Why Feds Go after High Tech FTC Suit against Intel Signals New Antitrust Assault on Computer Industry

By Peter Grier, writer of The Christian Science Monitor | The Christian Science Monitor, June 11, 1998 | Go to article overview
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Why Feds Go after High Tech FTC Suit against Intel Signals New Antitrust Assault on Computer Industry


Peter Grier, writer of The Christian Science Monitor, The Christian Science Monitor


The personal computer industry has become so important to the US economy in so many ways that government regulators are going to give it special attention for years to come.

That's the likely message of the Federal Trade Commission's new antitrust case against the Intel Corp. In just the last few months, federal agencies have now filed suit against both Microsoft and Intel, the software and hardware halves of the PC "Wintel" behemoth. Regulators hint that more related actions may be coming.

But whether Washington should, or can, change high tech's behavior remains an open question. US officials are applying an old tool - antitrust law - to a new industry where many of the old business rules don't apply. "Is it feasible to try to control the computer industry at all, when the weapon you have at hand is a set of laws which are going to take considerable time to articulate, where everything may have run away from you by the time you get in front of a judge?" says Lawrence Sullivan, a professor at the Southwestern University School of Law in Los Angeles. Neither the Microsoft case brought by the Justice Department, nor the FTC's Intel case, deal with sweeping theoretical aspects of antitrust law. Instead, both are relatively narrow complaints that deal with the firms' conduct in trying to improve their products and enter new markets. The Microsoft case is the bigger of the two. It alleges that the software colossus is unfairly using the dominance of its Windows operating system to try to improve the market prospects of its Explorer World Wide Web browsing tool. The action "is but the opening salvo in what I believe will be one of the most important antitrust cases in modern history," said Sen. Orrin Hatch (R) of Utah, Judiciary Committee chairman, in June 9 speech to a high-tech trade industry group. Senator Hatch - whose state is home to one of Microsoft's major rivals - said that freedom of commerce on the Internet was just one of the issues hinging on the case's outcome. Microsoft's Bill Gates sees the case in a different light, of course. He complains that the US government seems to want to punish him for improving his products, and that innovation will be stifled if the Justice Department prevails.

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