Intel's Antitrust Case: A Complex Web of Rivals and Customers

The Federal Trade Commission's recent antitrust complaint against Intel Corp. is unusual in that it accuses the company of victimizing both rivals and customers with its withholding of technical data about its processors. This case raises questions about the limits of antitrust law in regulating the behavior of dominant firms in competitive markets. Intel, which controls over 80% of the microprocessor market, has a history of withholding technical data from customers that are also engaged in patent disputes with the company. While Intel argues that this is a legitimate business practice, the commission claims that it is an abuse of market power that stifles competition.

Key Takeaways:

• Intel is accused of withholding technical data from Intergraph, Compaq, and Digital, three companies that were also customers of the company.
• The commission claims that Intel's behavior was an abuse of market power that stifled competition, while Intel argues that its actions were legitimate business practices.
• The case hinges on whether the commission can demonstrate that Intel's behavior harmed actual and potential competitors in the microchip industry.
• The commission will have to prove that Intel's behavior was not an isolated incident, but rather part of a broader pattern of behavior designed to drive competitors out of the market.
• Intel's control of over 80% of the microprocessor market raises concerns about the company's ability to engage in anti-competitive practices.
• The case is reminiscent of the Justice Department's suit against Microsoft Corp. last month, which also involved allegations of anti-competitive behavior by a dominant firm.

Statistics:

• Over 80% of the microprocessor market is controlled by Intel Corp.
• The commission claims that Intel's withholding of technical data harmed actual and potential competitors in the microchip industry.
• Only one of the three alleged victims, Digital, was a significant competitor in the market.
• The commission will have to focus on proving that Intel's behavior drove away potential competitors, which is a difficult case to win.

Sources:

• Federal Trade Commission complaint against Intel Corp.
• Justice Department suit against Microsoft Corp.
• Economic analysis by Carl Shapiro, economics consultant to Intel Corp.