Breaking Up Intel Is Not the FTC's Goal, Senior Official Says

Not too long ago, the Federal Trade Commission filed an antitrust lawsuit against Intel Corp. on the grounds that the latter had been using anticompetitive tactics in order to ensure and/or strengthen in monopoly. The FTC claimed that it was seeking a ruling aimed to prevent Intel from similar tactics in the future. Following Intel's response, which implied that the FTC's demands endangered its ability to conduct business, the latter responded by saying that breaking up the company is not their goal in the matter.

The Commission restated that it wanted only to see Intel stop performing those acts which the FTC saw as anticompetitive. It also said that it didn't aim to impose financial penalties on the Santa Clara company and that it also did not wish to see it broken up. Richard Feinstein, director of the FTC's Bureau of Competition, said that the FTC had "no goal of breaking up Intel" and that they were “not seeking divestiture."

As a reminder, the FTC claims that Intel has been directing threats and incentives towards large manufacturers, such as Dell, HP and IBM, in order to force them to use its chips instead of products from competing companies, especially Advanced Micro Devices. The Commission also claims that Intel's compiler software was designed in a way as to hinder the performance of competing chips.

Intel, on the other hand, stated in its response to the accusations that the FTC allegedly based its lawsuit largely on claims “made at the last minute.”

"This case could have, and should have, been settled. Settlement talks had progressed very far but stalled when the FTC insisted on unprecedented remedies – including the restrictions on lawful price competition and enforcement of intellectual property rights set forth in the complaint - that would make it impossible for Intel to conduct business” said Intel senior vice president and general counsel Douglas Melamed. “The FTC's rush to file this case will cost taxpayers tens of millions of dollars to litigate issues that the FTC has not fully investigated. It is the normal practice of antitrust enforcement agencies to investigate the facts before filing suit. The Commission did not do that in this case.”

Forcing companies to break up would not exactly be a first in history, as the Government forced such a process upon AT&T back in 1984 and a similar action was attempted against Microsoft in 2001 by the Department of Justice. The FTC's lawsuit is already starting to be felt by the Santa Clara company, as its shares dropped by 0.52% on Thursday, to $19.28.