Privacy Group Wants FTC To Investigate Intel

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January 29, 1999 (4:05 PM EST)

Privacy Group Wants FTC To Investigate Intel

By Mary Mosquera,

The Electronic Privacy Information Center said Friday that it will file a petition with the Federal Trade Commission requesting the agency investigate Intel for consumer-privacy concerns raised by its next-generation chip.

Intel's new Pentium III chip contains a serial number that is accessible by browsers and other software when users visit a site. The new chips let consumers be followed as they click through the Internet, collecting data about them without their knowledge or consent, said David Banisar, policy director at the Electronic Privacy Information Center in Washington, D.C.

The privacy advocate is concerned that the technology will be used -- unknown to the consumer -- for marketing or law-enforcement purposes. The ID code reduces the privacy of consumers online, EPIC said, but Intel said the technology improves security of online transactions. The chip makers added that consumers have the choice to use it or not.

The battle over security vs. privacy heated up this week as privacy groups EPIC, JunkBusters, and Privacy International launched a boycott against the world's biggest chip maker. In response, Intel offered software that could deactivate the code and met with the activists in Washington, D.C.

The privacy group wants Intel to stop production of the chips with any unique code installed, thus jettisoning the technology.

"The software patch announced by Intel Monday was not sufficient to eliminate the privacy problems."
-- David Banisar
Electronic Privacy Information Center

Intel said it will not recall its Pentium III chips. "I think we're at a point where we'll have to agree to disagree," said Howard High, spokesman for the Santa Clara, Calif.-based Intel, which produces about 85 percent of all microprocessors.

"Having an organization make that decision for consumers -- I'm not ready to go along with that," High said.

FTC spokeswoman Victoria Streitfeld confirmed that the privacy group met with attorneys for the Bureau of Consumer Protection. "This underscores the need for privacy online for consumers," she said. The FTC has been pressing Internet groups to self-regulate what consumer data is collected and how it is used.

EPIC will file its petition to the FTC within a month, joined by other consumer groups, Banisar said. A few state attorneys general, which he would not name, have also expressed interest in joining the petition or instituting investigations in their state, Banisar said.

"The software patch announced by Intel Monday was not sufficient to eliminate the privacy problems," Banisar said. Intel is not requiring computer makers to load the control-utility software. And the software could be duped into reactivating the technology without the user's knowledge. The burden is still on the consumer to be aware of the technology, he said.

Intel is encouraging computer makers to install the control utility and an adjustment for the basic input-output system, which is more technical but closer to the hardware. "This is the best way to create a feature that adds value, but you allow the choice. Computer manufacturers are looking at providing choice for customers," said High. The control utility will also be available on a CD-ROM in the box, at retail stores, and on Intel's site.

When EPIC suggested Intel draw up a legal agreement with PC makers requiring that they provide the software fix, Banisar said, "Intel got very nervous." The FTC opens its antitrust trial against Intel on March 9.

The first wave of Pentium III chips have already been shipped to computer makers, such as Compaq and Dell, and are expected out later this quarter, High said.