FTC "considering" Pentium III probe

FTC staff members met with representatives from advocacy groups to discuss the privacy implications of the serial code hardwired into every Pentium III processor. The meeting was prompted by a complaint filed by the Center for Democracy and Technology and supported by a number of privacy advocacy groups, including the American Civil Liberties Union and Junkbusters.

"It was nothing out of the ordinary," said Ari Schwartz, senior policy analyst with the CDT. "They wanted to talk about the complaint, and were asking questions about the complaint."

At the meeting, which took place Monday, privacy representatives were asked whether the chip and its serial code posed substantial harm to consumers, if the feature could easily be avoided by consumers, and if the harm posed by the serial code was not outweighed by countervailing benefits, said Jason Catlett, president of Junkbusters.

FTC staff were "very familiar" with the technology and policy issues surrounding the processor, he said. The FTC "realizes the urgency of the complaint," Schwartz agreed. "Clearly they think there are issues--we are optimistic that things will move forward."

An FTC spokesperson said that the agency has not launched an investigation at this time. "We did receive a complaint, and we did have a meeting with a number of different privacy groups," said Victoria Streitfeld, spokesperson for the FTC. "We're in the process of reviewing," those complaints, and "seriously considering," whether to go forward with a formal investigation.

Intel declined to comment on Monday's meeting, but confirmed that the company has previously met with the FTC to discuss the implications of the Pentium III serial code. Intel stressed that the meetings with the FTC were totally unrelated to the FTC's antitrust investigation, which was tentatively settled today.

"We have a continuing dialogue on a variety of issues," said George Alfs, an Intel spokesman. "There is no investigation, it's an open dialogue. The FTC is trying to get the facts," he said.

Intel included the identification feature to provide an extra layer of security for ecommerce transactions and to aid corporate technology managers who must track computers in large organizations, according to the company.

Privacy issues have come to the forefront in the last few weeks, as Intel attempted to deflect criticism about the Pentium III, and Microsoft put out fires on several privacy fronts. The software company acknowledged privacy lapses in Windows 98 that resulted in user information being transmitted to Microsoft without the user's consent.

The privacy groups are asking that the government enjoin Intel from producing anymore Pentium III chips, although advocates agree that this remedy is unlikely because Pentium III computers are already shipping. Intel has also said it wants to include similar features on new processors, and has recently admitted it included a prototype of the serial code in some of its chips for notebooks.

Catlett said another option may be to compel Intel to ship two versions of processors, one with the serial code enabled, and one without the serial code.

"There have been analogous cases where that kind of remedy was fashioned," Catlett said, pointing to telemarketers who have been restrained from making certain kinds of marketing calls. "It's not a very satisfactory option."

The FTC "intends to meet with Intel again," Catlett said. "Intel's vision of the future where all PCs are identified with a number is not the way that we want to go.

"A personal computer should not give out personal information without a person's consent--people should not be coerced into giving that information by defaults chosen by a user's browser."