FTC Refuses Intel's Request to Disqualify Commissioner

Intel has lost its bid to have one of the commissioners participate in the Federal Trade Commission’s lawsuit against the giant chip maker.

Hours before the FTC filed the antitrust complaint against Intel, officials with the company petitioned the commission to have Commissioner J. Thomas Rosch disqualified from sitting on the case. Intel claimed a conflict of interest because Rosch had worked with Intel between 1987 and 1993, advising the company on numerous antitrust matters.

Rosch was one of three commissioners who voted to move forward with the lawsuit against Intel, which accuses the chip maker of anticompetitive behavior not only in its dealings with rival Advanced Micro Devices over the past decade but also in its current relationship with Nvidia in the graphics chips space.

In his ruling Jan. 19, FTC Chairman Jon Liebowitz denied Intel’s request, saying that Intel officials had given no reason for questioning whether Rosch could be impartial in the case, outside of the fact that he had worked for Intel previously.

“The bulk of the [Intel] Motion is dedicated to showing simply that Commissioner Rosch represented Intel before the Commission in another antitrust matter a number of years ago,” Liebowitz said, adding that “the matters upon which Commissioner Rosch previously advised Intel are so distant in time—and concern technology, allegations, and business relationships that are so dissimilar to those relevant to the present matter—that they are not at all ‘substantially related’ to the current proceeding.”

He also questioned the “eleventh-hour nature” of Intel’s request, given that Rosch had met several times with Intel without company officials raising the disqualification issue.

The FTC’s lawsuit against Intel surprised some industry observers, who had assumed that the federal commission would back off of its investigation following Intel’s legal settlement with AMD Nov. 12, which included a $1.25 billion payment and promises to refrain from any anticompetitive behavior.

In addition, Intel is still appealing the European Commission’s $1.45 billion fine levied in May and also is battling an antitrust lawsuit filed by the New York Attorney General’s office.

However, the FTC expanded the scope of complaint against Intel to include Nvidia and the GPU space. Nvidia and AMD—through its ATI unit—are pushing the use of GPUs in general-purpose computing environments. Intel and AMD also have been working to bring greater graphics capabilities to their CPUs.

Intel officials have fired back at the commission’s suit, saying the agency had no understanding of the processor and graphics businesses, that remedies being sought by the FTC would hobble Intel’s ability to compete and that the lawsuit goes far beyond established antitrust law.

The agency expects the case, filed under the FTC Act, to be heard by an administrative judge in September. Intel can appeal any ruling to the federal Court of Appeals.