FTC extends Intel settlement deadline

Intel and the FTC now have until August 6 to settle a case regarding the agency's antitrust allegations against the chip maker.

By Suzanne Deffree, Managing editor, news -- EDN, July 23, 2010

The FTC (Federal Trade Commission) has extended a deadline it had imposed on Intel Corp for settling the agency's antitrust allegations against the top chip maker.

The FTC on June 21 suspended administrative trial proceedings while the parties considered potential settlement of a case regarding claims of anticompetitive business practices and graphics chips originally filed by the FTC in December 2009. At that time, the deadline for talks was set at 12:01am, July 23. That deadline has now been moved back two weeks to 12:01am, August 6.

The FTC's anticompetitive arguments followed on several international antitrust actions against Intel by FTC counterparts in such places as Korea, Japan, and the European Union, several of which did not ended in Intel's favor. Indeed, the EU imposed on Intel a record fine of more than $1.45 billion in May 2009. In June 2008, the Korea Fair Trade Commission found that Intel violated the country's antitrust laws by offering discounts on microprocessors to two PC makers and levied an approximate $25.4 million fine against the chip maker. And in 2005, the Japan Fair Trade Commission found that Intel used illegal tactics to deter competitors' growth. Intel has vigorously maintained that its business practices are not anticompetitive in all cases.

The FTC charged that the company has "illegally used its dominant market position for a decade to stifle competition and strengthen its monopoly" and in its complaint alleged that Intel has waged a systematic campaign to shut out rivals' competing chips by cutting off their access to the marketplace. In doing so, the FTC said it believes Intel deprived consumers of choice and innovation in CPUs.

According to the FTC complaint, Intel's tactics were designed to "put the brakes on superior competitive products that threatened its monopoly" in the CPU market. The complaint made note of AMD, Intel's closest rival, which had often made similar claims. In November 2009, Intel reached a landmark settlement with AMD to end all outstanding legal disputes between the two companies. Intel paid AMD $1.25 billion as part of the settlement and agreed to abide by a set of business practice provisions. The two companies also entered into a five-year licensing agreement.

The statement from the FTC extending the deadline issued Wednesday followed reports that Intel and the FTC were close to settling.

If Intel and the FTC do not settle, the case is expected to go to trial in September.