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Breaking the Technology Bottleneck: The FTC’s Intel Case Is Critical to Innovation

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As the U.S. economy has begun to come out of its economic downturn, we have recognized the stiff price we pay for lax antitrust enforcement permitting industries to be dominated by a single or handful of firms. The penalties to economic growth from the lack of competition can be stiff: higher prices, less innovation, and fewer economic opportunities. As Harvard Professor Michael Porter has observed America’s economic engine rests on the fact that it has a steadfast "commitment to competition and free markets," and crucial to that commitment is a dedication to active antitrust enforcement. The Obama administration rightfully has sought to reinvigorate antitrust enforcement and it has begun with the crucial microprocessor market, challenging Intel’s exclusionary practices which have forced U.S. consumers to pay more for inferior products.

Last fall, Intel settled a case with its rival AMD, paying a staggering $1.25 billion to put an end to their antitrust showdown. The suit focused on Intel’s anticompetitive practices in the market for microprocessors, where Intel has prevented AMD’s innovative microprocessors from reaching more consumers, driving down prices, and offering speedier computers. Though the settlement did require some changes to Intel’s business practices, the case did not directly address the huge impact Intel’s practices had on consumers across the country, who were denied access to better and cheaper products. In December, the Federal Trade Commission stepped in and filed its own suit to take on Intel on consumers’ behalf.

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