Posts Tagged ‘Chuck Mulloy’
Thursday, December 17th, 2009

Intel Corp. is raising questions about whether the Federal Trade Commission acted hastily in filing an administrative lawsuit against the chip maker yesterday.

The agency sent its first subpoena to Intel just last week for information on certain conduct included in its lawsuit filed yesterday, Intel’s spokesperson Chuck Mulloy confirmed to Main Justice.

The subpoena, issued on Dec. 8, was the first time the FTC asked Intel to provide information related to the graphics chip market, Mulloy said. Although the agency had opened an antitrust investigation of Intel in May 2008, yesterday’s lawsuit was the first time any regulatory agency had singled out the company’s conduct in the market related to graphics and multimedia.

Intel hired former Antitrust Division chief Doug Melamed last month. (Getty Images)

Intel hired former Antitrust Division chief Doug Melamed last month. (Getty Images)

Intel had been in settlement talks with the agency. Those talks broke down over several new issues, Intel’s general counsel, Douglas Melamed, said in a conference call with reporters yesterday. The issues included graphics and benchmarks, which had not been fully investigated by the FTC, Melamed said.

“They wanted concessions on graphics that they hadn’t even investigated,” Mulloy said in an interview.

The FTC’s competition bureau director, Richard Feinstein, said in a news conference yesterday that the FTC staff had thoroughly investigated the claims outlined in its complaint.

The FTC lawsuit against the chip maker outlines a broader case against the company than other complaints have raised.

In the past, Intel has been accused of illegally inducing its customers to spurn rival products. The FTC’s case alleges that Intel also engaged in anti-competitive behavior in a separate market for chips, known as graphics processing units, that are made for heavy multimedia use.

An FTC spokesman also said the agency investigates matters for some time before issuing subpoenas for specific information.

The FTC has accused Intel of resorting to “deception and coercion” to catch up with rival innovators as it “fell behind in the race for technological superiority.”

Intel has fought back against the lawsuit by claiming that the FTC is overreaching both in its legal case against Intel and in the changes that the FTC is seeking in Intel’s behavior.

The broad scope of the FTC’s suit surprised many observers, given that Intel had previously signaled it was open to resolving the many antitrust issues against it. Last month Intel agreed to pay rival chip maker Advanced Micro Devices, Inc. $1.25 billion to settle a long-running dispute over rebates Intel offered its customers. The company also hired Melamed last month, adding a savvy insider to its team. Melamed, most recently a partner at WilmerHale, had been acting chief of the Justice Department’s Antitrust Division during the Clinton administration.

Tuesday, November 17th, 2009

Intel Corp. executives will meet with officials at the Federal Trade Commission this week to discuss its recent settlement with rival computer chip-maker Advanced Micro Devices, Inc., the company’s spokesman, Chuck Mulloy, said in an interview with Main Justice.

The long-feuding Silicon Valley neighbors called a truce last Thursday, with Intel agreeing to pay its smaller competitor $1.25 billion.  Advanced Micro Devices (AMD) agreed to withdraw its formal complaints with antitrust regulators in the U.S., Europe and Japan. The settlement covers certain types of rebates that are at the heart of the dispute, but leaves the fate of other discounts to be hashed out with the FTC and other agencies.

amdThe FTC has said its investigation into Intel’s pricing tactics is ongoing, and is not affected by the new agreement. Intel is meeting with the FTC, Mulloy said, to explain the settlement and answer any questions the FTC might have. “We couldn’t get flights [to Washington, D.C.] sooner,” Mulloy joked, on the timing of the meeting.

While AMD will retract its formal filings as a result of the settlement, it will still be able to lobby seeking government action on conduct not covered by the agreement. The settlement forbids Intel rebates that are conditioned on a promise not to do business with AMD, a practice Intel asserts it has never engaged in.

But Intel is also under the gun from competitors and regulators for other customer discounts that don’t explicitly name competitors.

AMD wanted a comprehensive settlement that addressed all loyalty discounts, according to its lead counsel Chuck Diamond, who is a partner at O’Melveny & Myers in Los Angeles. But Intel countered that including such discounts in a settlement with a competitor would itself be a violation of antitrust laws. ”We [Intel and AMD] are the two suppliers of x86 microprocessors,” Mulloy said, “we will not reach any agreement with them with relation to price.”

intelIn addition to customer discounts not covered by the settlement, there may be newer allegations on the table when FTC officials and Intel execs meet. AMD has long been the driver of the FTC’s investigation into Intel. In the past six months, other competitors in the microprocessor market have begun to complain about Intel conduct. Nvidia, which makes chips tailored for gaming and other high-end graphics processing, exited one part of the market last month and accused Intel of “unfair  business practices” that forced it out.

Nvidia and Intel are engaged in a licensing dispute in federal court in Delaware, but are not currently involved in any antitrust litigation.

In a signal that Intel’s legal woes are ongoing, the company appointed antitrust heavyweight Douglas Melamed as its new general counsel. Melamed, most recently a partner at WilmerHale, spent five years as a top antitrust official during the Clinton administration.

In addition to the open FTC investigation, Intel is still facing 80 class action lawsuits that are consolidated in federal court in Delaware, appeals in the European Union and Korea, and a lawsuit from the New York state Attorney General, where Intel’s response is expected by mid-December.