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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: exhon2004 who wrote (76551)	3/17/1999 3:08:00 AM
From: greenspirit	Respond to of 186894

Greg and ALL, Article...the scoop... March 17, 1999 Network World : Last week, just before going to trial, Intel and the Federal Trade Commission (FTC) settled their differences. The agreement, which has been under wraps, prevented an antitrust trial that no one seemed to relish. What was the cause of this trial? The FTC claimed Intel withheld technical information about its products from companies that refused to give Intel patented property on a royalty-free basis. Further, Intel tried to make vendors buy licenses to Intel's intellectual property, such as its microprocessors. This, the government claimed, would stifle innovation and development because these companies would be less likely to develop their own chip technologies. Digital Equipment and Compaq, at the time still separate companies, complained about Intel's policies. And Inter-graph, which claimed its business had suffered, filed suit. Reacting to the Intergraph action, the government said Intel couldn't hold back technical information just because it was being sued. But as the government's trial drew nearer, it appeared that much of the FTC's case against Intel was crumbling. The now-united Digital and Compaq conceded in pretrial testimony that Intel's hardball maneuvers had not stifled their technical innovations. Robert Palmer, former CEO of Digital, testified that research and development continued on the company's Alpha processor; one of his cohorts, in a deposition, said that Digital is "very committed" to the Alpha. Despite the FTC-Intel settlement, the FTC will continue its investigation of Intel but is dropping its focus on monopolistic practices. While Intel may have had a monopoly last summer when the FTC brought the suit, since then the company's market share has been dropping. Unlike Microsoft, which has some 90% of the PC operating system market, figures from International Data Corp. show that Intel now has 75% of the PC microprocessor market. Why settle the case? The agreement stipulates that no one from either side can comment, a silence that has led to all sorts of speculation. Some believe that the government was going to have a tough time proving its case - Intel's monopoly, if that was indeed what it was, was waning. Intel had admitted to hardball tactics, but company officials maintained that these tactics were legal. Some observers believe Intel settled to avoid negative publicity. Had the FTC proved that Intel was a monopoly, private lawsuits may have followed, much like the one filed by Intergraph, others argue. Intel and the feds seem happy with their settlement. About the only company not satisfied is Intergraph, which will continue its suit, company officials pledge. - Deni Connor

To: exhon2004 who wrote (76551)	3/17/1999 3:21:00 AM
From: Paul Engel	Read Replies (1) \| Respond to of 186894

Greg & Intel Investors - Re: "the agreement between FTC and Intel was significantly more favorable for Intel than previously reported." Here's the source: Intel looks like winner in FTC settlement Paul {========================} mercurycenter.com Posted at 12:07 a.m. PST Wednesday, March 17, 1999 Intel looks like winner in FTC settlement BY TOM QUINLAN Mercury News Staff Writer The agreement that settled the Federal Trade Commission's antitrust charges against Intel Corp. last week was presented as a compromise in which both sides won key concessions. But when the details of the agreement are announced today, Intel may well appear the bigger winner. According to sources familiar with the details of the agreement, Intel agreed to a consent order saying it will no longer withdraw its technical information and support from companies that challenge it in court, unless those companies withhold payment or have asked the courts for a restraining order that would prevent Intel from manufacturing or selling its processors. The settlement largely meets the stated objectives of both parties. The FTC can claim victory in that Intel can no longer arbitrarily withdraw technical information about its products in the case of a lawsuit, and Intel still has the ability to protect its intellectual property. But it ignores far more significant issues raised in the FTC's initial complaint, people familiar with the deal said Tuesday. Chief among those was whether Santa Clara-based Intel, the world's leading semiconductor-maker, is a monopolist, and if so, whether it used its dominant position illegally to thwart competition, ultimately harming consumers. The announcement could be delayed beyond today, some observers noted, but the four active commissioners that oversee the FTC have signed off on the deal, the Associated Press said Tuesday. Similar proposal According to sources familiar with the negotiations, it largely follows a proposal that Intel floated as a trial balloon last summer, soon after the FTC filed the complaint. Although no formal settlement was offered at the time, Intel executives made it clear to the FTC that as long as litigants didn't threaten Intel's ability to manufacture and sell its products, it wouldn't withdraw the technical information, sources said. At the time, however, the FTC didn't appear interested in that proposal, those sources added. However, the two sides reached a tentative agreement March 7, after each had filed briefs outlining their legal strategies and only two days before the hearing was to get under way. The commission had accused Intel of bullying some of its customers -- citing suits filed against Intel by Compaq Computer Corp., Digital Equipment Corp. and Intergraph Computer Corp. -- into handing over their own trade secrets. After being sued by those companies, Intel withheld, or threatened to take back, technical information those companies needed to design their products. (Compaq and Digital -- now a Compaq subsidiary -- settled their disputes with Intel out of court. Intergraph's suit -- which charges Intel with a wider array of offenses including patent infringement and breach of contract -- is ongoing.) The government had alleged that Intel illegally withheld from the three companies advanced technical information about its upcoming microprocessors to ''extort'' valuable technology that the companies had developed independently and for which they had secured patents. But outside observers suggested that the FTC's case, which depended on Intel's harming of potential rivals in a way that could potentially hurt consumers in the future, was a risky strategy at best. Intel readily acknowledged it did most of what the FTC alleged -- but argued that companies have a legal right to decide what secrets to disclose to customers about upcoming products. Investigation continues The FTC is continuing an investigation into Intel's wider business practices, including the use of the company's ''Intel Inside'' co-op advertising fund, its dealings with more traditional competition such as rival chip maker Advanced Micro Devices Inc., and its entry into new businesses such as chip sets and graphics chips. For now, though, both sides are in a position to claim victory. Kevin Arquit, an antitrust lawyer in New York, said the FTC accomplished its goal, as the exceptions under which Intel is allowed to withhold advance information about its chips are insignificant. ''Giving up the right to seek an injunction isn't giving up very much,'' Arquit said. ''Companies want their intellectual property to be used, they just want to be paid for it.'' Intel gained a key victory by avoiding any admission in the consent decree that it wields monopoly power, he added. ''That could have caused all kinds of mischief in other, unrelated litigation,'' Arquit said. ''This is a very big upside for them.'' Mercury News wire services contributed to this report.