Intel–McAfee Merger

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Counsel for Intel Corporation retained Cornerstone Research and Professor Timothy Bresnahan of Stanford University to analyze the economic issues raised by the Federal Trade Commission (FTC) and the European Commission in their investigations of the proposed Intel–McAfee merger.

Retained by Arnold & Porter and by Gibson, Dunn & Crutcher

Counsel for Intel Corporation retained Cornerstone Research and Professor Timothy Bresnahan of Stanford University to analyze the economic issues raised by the Federal Trade Commission (FTC) and the European Commission in their investigations of the proposed Intel–McAfee merger.

The FTC concluded that the merger raised no competitive concerns. The European Commission approved the merger at the end of its first-phase investigation.

Intel, the world’s leading microprocessor manufacturer, agreed to acquire McAfee, Inc., a leading security software company, for $7.7 billion in August 2010. While the merger of firms supplying complementary products typically raises few competition concerns, both agencies explored whether the merged firm would have an incentive to establish a commercial or technical tie between Intel’s microprocessors and McAfee’s security software that would harm competition in security software markets. Cornerstone Research and Professor Bresnahan presented analyses about theories regarding the competitive effects of the proposed merger to the staff at both agencies, showing that the merged firm would have a strong incentive to continue Intel’s practice of encouraging independent software vendors to develop software that relies on its microprocessors.

At the end of the initial request phase of its investigation, the FTC concluded that the merger raised no competitive concerns. The European Commission approved the merger at the end of its first-phase investigation, conditional on commitments made by Intel about its continued cooperation with competing security software firms.


For additional information about this case, please contact Andrea Shepard or Kostis Hatzitaskos.

Case Expert

Timothy F. Bresnahan

Landau Professor in Technology and the Economy, Emeritus,
Stanford University;
Senior Advisor, Cornerstone Research