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FTC Charging Intel With Anticompetitive Practices

As expected, the government is charging that Intel has used its market dominance to stifle competitors' efforts.

By Richard Mullins, PCWorld   

Intel is the second major high-tech company to face government antitrust charges in the last month.

The Justice Department is suing Microsoft for antitrust violations, charging that company used its dominance to stifle competition in the software market. Microsoft and Intel together supply the vast majority of software and microprocessors for the world's personal and business computer market.

In the complaint filed Monday afternoon at the Federal Trade Commission, the commission's Bureau of Competition charged that Santa Clara, California-based Intel "used its monopoly power to cement its dominance over the microprocessor market" by denying technical specifications of new Intel chips to certain computer manufacturers that build their products around Intel chips.

Semiconductor suppliers like Intel routinely offer customers technical know-how so that vendors can customize computers to fit the supplier's products.

The complaint filed with the FTC charges that Intel cut off three manufacturers from this information as retribution because those companies, Digital Equipment, Intergraph, and Compaq, sued Intel for patent infringement.

"Intel sought to injure these companies in order to secure [its] technology," said Bill Baer, director of the Bureau of Competition.

At the news conference announcing the complaint, Baer said that Intel's 79.9-percent market share is a legal monopoly, but it is illegal for the firm "to cement its monopoly power by preventing other firms from challenging its dominance."

Baer said if Intel, with more than $20 billion in annual revenues, abuses its monopoly position, the effect "is like a nuclear bomb. They pull it out of their pocket and the game is over."

The case now goes to an administrative law judge, who Baer said likely will decide the case within a few months. Baer said whichever side loses that case likely will appeal to federal court.