Intel FTC Case Has Little Merit, Analyst Claims

The FTC has already stated it has "no goal of breaking up Intel," but the FTC does want Intel to simplify the licensing terms for its x86 instruction set.
Posted December 30, 2009
By

Andy Patrizio


The lawsuit filed by the Federal Trade Commission against Intel is "overblown" and won't lead to much of anything beyond perhaps a settlement, argues one market analyst following the case.

The FTC's case is multi-faceted, taking on Intel for alleged anticompetitive behavior, but also taking it to task for its x86 licensing terms and practices. The FTC's suit came after Intel had fought and lost similar allegations in Japan, Korea and Europe, the latter hitting Intel with a $1.45 billion fine (Intel is appealing).

The FTC has already stated it has "no goal of breaking up Intel," but the FTC does want Intel to simplify the licensing terms for its x86 instruction set. Broadpoint AmTech analyst Doug Freedman said there is little chance the courts will force Intel (NASDAQ: INTC) to license its x86 technology. At that point, Freeman said in a research note he believes the FTC will be forced to settle for something less.

"We believe attempts were made to resolve the issue non-publicly," Freedman wrote, "but Intel balked at the FTC's requirements to license its buses, as well as x86 processors, to [Nvidia]."

Intel has said just that; it tried to work things out quietly. "This case could have, and should have, been settled. Settlement talks had progressed very far but stalled when the FTC insisted on unprecedented remedies - including the restrictions on lawful price competition and enforcement of intellectual property rights set forth in the complaint - that would make it impossible for Intel to conduct business," said Doug Melamed, Intel senior vice president and general counsel in a statement.

Read the rest at Internetnews.






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