Tuesday's edition of The Washington Post, citing sources close to the case, reports that the recommendation by William Baer, director of the FTC's bureau of competition, "virtually ensures" that the agency will sue Intel in an antitrust case.
The agency's five commissioners are expected to vote on the matter within a week, the sources said. FTC attorneys have been investigating Intel's business practices since September 1997. A central issue is whether Intel has leveraged its approximately 85 percent market share to subdue competitors and third parties, while locking OEMs into using Intel processors.
The FTC declined to comment on its investigation but previous comments demonstrate its belief that Intel's market power could stymie competition.
"Maintaining and enhancing Intel's market power ... could result in increased prices and reduced quality and innovation in each of the relevant markets,'' the FTC said in an April statement when it conditionally approved Intel's purchase of Digital's semiconductor business. One critical piece the FTC may use against Intel is the chip maker's patent dispute with Intergraph. In that case, a federal judge ruled that Intel wrongfully withheld products and information from Intergraph because the computer maker was suing Intel. Intel officials were not available to comment. The news comes in the wake of Intel's acknowledgment late last week that its next-generation 64-bit processor, code-named Merced, will be delayed by about six months to mid-2000.