New York by Cuomo v. Intel Corporation, No. 09-827(JJF) (D. Del. Nov. 4, 2009)
State of New York filed a federal antitrust suit against Intel Corporation charging that Intel engaged in a worldwide, systematic campaign of illegal conduct – revealed in e-mails – in order to maintain its monopoly power and prices in the market for microprocessors. The complaint alleged that over the last several years, Intel has extracted exclusive agreements from large computer makers in which they agreed to use Intel’s microprocessors in exchange for payments totaling billions of dollars. Intel also threatened to and did in fact punish computer makers that they perceived to be working too closely with Intel’s competitors. Retaliatory threats included cutting off payments the computer maker was receiving from Intel, directly funding a computer maker’s competitors, and ending joint development ventures. According to the complaint, to obtain exclusive agreements, Intel paid hundreds of millions of dollars annually in so-called “rebatesâ€ to individual computer makers. These rebates were actually just payoffs with no legitimate business purpose that Intel invented to disguise their anticompetitive nature. Sometimes, the payments from Intel exceeded a company’s reported quarterly net income. Intel’s pressure on computer makers to guarantee it specified market shares of their sales prevented computer makers from responding to consumer demand. The state sought to bar further anticompetitive acts by Intel, restore lost competition, recover monetary damages suffered by New York governmental entities and consumers, and collect penalties. Intel’s various motions to dismiss were granted, greatly reducing the scope of the state’s case. The parties settled in 2012. New York dismissed the action with prejudice and agreed to terminate its investigation. Intel did not admit wrongdoing and did not change its business practices, but agreed to pay $6.7 million in costs.