Just as Microsoft and the US Justice Department are digging in for their showdown in September, the Federal Trade Commission is poised to unveil its own antitrust case against Intel, the world's largest chip maker.

Should the five commissioners at the FTC accept their staff's recommendations to pursue Intel in the absence of a settlement, it would mean that the two pillars of the US personal computer industry would come under government attack for allegedly abusing their monopoly power.

Microsoft controls 90 per cent of the market for PC operating systems. Intel supplies 90 per cent of the microprocessors that power PCs in a duopoly dubbed Wintel.

Antitrust jurisdiction in the US falls under both the FTC and the Justice Department. The agencies must decide between themselves which one reviews which merger, a process that has resulted in squabbling over who gets the headline-making deals. Now that work abounds for antitrust lawyers at both agencies, turf fights are no longer an issue.

In the latest high-profile cases, Justice has its hands full with Microsoft, so it became a natural division of labour for the FTC to grapple with Intel.

The proposed FTC lawsuit accuses Intel of illegally retaliating against four companies, including Digital Equipment Corporation, a computer maker, and Intergraph, a maker of powerful workstations used by designers and engineers, after the two companies became embroiled with Intel over patent lawsuits last year.

Specifically, Intel is accused of holding back advanced product information and samples of new microprocessors from the two companies. Intel normally shares such information and samples to allow companies to design new systems in advance of the release of the new chips.

According to an FTC lawyer, withholding that data "is a nuclear weapon for a monopolist". The commission may file even more charges against Intel later in the year, accusing the company of using predatory pricing and contract provisions to squeeze its few competitors in the market - the same kind of complaints made against Microsoft.

Like Microsoft, Intel is greatly feared by competitors for leveraging its monopoly in one area to gain advantage in new markets. Intel plans to enter the graphics chip market with a chip being designed with the help of Lockheed Martin that takes advantage of Intel's initiatives in adding multimedia features to its chips.

Competitors in this field worry that they will see a replay of Intel's 1995 market grab of chip sets, which control the flow of data from the microprocessor to other peripheral components within a personal computer.

At the time, rivals in chip sets, such as Cirrus Logic, complained they no longer had access to key data about coming microprocessors and, therefore, could not design their chip sets as fast as Intel could. In just a few years Intel went on from zero to control 69 per cent of the chip sets market.

The distraction of an antitrust lawsuit is the last thing Intel needs. Profit margins are eroding as the company is forced to reduce the price of its chips for computers costing less than $1,000, demand for PCs is falling as a result of Asia's economic turmoil and competitors are releasing chips that are faster and cheaper than Intel's Pentiums.

All this at a time when Mr AndyGrove has stepped aside as chief executive to make way for Mr Craig Barrett, formerly Intel's president. In May Intel's share price hovered around $70, well off its 52-week high of $102.

Ironically, an antitrust lawsuit would come at a time when Intel is looking more vulnerable than it has for years. An investor who put $10,000 in Intel in January 1992 would have seen that stake balloon to $90,000 today. As problems accumulate for the world's largest chip maker, Intel will have a tough time repeating that kind of spectacular gain over the next six years.