Network: Intel faces anti-trust action

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The Independent Culture
IN WASHINGTON last week, the Federal Trade Commission (FTC) went ahead with its threat to bring an anti-trust case against Intel, charging it with illegal business practices and abusing its monopoly power. William Baer, the director of the FTC's Bureau of Competition, said Intel, which controls 80-90 per cent of the microprocessor market, had used its dominant market position to force companies to give up intellectual property rights or risk being denied essential information about Intel chips. Withholding key information, he said, had stifled competition and impeded innovation.

"The case seeks to prevent Intel from repeating this conduct," Baer said. "In at least three cases against three major customers [DEC, Intergraph and Compaq], Intel used its position to cut off customers who had asserted their own patent rights with respect to microprocessors and technologies that rivalled Intel's technology."

Intel said the FTC's case was "based on a mistaken interpretation of the law and the facts", that it would be "unable to show harm to competition" and that it was within its rights to use its intellectual property to protect the profitability of its core business.

Before the case is heard the complaint must go to an FTC administrative law judge for trial, after which the losing side will be able to appeal.

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THE US government will transfer control of Internet domain names to a new, non-profit organisation, but the process, set to begin in October, will take two years. Details of how the organisation will be established are being left to the industry groups, businesses and international bodies involved.

The new organisation will have the authority to establish a worldwide network of registrars, each of whom will be able to sell new top-level domain names such as .arts, .firm, .info, .nom, .rec, .shop and .web, and provide consumers with other Internet-related services.

Ken Stubbs, chairman of the Internet Council of Registrars, said: "The US government policy should allow market forces to begin exerting themselves for the first time in the domain name space. Providing more choices in domain names will ensure continued growth of the Internet as an international resource for commerce and communications.''

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AOL PAID $287m (pounds 173m) cash last week in a deal eventually worth up to $400m for the Israeli technology company Mirabilis and its ICQ chat software. ICQ, with 13 million users, is the most widely used chat software on the Internet.

Like AOL's Instant Messenger service, it allows immediate contact and discussion between users who are logged on to the Net regardless of whether they have an e-mail program active. However, typical ICQ users - young and Net literate - are sceptical of the takeover, worrying that the free service will lose its identity and appeal if it is subsumed into AOL's family-oriented, advertising-rich environment.

Yossi Vardi, chairman of Mirabilis, said that he expected the service to continue to be free. However, he also said that "reasonably placed" banner advertisements were likely.

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THE ONLINE bookseller Amazon.com expanded its retail business last week by branching out into the growing market of music sales over the Internet. Amazon.com's music site will be accessible from the company's main Web page. CDs will be offered at discounts of 10-40 per cent.

Sales of recorded music over the Internet are projected to rise from $300m this year to $2.5bn in 2002. Amazon.com, which had sales of $87m in its most recent quarter, is moving to ensure that it becomes a major player along with CDNow and Music Boulevard.

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THE YAHOO! Web site attracted almost 8 million more visitors than its nearest competitors last month, according to a report from RelevantKnowledge. The report calculated that 57 million people in the US used the Web in May, with 30.6 million accessing Yahoo! services, 22.8 million AOL and 18.8 million Netscape.

Aiming to maintain its position as market leader in the Web portal sector, the company last week signed a pact for an undisclosed amount with Compaq so that users of Compaq's new Internet PC will have Yahoo! as their primary gateway to the Net. In a separate deal, worth $49m in stock, Yahoo! signed a definitive agreement to purchase the electronic commerce software company Viaweb in preparation for expanding its Web offerings to include a site providing clients design, hosting and set-up services for online stores.

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INKTOMI, the Internet search and software company, made its debut on Wall Street last week and doubled its initial share price on its first day of trading. The Californian company, whose technology powers many leading Internet directories, including Yahoo!, HotBot and Cnet's Snap, went public at $18 a share and closed at $36 on the Nasdaq market. With 2 million shares floated, the offering generated around $36m.

The company, whose name comes from a Lakota Indian word for wit and cunning, has an agreement to power an upcoming search service for Microsoft's Start portal site and works with several international Internet providers. It also makes network caching software, used by AOL and other online services to reduce Internet bottlenecks.

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