Intel antitrust suit delayed

The FTC's action against the chip giant has been moved to February 18 to accommodate the judge's schedule.

Michael Kanellos Staff Writer, CNET News.com
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas.
Michael Kanellos
2 min read
The Federal Trade Commission's antitrust action against Intel has been postponed until the middle of February to accommodate the schedule of the presiding judge.

The administrative action will now begin on February 18, according to Chuck Mulloy, an Intel spokesman. Earlier, Judge James Timoney set the trial for a January 5 starting date.

In the action, the FTC is alleging that Intel uses unfair, monopolistic business practices to the detriment of computer vendors, processor manufacturers, and graphics chipmakers. The case primarily revolves around three incidents where Intel terminated or threatened to terminate nondisclosure agreements with computer vendors that would not license intellectual property to Intel.

Terminating the nondisclosure agreements constituted an unfair business practice because the chip vendors needed the information that gets conveyed under the agreements to compete, according to the FTC.

Intergraph, for instance, alleged that See related special feature: 
A look at the FTC it had to delay a workstation because of Intel's retaliatory termination of a nondisclosure agreement and suffered continued product delays because of Intel's actions. Intel began to provide information under nondisclosure agreements after an Alabama court ordered the company to earlier this year.

Intergraph has a separate lawsuit covering many of the same issues in a separate, private lawsuit in the United States District Court in Alabama.

For its part, Intel does not dispute the factual substance of the allegations. The company admits it pulled the nondisclosure agreements, for example. However, it maintains that it has the legal right to do so. Intel chief executive Craig Barrett has characterized the case as a reasonable disagreement.

Barrett also joked recently at the Intel Developer's Forum that the company's recent financial performance belies a contention that a monopoly exists.

"We've had quarters of flat revenue and earnings," he said. "We're a pretty crummy monopoly."

Legal experts differ widely on the merits of the case. Sources close to the FTC tend to say that the case has merit, while private defense attorneys tend to doubt its potential for success. A complicating factor in the case is that two of the three companies allegedly harmed by Intel's conduct are not direct competitors, but customers, legal analysts have pointed out.

The FTC is also said to be investigating other business practices of Intel for a wider, more far-reaching suit, sources have said.

Discovery in the pending case began recently, although no depositions have taken place yet.

It is likely, but not clear at this time, whether the delay will extend the discovery period. If so, such a delay could benefit Intel. The chipmaker initially requested a mid-February date for the administrative hearing. FTC prosecutors wanted to start in December. Judge Timoney in July ruled that the trial would begin January 5.

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