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Intel Faces Antitrust Probe On Planned McAfee Acquisition

European Commission investigating whether proposed deal would box out competing antivirus products, reports the Wall Street Journal.
The European Commission, the European Union's antitrust regulator, is reportedly taking a close look at chipmaker Intel's plans to acquire antivirus vendor McAfee for $7.68 billion.

In addition, the EU regulator's concerns could now result in a lengthy period of scrutiny, reports the Wall Street Journal, citing unnamed sources.

The sticking point is apparently Intel's stated intention to include previously standalone security features in its microprocessors. "The EU appears concerned that if McAfee, by virtue of being owned by Intel, had privileged access to those features, it could be difficult for McAfee's rivals to compete," according to the Wall Street Journal.

Regulators have reportedly sent multiple questionnaires to Intel, asking whether McAfee's technology might have privileged access to better chip performance and a list of applications currently running on the computer, and whether Intel could trigger promotional pop-up advertisements aimed at cross-selling chip users into buying McAfee products.

On Thursday, McAfee released a statement, updating investors about the status of its planned acquisition by Intel. "All required pre-close regulatory filings around the world have been made and the matter is now under review in those respective jurisdictions," according to the statement. "We expect that the deal will close some time in the first half of 2011 but do not have any further details to share at this time." The statement notably made no reference to any regulator-related delays.

Currently, 80% of the world's PCs include Intel chips. But as the EU's caution suggests, Intel is treading in relatively untested waters by seeking to create "hardware-enhanced security" -- as one of its executives has put it -- through its planned acquisition of McAfee.

Furthermore, market watchers haven't been convinced that Intel's move to enhance PC security via its chipsets would improve on what's currently available -- especially since so much relating to PC security requires close ties into the operating system.

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