Jim,
RE: US Govt. vs Intel
Forgive my rant here but why in the world is our DOJ taking on first MSFT and now INTC? Ah, the heck with the rant, CSCO is next and then probably AMAT. Perhaps their time would be better spent taking on the criminals inside the Beltway than disrupting creative and successful corporations. I hope there is a new broom in Y2000 and Janet R. and her minions are swept out! Jeff
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Government Calls Intel a Monopolist
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Story Filed: Monday, March 01, 1999 07:20 PM EST
WASHINGTON (AP) -- The government portrayed Intel Corp. as an out-of-control monopolist Monday, accusing the world's largest manufacturer of computer processors of bullying other companies until they surrendered valuable secrets.
In turn, Intel rejected the Federal Trade Commission's characterization, arguing that even the government's own expert economist cannot point to any rivals harmed by its behavior, which it called ''fundamentally fair.'' It called the pending case before an FTC administrative law judge -- pitting the agency against Intel -- ''an assault on fundamental antitrust principles.''
Lawyers for both Intel and the FTC outlined their strategies Monday for the company's upcoming hearing, which starts March 9 and is expected to last six to 10 weeks. Together with the government's antitrust case in federal court against Microsoft Corp., the legal actions confront two of the most important companies in the nation's technology industry.
The FTC alleges that Intel illegally withheld from three companies advanced technical information about its upcoming microprocessors to ''extort'' valuable technology that the companies developed independently.
It called the company's actions ''a raw exercise of monopoly power to muscle competitors into signing over intellectual property rights.''
''Simply competing on the merits was insufficient,'' FTC lawyers wrote. ''... Intel's victims had no choice but to accede to its demands.''
The three companies were Digital Equipment Corp., Intergraph Corp. and Compaq Computer Corp., which now owns Digital.
Intel, with $26.2 billion in sales last year, makes processors for more than 80 percent of the world's computers and last week introduced its fastest chip ever, the Pentium III.
The FTC said ''any hope of meaningful challenge'' to Intel's dominance relies on other companies developing rival technology.
In a 71-page filing that quotes the government's own expert economist more than anyone else, Intel doesn't deny that it withheld technical data about upcoming products.
But Intel contended it is legal for the company to decide what secrets to disclose to its customers about its upcoming products, information typically contained within so-called ''color books'' -- with red covers for the most sensitive and yellow covers for less important details.
Intel lawyers accused the FTC of trying ''to prevent Intel from using its intellectual property to barter in value-for-value commercial exchanges.''
Coincidentally, the government's antitrust case comes during a period of unprecedented competition facing Intel from rival chipmakers, such as from Advanced Micro Devices Inc. and National Semiconductor Corp.
Just last week, an industry report showed consumers bought more computers in January with AMD processors than Intel -- knocking Intel from the No. 1 spot for the first time and sending its stock price plummeting more than 6 percent.
''Any reader of personal computer ads today can readily see that Intel faces intense competition,'' the company said.
Intel said the government's own economist, Harvard University professor Frederic M. Scherer, found no evidence that innovation in the computer industry has suffered. Scherer also is quoted as calling Intel's behavior ''unfair'' but agreeing that its actions haven't directly affected computer chip prices.
Instead, Scherer predicted that Intel's efforts on the industry will ''unravel over a period of 10 or so years, and it's just too early to assess those consequences.''
Intel called that ''not a basis for imposing antitrust liability.''
The company indicated previously its witnesses will include Andrew Grove, Intel's high-profile co-founder and chairman, and Craig Barrett, who took over as chief executive officer last year.
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