INTEL Corporation’s brand new general counsel Douglas Melamed has entered a company under fire from claims of illegal tactics. Despite years of experience in antitrust matters, the California-based lawyer faces a weighty challenge.
The United States’ Federal Trade Commission this week sued the computer chip giant, accusing it of illegal tactics to stifle competition for the past ten years in a bid to keep prices for computer chips artificially high.
The Commission said Intel has illegally used its dominant market position to strengthen its monopoly.
It said: “The FTC alleges that Intel has waged a systematic campaign to shut out rivals’ competing microchips by cutting off their access to the marketplace. In the process, Intel deprived consumers of choice and innovation in the microchips … Intel’s anticompetitive tactics were designed to put the brakes on superior competitive products that threatened its monopoly in the [computers’ central-processing unit] microchip market.”
The Commission said the strategy has succeeded in maintaining the Intel monopoly at the expense of consumers.
For Intel’s general counsel, Melamed, the furore has required some heavy negotiations, and he told the Associated Press his company was far into settlement discussions with the FTC.
However, these negotiations fell apart when the FTC requested “unprecedented remedies … that would make it impossible for Intel to conduct business”, AP reported.
Melamed said the demanded remedies include limits on what Intel can charge for chips and how it guards intellectual property when dealing with technology companies and partners.
Melamed was initially brought in as Intel announced it would pay US$1.25 billion to settle the antitrust and patent disputes. The company hired Meladmed just one day before it made that announcement, Corporate Counsel magazine reported.
Melamed himself had previously worked as WilmerHale as a partner and antitrust specialist. In that role he had counselled Intel, as well as other companies, on antitrust matters, and has also investigated antitrust matters for the US government.