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To: Elmer who wrote (57591)	6/8/1998 11:41:00 PM
From: NickSE	Respond to of 186894

FTC: Intel Wields Monopoly Club Against Companies crn.com For Personal Use Only By Darryl K. Taft & Edward F. Moltzen Washington DC 6:41 PM EDT Mon., June 08, 1998 .............. The Federal Trade Commission voted 3 to 1 to file a lawsuit against Intel Corp. today charging that the chip maker used its monopoly power to "cement" its dominance over the microprocessor market. At a news conference this afternoon, the FTC alleged that Intel illegally used its market power when it denied three of its customers, Compaq Computer Corp., Digital Equipment Corp., and Intergraph Corp., continuing access to technical information necessary to build Intel based computers. Furthermore, the FTC charged that Intel took further steps to "punish" those companies for refusing to license key patents on Intel's terms. "There was a very deliberate effort [by Intel] to send a very public signal: Don't mess with us," said William Baer, director of the FTC's Bureau of Competition. The three companies cited develop computer systems and hold patents on microprocessor and related technologies. When they sought to enforce those patents in the industry, both against Intel and other companies that rely on Intel products, the FTC alleges, that Intel retaliated by cutting off technical information to the companies and threatening to cut off the supply of microprocessors. Under the law, Baer said, "a company is presumed to be a monopolist once it reaches seventy percent of the market. Intel is around eighty percent," and has about 90 percent of the PC market, he said. "Intel is a monopoly under the law, and under antitrust laws monopolists can compete by producing better products," he said. "But it is illegal under antitrust laws for a monopolist to block others from the industry." Baer said that once the government has filed its case, the next step is up to an administrative law judge to schedule a hearing . "We'll ask for a hearing some time this fall," he said. Baer said the case should take no longer than one year to be resolved. Baer said in a case such as this a monopolist holds a major advantage over less successful competitors. "The monopolist has a club in this kind of dispute. It's actually a nuclear bomb," he said. In its complaint, the FTC said that Intel in its dispute with Digital Equipment: "Demanded return of technical information and refused to supply any additional technical information needed by Digital to design computer systems products incorporating Intel's newest microprocessors," even though the information was available to other computer makers. The complaint also said Intel demanded the "return of microprocessor prototypes and refused to supply additional prototypes, even though such prototypes were available to similarly situated computer manufacturers that buy microprocessors from Intel." Further, the complaint alleges that Intel "acted to created uncertainty about Digital's future source of supply of Intel microprocessors, including the orchestration of a scene in which a Digital employee was publicly ejected from a widely attended industry meeting sponsored by Intel without any advance warning." Baer said the FTC's complaint is not an effort to attack Intel's success or to deconstruct the Pentium or anything like that. "The lesson is that if you allow a monopoly like Intel to go on and do this, there won't be a lot of competition left." Baer also said that Intel officials were in to visit the FTC last week. "When Intel was here last week, one of its executives said all we did was put in a few speed bumps" for the competition. However, Baer said that when things move as fast as they do on today's information superhighway, a speed bump can be significant.

To: Elmer who wrote (57591)	6/8/1998 11:48:00 PM
From: Dale J.	Read Replies (1) \| Respond to of 186894

re:<<Most strange.>> What is even more strange is now digital is distancing itself from the FTC suite. See PC Week below. The FTC and our courts in general are not well suited to resolving arcane technical disputes in the fast moving computer industry. Court fights drag on for years, and by the time it works its way through the courts the issue has usually been resolved or is moot. PC Week: ... In contrast, Digital's response to being named in the FTC's lawsuit, and the nature of its response, indicated a desire to distance itself from the lawsuit. Digital and Intel settled when Digital, of Maynard, Mass., sold its semiconductor business to Intel, a deal that was approved by the FTC in April. A corporate spokesman said today he personally was not aware that Digital would be named by the FTC. The company later released the following statement: "During Digital's patent infringement dispute with Intel Corp., the companies did disagree over access to technical material concerning Intel's Pentium processors. Digital and Intel have resolved these outstanding issues as part of the patent suit settlement. Digital has been subpoenaed by the Federal Trade Commission for information about its relationship with Intel and has provided the FTC material in response to the subpoena.''