February 2, 2007 9:00 pm

Lawsuit against Dell alleges Intel kickbacks

Intel, the world’s biggest chipmaker, on Friday denied allegations that it provided secret kickbacks to Dell in order to ensure it remained the computer maker’s sole microprocessor supplier.

The allegations, contained in a lawsuit filed against Dell on Wednesday on behalf of two shareholders, add to the troubles facing Dell.

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The company this week said Michael Dell had re-assumed control following the resignation of Kevin Rollins as chief executive after several quarters of falling margins and slumping sales.

The lawsuit accused Dell of “failing to make required disclosures” about the impact of hundreds of millions of dollars of rebates the company is alleged to have received from the chipmaker. It accused Intel of trying to keep “exclusivity” rebates paid to Dell and other customers secret in order to avoid antitrust claims.

Dell declined to comment but Chuck Mulloy, Intel spokesman, said on Friday that some aspects of the allegations contained in the complaint filed by lawyers at Lerach Coughlin, a prominent shareholder law outfit, appeared to have been “completely made up”.

“We deny the plaintiff’s allegations and we plan to move quickly to defend ourselves,” he said.

Intel was for years the sole supplier of microprocessors that powered Dell computers. Last year Dell ended years of speculation by announcing that it would begin to offer some models with microprocessors from Advanced Micro Devices, an Intel rival.

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