FW: Digital: (NYT) May File Antitrust Suit Against Intel

Joe Barrera (joebar@MICROSOFT.com)
Mon, 2 Jun 1997 10:05:22 -0700

Told you...


Digital May File Antitrust Suit Against Intel
By LAURENCE ZUCKERMAN c.1997 N.Y. Times News Service
As a legal battle between Intel Corp. and Digital Equipment Corp.
escalates over what Digital contends is a violation of its patents, the
next phase could be an antitrust suit filed against the chip maker by
At least that is what Thomas C. Siekman, vice president and general
counsel for Digital, strongly implied in a previously undisclosed letter
to his counterpart at Intel last week.
The letter provides insight into the arguments Digital, the computer
maker, would most likely make as the dispute between the two companies
gains momentum. Digital's challenge could be the first serious
antitrust claim against Intel, which dominates the market for the
silicon chips that act as the central nervous system of a personal
"If they are going to pull the trigger on an antitrust case, they will
pull the trigger on everything they can," said Kenneth R. Adamo, a
patent lawyer with Jones, Day, Reavis & Pogue in Cleveland. "They will
try to get the antitrust department of the Justice Department
interested. It will be your classic high-stakes private antitrust suit."
That could give Intel the kind of headaches suffered by Microsoft Corp.,
which has been the subject of several government antitrust
investigations in recent years.

Oh, and from "Intel: (WSJ) Warning of Weak Quarter Roils Markets, but
Two PC Firms Are Bullish":

> Intel's resilience is based largely on huge bets it made on increasing
> capacity, including $4.5 billion of capital spending this year. Plant
costs are a major
> barrier to entry for Intel's competitors. While Intel is
well-positioned to meet
> expected demand of 70 million chips this year, AMD can make only about
> million, and Cyrix, 1.5 million, according to Dataquest Inc.
I wonder how much spare manufacturing capacity DEC has? If not much,
then not being able to buy Intel chips is going to be pretty limiting...

- Joe

Joseph S. Barrera III (joebar@microsoft.com)
Phone, Office: (415) 778-8227; Cellular: (415) 601-3719; Home: (415)