UPDATE 4-U.S. FTC launches antitrust probe of Intel

(Adds comment from former FTC staffer)

By Diane Bartz and Duncan Martell

WASHINGTON/SAN FRANCISCO, June 6 (Reuters) - Semiconductor giant Intel Corp (INTC.O: Quote, Profile, Research) faces a formal investigation by the U.S. Federal Trade Commission after fighting similar antitrust probes in Europe and Asia, the company said on Friday.

Smaller rival Advanced Micro Devices Inc (AMD.N: Quote, Profile, Research) has long accused Intel of abusing its dominance of the $280 billion chip market and filed its own lawsuit against Intel in 2005. Intel's microprocessors -- the electronic brains of personal computers -- power more than 80 percent of the world's PCs.

An FTC spokeswoman confirmed the case was upgraded to a formal probe, but declined to say more.

Intel General Counsel Bruce Sewell said the company already gave the FTC hundreds of thousands of documents in the agency's two-year-old informal probe and would continue to cooperate.

"We don't believe that there's been abusive behavior or illegal behavior," he told Reuters in a telephone interview. "The record here is so strong in our favor."

The FTC investigation is a second blow this week for Intel, whose stock was down 3.35 percent at $23.07 in afternoon trading on the Nasdaq. On Thursday, the Korea Fair Trade Commission in Seoul ruled Intel abused its dominant position in the local market and imposed a fine of $25.6 million. Intel said it would almost certainly appeal.

A former FTC staffer said the resignation of chairman Deborah Platt Majoras in March set the stage for the tougher probe and more aggressive litigation at the agency overall.