The world’s largest computer-chip maker and Growth Portfolio holding, Intel (INTC) is once again making headlines thanks to its market dominance. Fresh off the latest agreement with the European Union to pay almost $1.5 billion to Advanced Micro Devices to settle a four-year dispute, Intel is once again facing anti-competitive charges. Now the U.S. Federal Trade Commission has joined party, alleging that the company has illegally used its dominant market position to suppress competition and strengthen its monopoly.
To be fair, the company is utterly dominant. Intel commands more than 80 percent of the world’s market for computer chips, completely dwarfing its competition. We don’t condone unfair practices that limit competition, but given its market share, we’re not surprised by the investigations facing the company. Neither is the company, who tried to settle with the FTC before the agency filed its complaint.
In terms of implications arising from the complaint, the most likely scenario is that the company pays hefty fines – like it has in the past to settle similar claims.
Read more...
