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New York State Attorney General Andrew Cuomo filed a federal antitrust lawsuit against Intel Wednesday charging it with engaging in a "worldwide, systematic campaign of illegal conduct - revealed in e-mails - to maintain its monopoly power and prices on its microprocessors."

The colorful suit accuses Intel of using "bribery and coercion to maintain a stranglehold on the market."

Cuomo's motives are suspect because AMD and its alter ego Globalfoundaries are building a massive state-of-the-art fab in upstate New York that will employ hundreds of people. He also has gubernatorial aspirations and would like to follow in his father's footsteps as governor of New York.

Cuomo, however, reportedly failed to get backing from any other states attorneys general though not for want of trying. Recall that a clutch of them joined the Justice Department's antitrust suit against Microsoft.

But there's also speculation that his suit could stiffen the Federal Trade Commission's resolve in its ongoing investigation of Intel.

The Cuomo suit, filed in district court in Delaware where AMD lodged its private antitrust suit against the company, mirrors the charges made in the AMD suit and in the AMD-inspired European Commission's recent antitrust finding that cost Intel $1.4 billion, the largest fine ever levied by the EC.

It's unclear whether the Cuomo suit and the AMD suit will be combined. AMD's action was filed in June of 2005 and resulted in a reportedly record exchange of 200 million pages of documents, 2,200 hours of depositions and tens of thousands of pages of expert testimony. The trial is currently scheduled to start March 29 with pre-trial hearings set for mid-December and again in mid-February.

If the Cuomo suit doesn't upset that apple cart and New York has to go to the back of the line and Intel prevails, the AG's grandstanding could backfire.

Intel, which is appealing the EC's decision, says it's going to fight the suit.

The 84-page Cuomo complaint claims that Intel paid OEMs billion of dollars in the form of "so-called rebates" - what New York sees as thinly veiled "payoffs with no legitimate business purpose that Intel invented to disguise their anticompetitive nature" - in exchange for exclusive agreements with the computer makers that locked AMD out.

Cuomo's 23-month investigation ran into the same problem the EC had: there's no written evidence of such doings in Intel's contract so his suit claims that Intel "attempted to erase the most obvious traces of its anticompetitive scheme by eliminating crucial but flagrantly objectionable provisions from written agreements or by camouflaging language about illegal guaranteed market shares with terms like ‘volume targets.'"

For evidence he uses an e-mail from an Intel negotiator in September 2006 reading, "Could you just take the mss [market share] references off and just leave everything at volume targets. Our counsel is very picky on that stuff and I don't want to infer we had conversations about anything other than volume targets or relative volume targets . . . thx."

Another e-mail from an Intel executive in 2006 reads, "Let's talk more on the phone as it's so difficult for me to write or explain without considering antitrust issue."

The suit also accuses Intel of threatening and punishing OEMs perceived to be working too closely with AMD. It says "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."

An internal HP e-mail reads, "Intel has told us that HP's announcement on Opteron has cost them several $B and they plan to ‘punish' HP for doing this."

Another reads, "If you do and we get caught (and we will) the Intel moneys (each month is gone (they would terminate the deal). The risk is too high. Without the money we do not make it financially."

The suit says the payments for exclusivity could make the difference between profit and loss for a computer maker or a segment of its business. And sometimes the payments exceeded a company's reported quarterly net income as it says happened with Dell in 2006 when Intel's rebate payments exceeded Dell's reported net income in two quarters that year.

Dell got ~$2 billion back from Intel in 2006. In exchange, Cuomo claims, Dell agreed not to market any products from AMD and "Intel and Dell collaborated to market microprocessors and servers at prices below cost in order to deprive AMD of strategically important competitive successes."

In February 2004 when Dell was thinking of ending its exclusive relationship with Intel, one of Dell's folks wrote an e-mail saying, "PSO/CRB [Intel CEO Paul Ottelini and Intel Chairman Craig Barrett] are prepared for jihad if Dell joins the AMD exodus. We [will] get ZERO [rebates] for at least one quarter while Intel ‘investigates the details' - there's no legal/moral/threatening means for us to apply and avoid this."

And an e-mail from Dell CEO Michael Dell to Intel CEO Paul Otellini in November 2005, reads, "We have lost the performance leadership and it's seriously impacting our business in several areas."

To which Otellini replied, "There is nothing new here. Our product roadmap is what it is. It is improving rapidly daily. It will deliver increasingly leadership products... Additionally, we are transferring over $1B per year to Dell for meet comp efforts. This was judged by your team to be more than sufficient to compensate for the competitive issues."

Intel supposedly threatened to derail the development of an HP server if HP promoted products from AMD and paid HP hundreds of millions of dollars in rebates in return for HP's agreement to cap its sales of AMD-based widgets at 5% of its business desktop PCs. Under a broader 2006 agreement Intel allegedly paid HP $925 million to increase its shares of HP's sales at AMD's expense.

Intel also allegedly paid IBM $130 million not to launch an AMD-based server, threatened to pull funding for joint projects if IBM marketed AMD-based servers and pressured IBM to launch another AMD-based server only on an "unbranded" basis.

According to an e-mail, an IBM executive wrote, "I understand the point about the accounts wanting a full AMD portfolio. The question is can we afford to accept the wrath of Intel...?"

Intel has previously maintained that such e-mail in out of context and speculation, often written by people who were not in the procurement loop.

The suit claims average consumers were robbed of better products and lower prices, a hard claim to prove considering how chip prices have fallen over the years. It also claims Intel harmed innovation, which it describes as "critical to productivity growth throughout the economy."

It's looking for monetary damages suffered by New York governmental entities and consumers and penalties.