does this mean we still get a chance to buy intel at much lower price? FTC
FTC finds fault in Intel-DEC settlement
BY JUBE SHIVER JR.
Los Angeles Times
WASHINGTON -- Sharpening its antitrust investigation of Intel
Corp., the Federal Trade Commission staff has found serious
antitrust problems with the computer chip maker's $700 million
settlement of a patent infringement suit brought by rival Digital
Equipment Corp., according to people close to the probe.
The FTC staff, which believes the settlement last October would
limit competition to Intel's market-leading Pentium chip, is now
building a case against the commission approving the deal. In
addition, the FTC staff is mulling whether to restrict Intel's efforts
to extend its dominance of microprocessors to other computer
components, the sources said.
The 6-month-old FTC investigation of Intel is not expected to be
completed until later this year. And the preliminary staff proposal
could ultimately be rejected by an FTC commission that in the early
1990s declined to pursue a staff recommendation to impose
antitrust sanctions on software giant Microsoft Corp.
The deepening investigation of Intel is a surprising turn of events.
Most antitrust experts had expected the probe to reach a dead-end,
since they believe Intel faces more competition in the computer
chip-making business today than in 1993, when the FTC ended a
two-year probe of Intel's business practices without taking any
action.
Intel spokesman Chuck Mulloy said his company has no specific
knowledge about the course of the FTC's investigation, but remains
optimistic that the settlement will be approved.
''We are confident that after a review by the FTC, we will receive a
clean bill of health,'' Mulloy said.
Gail Smart, a spokeswoman for Digital, said her company has been
contacted by the FTC and is cooperating with the agency's
investigation, but she would not otherwise comment on the probe.
Asked about the Intel investigation, FTC spokeswoman Victoria
Streitfeld said, ''That's not something anyone here can talk about.
''We make decisions when we announce them.''
Digital filed its patent lawsuit against Intel last spring, accusing
Intel of stealing Digital's technology for use in Intel's Pentium brand
of microprocessors. The settlement provides that Digital will receive
licensing fees and discounts on Intel products. It was structured
with the intention of not increasing Intel's estimated 80 percent
control of the microprocessor market.
It was not clear Wednesday what portions of the settlement have
raised the FTC staff's concerns.
According to people familiar with the investigation, the FTC staff
believes Intel's agreement to buy Digital Equipment's chip
production operations for $700 million is anti-competitive.
Under the settlement, Intel has agreed to manufacture Digital's
super-fast Alpha chip under license at that facility for seven years,
after which it has the option to use it to make exclusively Intel
processors. However, if Digital wanted to continue using the Alpha
after that time, it could lease manufacturing capacity from another
chip firm.
The FTC is also reviewing Intel's proposed purchase of Chips &
Technologies Inc., of San Jose, a semiconductor firm that has a
strong position in the market for graphics chips for portable
computers. Critics have raised concern that Intel will use that deal
to become dominant in graphics chips, a market segment where it is
not now a significant player.
The FTC has told Intel that its review of the C&T purchase, which
has taken much longer than expected, will be completed next week. |
