Did Intel (INTC) Intimidate IBM (IBM) And HP (HPQ)?

The FTC has brought a case against Intel (NASDAQ:INTC) which has now been accused of monopolistic behavior in Europe, the State of New York, and the United States.

The FTC claims that Intel used its dominant market share to make it impossible for competition to make inroads in the PC and server businesses. Intel only has one real competitor, AMD (NYSE:AMD), which nearly went out of business two years ago. AMD’s stock is higher today

The one part of the FTC’s complaints that seems completely implausible is that it says Intel repeated used “threats and rewards” to keep IBM (NYSE:IBM), Hewlett-Packard (NYSE:HPQ), and Dell (NASDAQ:DELL) from using processors from other companies

The three technology companies that were supposed to have been the targets of Intel’s threats are all as large or larger than Intel. Each has armies of lawyers. It would certainly been common knowledge among senior management at IBM, HP, and Dell that Intel was using unfair tactics to keep their business. And, yet, these managers and their attorneys would have to have let this systematic behavior go on for years.

That does not seem likely.

Douglas A. McIntyre