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FTC Lets Intel buy hip Maker

January 13, 1998

WASHINGTON (AP) _ The government declined Tuesday to block Intel Corp. from buying a leading computer graphics-chip maker but said its investigation of the $420 million deal will continue.

In a statement, the Federal Trade Commission said it decided against seeking a preliminary injunction to block Intel’s purchase of Chips and Technologies Inc. of San Jose, Calif., a leading manufacturer of the graphics controllers that make it possible for computers to display images.

But the agency added: ``Because we have concerns about the impact of this transaction on competition in markets for certain computer components, we have chosen to continue the investigation into the lawfulness of the acquisition.″

Intel, based in Santa Clara, Calif., makes the microprocessors that run more than three-fourths of all personal computers.

A company spokesman had no immediate comment on the government’s decision.

The FTC, already investigating Intel for possible antitrust violations, launched a review of the proposed deal after some graphics-chip companies complained about Intel’s entry into the market.

Regulators were concerned that Intel’s purchase of Chips and Technologies would give it an unfair advantage that could allow it to incorporate graphics features into its main line of computer chips and propel Intel to a position of dominance in the market for graphics chips as well.

The agency last year opened a broad investigation into whether Intel had violated antitrust law by attempting to monopolize the computer-chip industry. A similar investigation four years ago resulted in no charges.

The commission voted 4-0 against seeking a preliminary injunction. One commissioner, Mary Azcuenaga, did not participate in the decision.

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