Intel Challenges FTC Accusations

Those who follow the news must know that, yesterday, Intel was hit by yet another antitrust case. The plaintiff is none other than the Federal Trade Commission. The accusations include alleged threats and incentives directed by Intel towards large manufacturers, such as Dell, Hewlett-Packard, and IBM, in order to lead them away from chips offered by competing developers. The Santa Clara-based corporation answered the claims and, while the response is not entirely unexpected, it makes certain statements, which directly challenge the validity of the claims.

"Intel has competed fairly and lawfully. Its actions have benefitted consumers. The highly competitive microprocessor industry, of which Intel is a key part, has kept innovation robust and prices declining at a faster rate than any other industry,” said Intel senior vice president and general counsel Doug Melamed. “The FTC's case is misguided. It is based largely on claims that the FTC added at the last minute and has not investigated. In addition, it is explicitly not based on existing law but is instead intended to make new rules for regulating business conduct. These new rules would harm consumers by reducing innovation and raising prices."

Intel mentioned, in its defense, that, instead of carrying out anticompetitive practices, it actually helped in rapid technological advancements by investing $7 billion in its U.S. manufacturing operations. Also, besides saying that its practices were actually beneficial, Intel stated that it had actually progressed quite far with the settlement talks until the FTC started requesting solutions which, Intel claims, would jeopardize the company's ability to conduct business. This, the chip maker pointed out, would directly affect the 40,000 people it employs and, as mentioned in the quote above, would negatively affect consumers worldwide.

"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” revealed 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.”

Whether the case is really misguided or Intel did engage in anticompetitive practices will eventually be decided in court. A hearing before the Administrative Law Judge is tentatively scheduled for September 15, 2010, at 10:00 a.m.