For Your Information: August 6, 1999
The Federal Trade Commission today announced the following actions.
Consent agreements given final approval: Following a public comment period, the Commission has made final consent agreements with the following entities. The Commission action makes the consent order binding on the respondents.
- Intel Corporation. Docket No. 9228. The Commission vote to approve the consent order as final was 3-1, with Commissioner Orson Swindle dissenting. (See earlier news releases dated March 17 and March 8, 1999; June 8, 1998; Staff contact is Richard G. Parker, 202-326-2574.)
In a separate statement, Commissioner Swindle stated: "I am unable to vote in favor of the consent order because I continue to lack reason to believe that Intel's actions against Digital, Intergraph, and Compaq would have adversely affected competition and innovation in the ways charged in the complaint. . . .
"It is upon the plausibility of [the] theory [that Intel's conduct is likely to cause a reduction in 'competition to develop new microprocessor technology and future generations of microprocessor products'] . . . that I part ways with the majority. . . . [E]ven if one concedes that Intel has monopoly power, I cannot comfortably translate its actions vis-à-vis three customers into the threat to microprocessor innovation depicted in the complaint. Indeed, even if one were to characterize Intel's alleged conduct as aggression against customers rather than self-defense, it seems a considerable stretch to expand that conduct into a case about chilling innovation and otherwise reducing technological competition. I am not aware of any substantial evidentiary support for the theory that Intel's customers or others in the industry canceled development projects, cut research and development, or otherwise reduced innovation in response to Intel's conduct.
"I therefore remain unpersuaded that the conduct at issue in this case demonstrably threatened to harm the consuming public. Whatever injury Intel might have visited on Digital, Intergraph, and Compaq, I cannot accept that it could appreciably affect -- much less stem -- the immense tide of invention and improvement that continuously drives this industry.
"Accordingly, because I still lack reason to believe that Intel's alleged conduct constituted a violation of Section 5 of the Federal Trade Commission Act, I dissent."
In a statement responding to Commissioner Swindle's dissent, FTC Chairman Robert Pitofsky and Commissioners Sheila F. Anthony and Mozelle W. Thompson said, "Today, the Commission accepts the proposed settlement in this matter without modification. Our colleague, Commissioner Swindle, remains unpersuaded 'that the conduct at issue in this case demonstrably threatened to harm the consuming public' because he 'cannot accept that it could appreciably affect - much less stem - the immense tide of invention and improvement that continuously drives this industry.' We respectfully disagree with Commissioner Swindle for two simple yet fundamental reasons.
"First, we continue to have reason to believe that Intel, which the majority has reason to believe is a monopolist, engaged in 'conduct, other than competition on the merits or restraints reasonably 'necessary' to competition on the merits, that reasonably appear[s] capable of making a significant contribution to creating or maintaining monopoly power.' Barry Wright Corp. v. ITT Grinnell Corp., 724 F.2d 227, 230 (1st Cir. 1983) (Breyer, J.) (quoting III P. Areeda & D. Turner, Antitrust Law ¶ 626 at 83 (1978)). Nothing in the public comments submitted to the Commission leads us to depart from our initial judgment.
"Second, requiring 'demonstrable' harm to competition after pretrial settlement has no legal basis because it has no practical basis. Settlement of the case necessarily prevents us from making any final judgment about the actual evidence of harm to competition from Intel's conduct."
Apple Computer, Inc. Docket No. C-3890. The Commission vote to approve the consent order as final was 4-0. (See news release dated January 26, 1999; Staff contact is Matthew D. Gold, 415-356-5270.)
Dell Computer Corporation. Docket No. C-3888. The Commission vote to approve the consent order as final was 4-0. (See news release dated May 13, 1999. Staff contact is Sally Forman Pitofsky, 202-326-3318.)
Micron Electronics, Inc. Docket No. C-3887. The Commission vote to approve the consent order as final was 4-0. (See news release dated May 13, 1999. Staff contact is Sally Forman Pitofsky, 202-326-3318.)
Fitness Quest, Inc. Docket No. C-3886. The Commission vote to approve the consent order as final was 4-0. (See news release dated May 12, 1999. Staff contact is Robert M. Frisby, 202-326-2098.)
SNIA S.p.A. Docket No. C-3889. The Commission vote to approve the consent order as final was 4-0. (See news release dated May 14, 1999. Staff contact is Ann B. Malester, 202-326-2820.)
Copies of the documents referenced above are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
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