rival Advanced Micro Devices Inc has long accused Intel of abusing its dominance of the $280 billion chip market; it filed suit against Intel in 2005. Intel's microprocessors -- the electronic brains of personal computers -- power more than 80 percent of the world's PCs.

The FTC had been unwilling to go beyond an informal investigation of Intel under its former chairman, Deborah Platt Majoras. She left the agency two months ago and was replaced by another Republican, William Kovacic.

An FTC spokeswoman confirmed that the case has been upgraded to a formal probe but declined to detail the agency's concerns about Intel.

Intel General Counsel Bruce Sewell said the company already has given the FTC hundreds of thousands of documents in the agency's two-year-old informal probe and will continue to cooperate.

"We don't believe that there's been abusive behavior or illegal behavior," he told Reuters in a telephone interview. "The record here is so strong in our favor."

The FTC investigation is a second blow this week for Intel, stock of which was down 76 cents or 3.2 percent at $23.11 in afternoon trading on the Nasdaq. On Thursday, the Korea Fair Trade Commission in Seoul ruled that Intel had abused its dominant position in the local market and imposed a fine of $25.6 million. Intel said it would almost certainly appeal.

One analyst said neither consumers nor personal computer makers were harmed by Intel's dominance in the chip market.