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Intel may face FTC suits
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April 28, 1998: 2:31 p.m. ET
Company could be charged with holding back technology from customers
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NEW YORK (CNNfn) - U.S. antitrust regulators may be planning a pair of lawsuits against Intel Corp., which makes the microprocessors that power 90 percent of the world's computers.
The Federal Trade Commission, which has long been investigating the Santa Clara, Calif.-based chip maker, is expected to file a suit within the next few weeks accusing Intel of holding back technology from customers and companies with which it has running disputes, the daily USA Today said Tuesday.
Intel spokesman Chuck Mulloy declined comment on the report, but said, "all we know for sure is that the investigation is continuing."
The FTC started an antitrust probe of Intel last September, he said, adding "it is our job to cooperate."
In addition, the FTC could file a broader case charging Intel with forcing PC makers that license its chips to also buy related parts that link to the hard drive or to other parts on the motherboard, the paper said. That case could take up to a year to file, the newspaper said, citing unnamed sources.
Such a move could threaten Intel at a time when competitors such as Advanced Micro Devices Inc. and Cyrix Corp. have begun to chip away at its market dominance.
Meanwhile, earlier this month a federal judge issued an injunction against Intel for keeping chip information from a customer, Intergraph Corp. That company uses Intel chips in its graphics computers.
The possibility of legal action against Intel also comes at a time fellow computer industry titan Microsoft Corp. has drawn the scrutiny of the Justice Department.
Justice has charged the software maker -- which, with Intel, makes up the computer Brobdingnagian known as "Wintel" -- with forcing computer makers to take Microsoft's Internet browser when they buy the market-dominant Windows operating system.
Mona Eraiba, an analyst with Gruntal & Co., said Intel's case is different, because the chip maker has been much less combative with regulators than has Microsoft.
"It would be a long, uphill battle for the government," said Eraiba, adding that a case against Intel isn't likely to hurt the company's stock price. "Microsoft really destroys the competition … Intel really is very careful about what they do."
A possible solution for the charges that Intel allegedly withholds technology would be to make its chip codes available for PC makers to use non-Intel chip sets, USA Today said.
Intel (INTC) was down 1-3/16 at 78-13/16 in Nasdaq trading Tuesday afternoon.
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