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. Last Updated: 07/27/2016

Antitrust Watchdog Targets Intel Corp.

WASHINGTON -- Intel Corp. is facing a wide-ranging antitrust investigation by the U.S. Federal Trade Commission, which is exploring whether the nation's leading maker of computer chips has unfairly used its dominance to thwart competition.


The commission's investigation, which has been going on quietly for several months, opens what may prove a difficult new chapter in the federal government's uneasy relationship with the nation's giant technology companies. The basic issue is whether the innovation and marketing muscle that made these companies global leaders is now overwhelming smaller competitors.


The administration of U.S. President Bill Clinton has been trying to work with high-tech companies, even to the point of sponsoring an industry "summit" at the White House this summer. But some officials also express uneasiness that some of the leaders in the high-technology world, starting with dominant players such as Intel and Microsoft Corp., are using their wealth and influence to gain unfair advantages in new markets.


"While big isn't bad, you can't use monopoly power to engage in exclusionary acts or foreclosures, namely shutting people out of a business," said Kevin Arquit, a lawyer with Rogers & Wells in Washington and former director of the FTC's Bureau of Competition.


According to industry sources, the investigation of Intel is a sweeping look at how the chipmaker is maintaining its share of the market for microprocessors and -- perhaps even more important -- expanding into new areas.


Intel makes about 85 percent of the computer logic chips that serve as the brains of personal computers. In the past few years it has also begun to build many of the other components that make up the inside of a PC.


According to a copy of the subpoena circulated by the FTC, the investigation already is focused on several issues: whether Intel tries to pressure customers that use its chips into not buying chips from competing manufacturers; whether Intel has promoted technical standards that unfairly coerce companies into using Intel's chips and components instead of competitors'; and whether Intel requires customers to sign nondisclosure agreements that make it difficult for them to work with other chipmakers.


Howard High, a spokesman for Intel, said the company is cooperating fully with the federal investigators and was confident that the investigation would not turn up any evidence of inappropriate actions.