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Now US Government Goes After Intel

Gordon Kelly by

Now US Government Goes After Intel

Looks like the Intel AMD settlement was just the beginning...

Life for the Santa Clara based chip giant has today gotten much worse after the US Federal Trade Commission (FTC) announced it will be suing Intel for anti-competitive behaviour.

"The FTC alleges Intel has waged a systematic campaign to shut out rivals’ competing microchips by cutting off their access to the marketplace," said the Federal Trade Commission in a statement. "In the process, Intel deprived consumers of choice and innovation in the microchips that comprise the computers’ central processing unit."

“Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly,” claimed FTC Bureau of Competition director Richard A. Feinstein. "It’s been running roughshod over the principles of fair play and the laws protecting competition on the merits. The Commission’s action today seeks to remedy the damage that Intel has done to competition, innovation, and, ultimately, the American consumer."

The statement goes on to name Dell, Hewlett Packard and IBM amongst the companies Intel issued "threats and rewards... to prevent computer makers from marketing any machines with non-Intel computer chips".

"In addition, allegedly, Intel secretly redesigned key software, known as a compiler, in a way that deliberately stunted the performance of competitors’ CPU chips," continued the FTC. "Intel told its customers and the public that software performed better on Intel CPUs than on competitors’ CPUs, but the company deceived them by failing to disclose that these differences were due largely or entirely to Intel’s compiler design."

Yes, this is hugely weighty stuff and the FTC vote to approve the complaint was unanimous. Its aim?

"An order which includes provisions that would prevent Intel from using threats, bundled prices, or other offers to encourage exclusive deals, hamper competition, or unfairly manipulate the prices of its CPU or GPU chips. The FTC also may seek an order prohibiting Intel from unreasonably excluding or inhibiting the sale of competitive CPUs or GPUs, and prohibiting Intel from making or distributing products that impair the performance–or apparent performance–of non-Intel CPUs or GPUs."

In response Intel has denied these allegations and issued the following statement:

"Intel has competed fairly and lawfully. Its actions have benefitted consumers. The highly competitive microprocessor industry, of which Intel is a key part, has kept innovation robust and prices declining at a faster rate than any other industry. The FTC's case is misguided. It is based largely on claims that the FTC added at the last minute and has not investigated. In addition, it is explicitly not based on existing law but is instead intended to make new rules for regulating business conduct. These new rules would harm consumers by reducing innovation and raising prices."

Proceedings are likely to be drawn out and expensive, but the AMD verdict doesn't bode well for Intel. Ding, ding. Round one... (of many)


FTC Official Statement

Intel Official Response

Go to comments


December 17, 2009, 10:07 pm

wow, those are pretty big claims. ah well, only good can come of this *worldwide ban on intel GMA graphics accelerators*

Daniel Gerson

December 18, 2009, 4:00 pm

Honestly... stop complaining and use another compiler! GCC or let AMD bring out their own compiler enhanced to their own design. Just like the M$ case, the penalties M$ just passed on to the consumer, the huge legal assault is billed to the tax payer to the extent the penalties don't cover. And eventually M$ started slipping thanx to the market mechanism i.e. Google and to a lesser extent, open source (linux and firefox etc).

Nothing new here. These laws started against Alcoa http://www.clt.astate.edu/crbr...

When you read judge Hand's verdict, you see that politicians are playing to the 'unfairness' claims of the crowd... even though Alcoa became the dominant player by offering superior prices.

Thankfully, targeting the goliaths isn't going to bring down an industry (nor help or disadvantage the consumer really), it just supports unnecessary legal costs.

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