The opening of formal opening of formal antitrust investigations by the US Federal Trade Commission into accusations that Intel, the world's largest computer chip maker, has designed its pricing policy to maintain its near-monopoly in the microprocessor market, comes as Advanced Micro Devices (AMD), which has been fighting a bigger pie of the $225 billion global market for computer chips, ran a steady campaign against Intel's alleged pricing practices that violate antitrust laws. (See: Federal Trade Commission orders antitrust inquiry into Intel's business practices)

''In every country around the world where Intel's business practices have been investigated, including the decision by South Korea, the company has been found to be violating fair trade laws,'' Thomas M McCoy, AMD's executive vice president for legal affairs and chief administrative officer, said in a statement.

''Intel must now answer to the Federal Trade Commission, which is the appropriate way to determine the impact of Intel practices on US consumers and technology businesses,'' McCoy added.

The commission has started making inquiries with Intel, its smaller rival AMD, and personal computer makers that buy semiconductors from the two companies.

The inquiry, ordered by William E Kovacic, the new chairman of the trade commission, has the support of the agency's other commissioners.

An earlier inquiry has been blocked by months of delays under previous trade commissioner Deborah P Majoras, frustrating moves by other senior commission officials and US lawmakers.

While Intel acknowledged that the trade commission has started formal investigations, the company said it was already working with the agency and that its business practices were well within US law.

''The company believes its business practices are well within US law,'' the statement said, adding, ''the evidence that this industry is fiercely competitive and working is compelling.''

The legal tussle between Intel and AMD extends back to 2005 when AMD filed an antitrust suit against Intel in June 2005 in the US District Court in Delaware. AMD alleged that Intel abused its monopoly power in the desktop CPU market to coerce PC manufacturers including Dell, Sony, Toshiba, Gateway, and Hitachi and other retail stores to boycott AMD chips and prefer Intel chips by offering them rebates. However, Intel has been refuting AMD's allegations.

In July 2006, AMD filed an antitrust suit in Germany's Federal Cartel Office against Intel after reports claimed "Media Market, a German chain of stores selling consumer electronics, had agreed to sell only "Intel Inside" computers in exchange for an undisclosed payment from the chip giant".

Again, in 2007, the European Commission issued antitrust charges against Intel for its alleged business tactics to stifle smaller rival AMD. It is expected to pronounce its decision before the end of September. According to the European Union rules, the European Commission can fine a company up to 10 per cent of its worldwide sales for violating antitrust rules. In 2004, the European Commission had slapped a fine of $800 million against Microsoft for abusing its dominant market power.

Recently, anti-trust authorities in Korea slapped a $25 million fine on Intel for violating its fair trade laws. The Korean commission found that Intel violated antitrust law when it offered $37 million in rebates to the personal computer makers, Samsung Electronics and the Trigem Company, from 2002 to 2005 in return for a pledge not to buy microprocessors from AMD.(See: Intel fined $25 million by South Korean antitrust body for violations)

FTC may now seek documents showing Intel's communications with customers involved in the disputed transactions.

Intel's market share of x86 microprocessors as of the fourth quarter of fiscal 2007 was 76.7 per cent, up from 74.4 per cent in 2006. AMD controlled 23 per cent of the market last year, compared with 25.3 per cent in 2006.

American antitrust law permits a company to hold a monopoly, but it forbids a company from leveraging its dominance to restrict competition.

The controversy started three years ago when the Japan Fair Trade Commission ordered Intel to do away with discounts that the agency said unfairly locked AMD out of the market. Intel agreed to comply with the order but it did not admit that it was in the wrong.