The Federal Trade Commission has given final approval to a
consent order settling charges that Intel stifled innovation in the
microchip industry.
The FTC's 3-1 vote last week formally
resolves an antitrust action filed in June 1998 accusing Intel of illegally
targeting three customers. Attorneys for Intel and the FTC first agreed to
the consent
order in early March, the day before the trial was to start.
Despite the settlement, the FTC is continuing a broad investigation probing
virtually all of Intel's business practices, Intel spokesman Chuck Mulloy
said.
"We are
continuing to cooperate with all of their requests, and we're confident
that when they complete their investigation they will conclude that we
conduct our business in a fair and lawful manner," he said.
The FTC's complaint alleged that Intel acted as a
monopolist when it illegally threatened to withhold crucial product
information and samples from Intergraph, Compaq, and Digital Equipment (now
owned by Compaq) after the companies independently refused to license their
respective technology to the chip giant.
The tactics, the FTC claimed, put potential Intel rivals at a competitive
disadvantage by eroding their intellectual property rights.
Intel maintained it was not a monopolist and that its actions against the
three companies were necessary to preserve its own rights.
Under the agreement, Intel may not withhold product information from
customers suing for patent infringement unless the suit seeks an injunction
blocking the sale or manufacture of Intel chips.
The
agreement was designed to strike middle ground between the parties.
Potential customers dependent on Intel may enforce their patent rights
without worrying about losing access to crucial information.
The No. 1 chipmaker, on the other hand, need not worry that it is
providing products to a company that is asking a court to terminate future
Intel product plans.
The only commissioner to vote against the agreement was Orson Swindle, who
said it and the entire antitrust action were based on faulty premises.
"I...remain unpersuaded that the conduct at issue in this case
demonstrably threatened to harm the consuming public," Swindle wrote in
public comments. "Whatever injury Intel might have visited on Digital,
Intergraph, and Compaq, I cannot accept that it could appreciably
affect--much less stem--the immense tide of invention and improvement that
continuously drives this industry."
A majority opinion responded that they remained convinced that Intel's
actions were an example of "a monopolist engaged in conduct, other than
competition on the merits," that was capable of preserving its dominant
position.