Intel facing monopoly abuse charge

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The Independent Online
US competition authorities were yesterday preparing an anti-trust action against the chip-maker Intel. It is the second high-profile move against the companies which dominate global markets for high-technology equipment.

The Federal Trade Commission is likely to charge Intel with abusing its near-monopoly power in the microprocessor market, by refusing to share information about its products with competitors or with companies that they have a problem with, reports said. Intel makes the microprocessors that control more than 80 per cent of personal computers, producing the 286, 386 and 486 (the x86 series) and the Pentium processor. In particular, it has a near-monopoly of chips that will run Microsoft's Windows NT.

The move against Intel coincides with anti-trust suits against Microsoft, the dominant producer of software for personal computers, though it is not directly related. The suit against Microsoft is spearheaded by the Justice department and 20 US states; the FTC moves may reflect something of a turf war, with the FTC - a federal agency - intent on staking out its claim to the computer market against the Department of Justice, a government department.

Just last month, a judge in Alabama said that Intel had refused to share information with the computer maker Intergraph, threatening its business. Intel is said to have carried out similar measures against computer maker Digital Equipment Corporation. It is also accused of having changed the design of its chips so that they will only fit certain sockets. "This `closed architecture' for practical purposes allows Intel, by exercising its intellectual property rights ... to wield absolute power over who will and who will not be allowed in that part of the high-end computer industry that is based on the 'x86' architecture," ruled a US district judge.

The design change is seen as being aimed its chief competitors, AMD and National Semiconductor, by encouraging computer makers to stick with one supplier.

Intel does not dispute that it limits information-sharing, but it claims that it is doing nothing illegal. The FTC's case is likely to rest on Intel's monopoly position, which, it will claim, puts its actions in a different category from other manufacturers. The FTC is still preparing its case, and it is possible that action could be headed off by a deal with Intel.

Lawyers and officials in Washington caution against seeing the Intel and Microsoft cases as evidence of a renewed appetite for "trust-busting". They say that both cases are unrelated, with the Microsoft case by far the more important. Even there, they say, it is hard to see a pattern developing of anti-trust actions.

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