Investors are suing Dell Inc., alleging the computer maker used "secret and likely illegal" kickbacks from chip maker Intel Corp. to mislead investors about how much it cost to make computers, the Wall Street Journal reported Friday.

The lawsuit accuses Dell of having received roughly $1 billion a year from Intel in a type of payment known as "exception to corporate average pricing," the newspaper reported. This means Intel paid Dell for not using other companies' chips.

The suit alleges that Dell failed to properly disclose the payments, and used the money to reduce expenses for costs of goods sold.

The suit, filed in Texas, seeks class-action status for investors who bought Dell shares between February of 2003 and September of 2006.

Former CEO of Dell, Kevin Rollins, who recently resigned, had been widely criticized by shareholders as Dell lost market share to its competition and posted earnings below analysts' expectations. The company has also been the subject of an ongoing federal accounting probe and dealt with a voluntary recall of 4.2 million faulty laptop batteries made by Sony.