FTC official questions proposed Intel settlement

The US Federal Trade Commission's proposed antitrust settlement with Intel will be difficult to enforce and will not benefit the public substantially or improve industry competition, according to an FTC commissioner. Commissioner Orson Swindle, who abstained for medical reasons when the commission voted 3-0 to approve the proposed consent agreement, filed his opinion with the agency last week.

The US Federal Trade Commission's proposed antitrust settlement with Intel will be difficult to enforce and will not benefit the public substantially or improve industry competition, an FTC commissioner says.

Commissioner Orson Swindle, who abstained for medical reasons when the commission voted 3-0 to approve the proposed consent agreement, filed his opinion with the agency last week. Meanwhile, the three other commissioners reaffirmed their support for the agreement in a separate statement, saying the plan would stop anticompetitive practices without hindering Intel's business activity.

On March 17 the FTC announced the proposed settlement, under which Intel agreed to stop holding back technical product information from customers with whom it had intellectual property disputes. The FTC alleged in its complaint that Intel harmed competition by pressuring three companies -- Compaq Computer Corp., Intergraph Corp., and Digital Equipment (now owned by Compaq) -- into microprocessor patent licensing agreements that were favorable to Intel.

Swindle said in his written comments that he could not see the public harm in Intel's withholding of "assistance" from customers with whom it was having licensing disputes.

"In the absence of clear evidence of how Intel's dealings with Digital, Intergraph and Compaq could have adversely affected consumers, one can question the very basis for issuing this complaint -- and for injecting a government agency into the dynamic workings of a fast-moving, high technology industry," Swindle said.

In addition, the proposed agreement, which allows Intel to withhold information in certain circumstances that do not involve intellectual property rights, will be hard to enforce, Swindle said. "The key terms of the order seem destined to enmesh the Commission in expensive, and perhaps intractable, enforcement proceedings if Intel is ever suspected of violating it," he said.

The other commissioners -- Chairman Robert Pitofsky, and members Sheila Anthony and Mozelle Thompson -- countered that the agreement will allow the flow of technical information about new microprocessor products that is essential to Intel's customers.

"We remain of the view that (the FTC) and Intel have done a commendable job of crafting a remedy that addresses serious competitive harm without significantly hindering Intel's legitimate business activity," they wrote.

The public comment period about the proposed agreement ends May 24, after which the commission will decide whether to modify the agreement or issue a final order approving it, an FTC spokeswoman said.

Intel, in Santa Clara, California, can be reached at +1-408-987-8080, or at http://www.intel.com/. The FTC in Washington, D.C., can be reached at +1-202-382-4357, or at http://www.ftc.gov/.

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