PublishedAugust 4, 2010

FTC – Intel Settlement: Will It Stop Anticompetitive Practices? The Devil Will be in the Details

Today, the Federal Trade Commission announced a proposed settlement with Intel that attempts to halt the company’s anticompetitive behavior and at least partially reverse its effects.

CCIA echoes the comments of Chairman Jon Leibowitz of the FTC who stated that the “sum total of all of [Intel’s] anticompetitive conduct…bolstered Intel’s monopoly and harmed consumers by stunting innovation, limiting choice, diminishing quality and keeping prices higher than they otherwise would have been.” CCIA strongly agrees with this characterization and applauds the FTC’s investigation and its attempt to restore competition and innovation to both the CPU market and related periphery markets. However, the ability of this settlement to achieve its goals remains uncertain. Much will depend how the enforcement mechanisms are structured.

The Computer & Communications Industry Association has been a long-standing advocate for competition in the technology marketplace for more than 35 years, and has actively supported efforts to restore competition to this sector of our industry.

The following statement can be attributed to CCIA President & CEO Ed Black:

“This proposed settlement hopefully means that we may soon end a dark chapter in our industry’s history. However, we are not there yet. Whether the settlement is effective largely depends on how the FTC enforces it, including the mechanisms it puts in place to do so. It also depends on Intel making a good faith effort to live up to the spirit of the agreement. I have seen well-intentioned antitrust actions completely gutted during the enforcement process. If Intel is serious about returning to good standing then it must live by the spirit of the settlement, not just its letter. Whether it does or not remains to be seen.

“CCIA has long urged the FTC to act because of the importance of this market to the whole high-tech industry, its impact on consumers and innovation, and the particularly egregious nature of Intel’s actions. Initial indications are that the Commission’s settlement reflects a deeper and broader understanding of the markets involved than any past rulings against Intel. The forward-looking nature of the settlement is vital to restore competition to a part of the high-tech ecosystem that has been severely harmed. We also agree with the Commission’s assertion that competition in the CPU market, and all high-tech markets, is vital for our nation’s economy as a whole. Of particular significance to our industry is the recognition, once again, that intellectual property rights and claims have been misused to achieve anticompetitive purposes.

“The FTC has taken an enormous step towards furthering competition and innovation in this marketplace, but they have much work to do to make sure that Intel lives up to the spirit of the agreement. Potential loopholes should be identified and remedied and the commission must remain vigilant.

“We also agree with the Commission that Intel, like its competitors, is a company with good people and innovative products that can and should compete on its merits. We hope the conclusion of this investigation results in a change in Intel’s strategy and an end to its anticompetitive practices.”

Further background:

The Federal Trade Commission filed suit against Intel in December 2009 after investigating the company for more than a year and accused it of using its dominant position in the computer chip market to block competitors’ products. Intel has already faced adverse ruling and hefty fines around the world when antitrust authorities in Europe, Japan and South Korea found the company guilty of breaking their antitrust laws.

For more on this antitrust issue, see  http://www.ccianet.org/Intel 

 

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