Settling With Intel

[Commentary] The Federal Trade Commission has an opportunity to reach a settlement in the litigation over Intel's dominance in the microchip industry, an important sector of the American economy.

It has until July 22 to do so. It is crucial that the agency get it right. Merely forcing Intel to stop behavior that has hindered competition in the industry will not do. The FTC must close off Intel's ability to leverage its near monopoly in CPU chips to foreclose competition in other fast-developing technologies. While the agency cannot foresee every tactic that might smother competition, its objective should be to lower the barriers to entry for new competitors. Such a deal, however, would probably require imposing structural changes, like forcing Intel to license the technology to its x86 chips -- the cornerstone of the computer architecture -- on reasonable terms so rivals can design processors that will operate smoothly on Intel's platform. Intel may resist, but there is no point reaching a settlement if it cannot protect future innovation. If the company will not agree to these changes, the FTC should not settle.