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SAN JOSE, CALIF.–Intel Corp. and its much smaller rival Advanced Micro Devices Inc. have been subpoenaed by the Federal Trade Commission about possible anticompetitive behaviour in the microprocessor market, the companies said yesterday.

The move by the FTC to escalate its probe to a formal investigation is the latest in a series of legal challenges facing Intel, the world’s largest computer chip maker.

Antitrust investigations of Intel have been launched in several countries, including the U.S., based on complaints by AMD, also based in California, of unfair business practices that it claims have stunted its growth.

Santa Clara-based Intel, which is facing antitrust charges in the European Union and was fined $25.4 million (U.S.) this week by South Korea’s antitrust regulator, said yesterday that the FTC investigation was considered "informal" until the subpoena for records was served this week.

AMD claims Intel has maintained its dominance in microprocessors – the electronic brains of personal computers – by illegally threatening computer manufacturers with higher prices if they do not stick exclusively with Intel chips.

Intel commands about 80 per cent of the worldwide market for microprocessors. AMD has roughly 20 per cent and claims it has been crippled by Intel’s sales tactics.

Also, lengthy delays in production of new chips have hurt AMD’s competitiveness the past two years, blunting some of the momentum generated with AMD’s 2003 push into the lucrative server market, where it stole substantial market share from Intel.

Intel said it has been co-operating with the FTC probe payday loans in one hour. The company has maintained its business practices are fully legal, despite AMD’s intensifying legal challenges over the past several years.

By opening a formal probe, the FTC can secure not only the records Intel has promised to provide but records from computer manufacturers and other Intel customers who have been involved in the disputed transactions, Intel said.

"The company believes its business practices are well within U.S. law," an Intel statement said. "The evidence that this industry is fiercely competitive and working is compelling.”

Also yesterday, Sunnyvale-based AMD acknowledged receipt of an FTC subpoena in the investigation.

AMD said the probe helps it hold Intel accountable for sales strategies that it argues have hurt AMD’s business and technology consumers.

"Intel must now answer to the Federal Trade Commission, which is the appropriate way to determine the impact of Intel practices on U.S. consumers and technology businesses," Tom McCoy, AMD executive vice-president and chief administrative officer, said in a statement. "In every country around the world where Intel’s business practices have been investigated, including the decision by South Korea this week, antitrust regulators have taken action.”

Intel shares closed in New York down 97 cents to $22.90, as more than 66 million shares traded. AMD shares finished the day, down 35 cents to $7.43, with more than 29 million shares changing hands.

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