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FCC, Intel in talks on antitrust case

By Joel Schectman
Associated Press / June 23, 2010

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NEW YORK — Intel Corp. and the Federal Trade Commission are in talks to settle an antitrust case against the chip maker, a move that could make it more difficult for rivals to pursue damages.

In December, the FTC filed charges against Intel, seeking to end what it described as decades of illegal sales tactics that have hampered competitors and kept prices for computer chips artificially high.

This week, the FTC and Intel agreed to suspend administrative trial proceedings as they work on hashing out a settlement.

The FTC accused Intel of strong-arming computer makers into exclusive deals, manipulating technical data to make its chips look more powerful than those from competitors, and blocking rivals from making their chips work with Intel’s.

Intel, which disclosed the settlement talks late Monday, has disputed the charges and said it has merely been offering discounts. A settlement would be at least a partial victory for Intel, said Robert Lande, director of the American Antitrust Institute at the University of Baltimore. If Intel loses in court, rival chip makers such as Nvidia Corp. would be able to pursue damages without having to again prove the antitrust. By contrast, settlements often come without any admission of wrongdoing.

“Once you’ve lost the case in federal court you can’t deny the charges anymore,’’ Lande said. Although an FTC settlement would ease Intel’s legal troubles in the United States, the company still faces trouble abroad. A harsh settlement against Intel could bolster the case for stronger measures in European and Asian courts, where Intel is fighting penalties for anticompetitive practices. Lighter terms could discourage plaintiffs outside the United States, Lande said.

A key question remains about whether the cases will affect computer prices. Intel says its sales strategies help keep chip prices low. The FTC argues prices haven’t fallen as much as they could have.

Roger Kay, president of Endpoint Technologies Associates, said Intel’s practices could harm consumers by destroying competitors that have innovative technologies.