Intel, Microsoft legal paths diverge

Intel effectively removed itself from federal government and public scrutiny lastweek, but the chip maker's Wintel partner, Microsoft, remains mired in the legal muck. With its antitrust case recessed until April 12, Microsoft has begun working on an appeal in anticipation of losing its historic case.

Intel effectively removed itself from federal government and public scrutiny lastweek, but the chip maker's Wintel partner, Microsoft, remains mired in the legal muck.

With its antitrust case recessed until April 12, Microsoft has begun working on an appeal in anticipation of losing its historic case, a source familiar with the case said this week. The software giant also downplayed reports that it is actively seeking to negotiate a settlement with the US Department of Justice.

Meanwhile, Intel and the Federal Trade Commission quietly reached an agreement -- and avoided a trial -- to resolve their case, in which the FTC accused Intel of coercing companies into sharing patents by denying them access to future microprocessors.

"It is easier for Intel to avoid its lawsuit than for Microsoft to get out of its case," said William Kovacic, a law professor at George Washington University, in Washington, and a former FTC attorney.

"The government's expectations in the Microsoft case involve far more fundamental changes than the FTC's desired change in Intel," Kovacic said. "The FTC wanted relatively less drastic adjustments in Intel's behavior than [the Department of] Justice is looking for in Microsoft's. That makes the Microsoft case far more difficult to settle."

Microsoft Chief Operating Officer Bob Herbold said the two cases were not comparable, pointing out that the Intel situation was a licensing dispute that more closely mirrored Microsoft's fight with the Justice Department a few years ago, which led to a consent decree agreed upon by the two sides in 1995.

In an internal Microsoft memo, dated March 3, general counsel Dave Heiner portrayed the company as a victim of the Justice Department, its industry competitors, and the media. Heiner said that a rash of embarrassing gaffes have marred Microsoft's defense, but the company has still made its case.

"Most news accounts don't undertake the somewhat difficult task of assessing the significance of the evidence presented each day against the legal standards on which the case will be decided," Heiner wrote.

Although terms of the Intel deal were kept confidential pending approval, observers said it is likely that Intel agreed to mild restrictions.

"The one thing [Intel] said was that they're happy with the settlement, so I would assume that the costs are fairly low," said Linley Gwennap, a senior analyst at Micro Design Resources, in Sebastopol, Calif.

Rebecca Sykes, a Boston correspondent for the IDG News Service, an InfoWorld affiliate, contributed to this article.

A tale of two trials

Microsoft's ongoing trial with the Department of Justice has provided more fireworks than Intel's quick-fix settlement with the Federal Trade Commission.

Intel vs. the Federal Trade Commission

September 1997 FTC embarks on broad investigation

June 1998 FTC lodges antitrust complaint

March 1999 Intel, FTC settle antitrust case

Microsoft vs. the Department of Justice

September 1996 Department of Justice opens investigation

December 1997 Judge Thomas Penfield Jackson issues preliminary injunction

May 1998 DOJ and 20 state attorneys general file antitrust suits

July 1998 Microsoft calls Justice claims "completely groundless"

October 1998 Trial opens; observers blast Microsoft's defense tactics

February 1999 Trial recessed until April 12

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