UPDATE 1-US FTC staff not held back on Intel-commissioner

(Recasts; adds FTC, Intel comment; changes dateline, previous New York)

WASHINGTON, Oct 22 (Reuters) - The Federal Trade Commission staff is not being prevented from conducting a formal antitrust investigation into top chipmaker Intel Corp INTC.O, an agency commissioner said on Monday.

FTC Chairman Deborah Majoras, a Republican, has rejected requests by lawmakers, other commissioners and Advanced Micro Devices Inc AMD.N to open a formal antitrust investigation into its much larger rival Intel, the New York Times reported on Monday.

Intel, the world’s biggest maker of computer chips, has been accused of anti-competitive behavior for allegedly offering large discounts to computer makers in exchange for their not using products from AMD, the newspaper said.

Regulators in Europe and South Korea have been investigating Intel’s marketing practices.

The FTC has been conducting an informal review of Intel for more than a year.

But Majoras has refused requests to elevate the inquiry to a formal investigation, which would give staff lawyers the authority to issue subpoenas and compel testimony, the Times said, citing unnamed government officials and lawyers involved in the matter.

FTC Commissioner J. Thomas Rosch, also a Republican, denied that the commission’s staff was being held back from making the probe a formal investigation.

“I have been told by the staff that they are conducting the investigation the way it is being conducted because they believe they are getting better information from conducting it that way than they would get if they used a compulsory process,” Rosch told Reuters.

When FTC staff lawyers conclude their investigation, they will send recommendations to the five FTC commissioners to either prosecute or drop the matter, he said.

“At that juncture, the commission will decide what course to take, and that is a decision that will be made by a majority of the commissioners, not by the chairman alone,” Rosch said.

In Brussels, Intel has been granted until Jan. 4 to respond to antitrust charges leveled by the European Commission. In July, the EC charged Intel with slashing prices below cost and offering huge rebates in an illegal attempt to drive smaller competitor Advanced Micro Devices out of the market.

Last month, South Korean regulators sent a “statement of objections” to Intel but would not release its conclusions until Intel responded.

Intel spokesman Chuck Molloy said that “for many, many years we have had regular contact with the FTC” and characterized the talks as a “fairly open dialogue.”

“It is a competitive market and we think it’s working just fine for the benefit of consumers. Prices are falling,” Molloy told Reuters. (Additional reporting by David Lawsky and Dane Hamilton)