INTEL: BIG BROTHERS ASSISTANT?

1/26/99 ---------------------------------------------------------- Is the logo "Intel Inside" really the "Mark of the Best?" ---------------------------------------------------------- Intel Agrees To Change Its Chips By TED BRIDIS Associated Press Writer (See Yahoo News Story) WASHINGTON (AP) - Intel Corp. (Nasdaq:INTC - news) bowed today to concerns by privacy groups upset over new technology that allows consumers to be identified as they move across the Internet. The company promised it will offer free software to allow customers to easily turn off the feature permanently on its upcoming line of Pentium III computer chips, to be sold within months. Intel also said it will turn off the feature by default for Pentium III chips that haven't already been produced and distributed to the world's computer makers. Consumers could then choose to activate the technology, which for security reasons would require restarting their computers, Intel spokesman Chuck Mulloy said. Intel, the world's largest chip-maker with $26.2 billion in sales last year, announced last week that its new chip will by default transmit its unique serial number internally and across the Internet to help verify the identity of users. Among other things, the feature offers a boon for electronic commerce, allowing companies and shoppers to feel more secure in the transmission of sensitive data. With existing Pentium III chips already in production, consumers can turn the feature off, but it turned itself back on each time the computer was restarted. Privacy groups that had launched a boycott of Intel products just four hours before the company's announcement today said they were ``delighted that Intel has taken one small step toward respecting people's privacy.'' But they said Intel's software concession still was inadequate. ``You still have the problem of an ID number, and Web sites can force people to disclose that ID number as a condition to get into the sites,'' complained David Banisar of the Washington-based Electronic Privacy Information Center. ``Just having a software patch does not resolve the underlying concerns.'' The privacy information center organized the boycott with Junkbusters Corp. of Green Brook, N.J., which lobbies on a range of high-tech issues. In addition to making about 85 percent of the world's computer processors, Intel also manufactures memory chips plus hardware for computer networks, communications and graphics. Jason Catlett, president of Junkbusters, called the Pentium III chips that already have been produced ``toxic hardware.'' ``They should destroy them,'' said Catlett, who spoke last year at a summit on Internet privacy in Washington organized by the Commerce Department. As part of their boycott, organizers unveiled a parody of the company's ubiquitous ``Intel Inside'' logo. Theirs features the same familiar swirl but with the words, ``Big Brother Inside.'' Rep. Edward J. Markey, D-Mass., urged Intel on Friday to reconsider its plans, ``to better balance both commercial and privacy objectives.'' Markey is the senior Democrat on the House Commerce consumer protection subcommittee and active in Internet privacy issues. Intel's plans came at an awkward time for the Clinton administration. David Aaron, undersecretary of state for commerce, was to begin negotiations today in Europe - the same day as the boycott announcement - over a tough new privacy law enacted by the 15-nation European Union last October. Aaron must assure Europeans that the United States has adequate privacy protections or risk a prohibition against businesses in those 15 countries from disclosing personal information about citizens there to U.S. companies. ``It couldn't have come at a worse time,'' Catlett said. ``This new feature from Intel is really throwing kerosene on the fire of the trans-Atlantic privacy negotiations.'' Aaron said last week that such a ban would carry ``a very adverse impact on the operation of the economies on both sides of the Atlantic and could be a very serious blow.'' The Electronic Privacy Information Center said it will meet later this week with the Federal Trade Commission to discuss Intel's plans. The FTC has criticized the online industry for its failure to protect privacy rights. Last year, the agency successfully pressed for a new law that prohibits Web sites from collecting personal information from children without parental permission. Coincidentally, the FTC also is suing Intel for alleged antitrust violations. The trial is set to begin March 9.