Federal Trade Commission Files Suit Against Intel For 'Anticompetitive Tactics'

[MacRumors]

The U.S. Federal Trade Commission (FTC) today announced that it has filed suit against Intel, claiming that the company has "illegally used its dominant market position for a decade to stifle competition and strengthen its monopoly." The complaint focuses not only on Intel's actions in the CPU market to shut out competitors such as AMD, but also on newer, similar actions in the graphics chip market.

The FTC's administrative complaint charges that Intel carried out its anticompetitive campaign using threats and rewards aimed at the world's largest computer manufacturers, including Dell, Hewlett-Packard, and IBM, to coerce them not to buy rival computer CPU chips. Intel also used this practice, known as exclusive or restrictive dealing, 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. 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.

The FTC is seeking a variety of remedies in the lawsuit against Intel, including orders preventing the company from using threats, bundled pricing, and other tactics to hamper competition or manipulate prices.

The news comes as Intel prepares for a preview event tomorrow highlighting forthcoming Arrandale processors. Speculation as centered on Apple's possible use of these chips in the next generation of its notebook computers, although a recent report claimed that Apple has refused to accept Intel's standard Arrandale package incorporating the company's integrated graphics chipset.

Article Link: Federal Trade Commission Files Suit Against Intel For 'Anticompetitive Tactics'

 

[quagmire]

Does this include Intel's and NVIDIA's spat over Intel refusing to license Nehalem to NVIDIA so they can continue to make chipsets?

 

[nwcs]

I'm surprised it took this long. I thought if the Fed was going to pursue this they would have done it 10+ years ago. Their silence over the years has been implied acceptance of their practices.

 

[HLdan]

I have been wondering about this for a while now. Seems like Intel's on top of the world as I don't see any companies using the AMD processors in their consumer notebooks and desktops anymore. I certainly don't want Intel to become Microsoft whereas the majority uses Intel like they are forced to use Windows.

 

[topmounter]

You would think the FTC would have more pressing issues to deal with right now. But I guess everyone knows the Intel name and the Feds probably think this is a positive PR move from them right now.

 

[vjl323]

It's about time!

This should have happened years ago. As bad as Microsoft is [and IBM before them, if there's any old-timers here], Intel is worse. That's why the 2006 decision to go Intel was so disappointing to me - Intel makes Microsoft's aggressive business tactics look like Barbie.

I hope this suite has some teeth in it, and gets the job done. Intel has caused a lot of problems in this industry and it's about time they paid for their illegal ways.

/vjl/

 

[zombitronic]

In addition, allegedly, Intel secretly redesigned key software, known as a compiler, in a way that deliberately stunted the performance of competitors' CPU chips. 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.

Regarding this quote, if Intel's CPUs with Intel's chipsets work better in combination than competitors CPUs with Intel's chipsets, good. Shouldn't this be expected? If Intel has optimized their hardware to work better together, great.

If, with no extra engineering, competitors CPUs don't work as well with Intel chipsets, this is not anticompetitive. This is just a side effect of separate entities creating separate components of an entire system.

If there really is extra, unnecessary engineering put into the compiler to purposely hinder third party CPUs performance, this is anticompetitive. This is what needs to be proven.

 

[alexk82]

agreed

This should have happened years ago. As bad as Microsoft is [and IBM before them, if there's any old-timers here], Intel is worse. That's why the 2006 decision to go Intel was so disappointing to me - Intel makes Microsoft's aggressive business tactics look like Barbie.

I hope this suite has some teeth in it, and gets the job done. Intel has caused a lot of problems in this industry and it's about time they paid for their illegal ways.

/vjl/

amd has been suing intel for things like this for a while, so its a surprise to see how long it took

 

[jnhwells]

Bummer!

Wow! I thought after a certain amount of time you weren't allowed to sue!

 

[*LTD*]

Regarding this quote, if Intel's CPUs with Intel's chipsets work better in combination than competitors CPUs with Intel's chipsets, good. Shouldn't this be expected? If Intel has optimized their hardware to work better together, great.

If, with no extra engineering, competitors CPUs don't work as well with Intel chipsets, this is not anticompetitive. This is just a side effect of separate entities creating separate components of an entire system.

If there really is extra, unnecessary engineering put into the compiler to purposely hinder third party CPUs performance, this is anticompetitive. This is what needs to be proven.

This is the problem, not Intel's competence at making chipsets and hardware:

The FTC's administrative complaint charges that Intel carried out its anticompetitive campaign using threats and rewards aimed at the world's largest computer manufacturers, including Dell, Hewlett-Packard, and IBM, to coerce them not to buy rival computer CPU chips. Intel also used this practice, known as exclusive or restrictive dealing, 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. 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.

 

[Michael73]

My guess is that any financial penalties or remedies that Intel could be forced to pay will have ZERO impact for the average consumer at an Apple Store. If anything, the FTCs actions could help spur competition, lower prices and let Apple enjoy higher margins. I see the nicest rewards coming for Apple stock holders.

 

[SimonTheSoundMa]

What monopoly has Intel got?

I see AMD chips in computers as much as Intel ones.

 

[Hattig]

This will make NVIDIA happy.

Intel prices an Atom chip on its own at over $40.

Intel prices an Atom chip, with an Intel chipset, at $29.

This makes Atom + NVIDIA Ion systems considerably more expensive to build, and hence sell.

It's a clear case of Intel using its monopoly in CPUs to leverage its chipset, and in addition specifically exclude a valid competitor.

Intel's tactics a few years ago were terrible. It could come back to bite them.

 

[carmenodie]

Intel is the best and they are going to stay on top. This is how those corporate big boys do their thing. And it is disgusting. Now, someone mentioned AMD. Ok, AMD uses Intel's intellectual property but were told by intel not to compete with them in certain markets and at certain prices.
Look, intel is the goto chips maker on this planet. Have you ever read up on chip design and manufacturing? Man the amount of educated geeks and money needed to to pursue that game is in the billions!
Well, here we go again.Yall better drop their stock and quick.

 

[Hattig]

What monopoly has Intel got?

I see AMD chips in computers as much as Intel ones.

This suit goes back over a decade. Intel's behaviour in excluding AMD as an option with Dell, etc, by giving what could be found to be illegal anti-competitive rebates/backhanders/bundles/etc harmed AMD massively, restricting their ability to compete and invest in R&D.

Intel are playing a bit better these days, and AMD and Intel came to an agreement just last month, but with other complainants the FTC probably have a pretty good case.

 

[marco114]

god forbid

God forbid any company try to make a profit these days.

nobody forced you to use an Intel chip. AMD has great chips. Intel makes them better. AMD is cheaper. But Intel still has the best chips.

If you don't like Intel chips, don't buy them. You have a choice.

It baffles me that the government has to be involved in how companies run their business. They don't have a monopoly. If they do at all, it's because the Government promoted them into one.

 

[synth3tik]

America, it's capitalism, but if your good at what you do, we'll sue ya!

 

[ajbrehm]

God forbid any company try to make a profit these days.

nobody forced you to use an Intel chip. AMD has great chips. Intel makes them better. AMD is cheaper. But Intel still has the best chips.

If you don't like Intel chips, don't buy them. You have a choice.

Exactly.

Nothing worse than a bunch of Mac users complaining that people are "forced" to use Windows.

And it's the same with CPUs. There is of course AMD. And then nobody is forced to use x86 compatible CPUs either. There are SPARC CPUs (two vendors), ARM CPUs (lots of vendors), PowerPC (two vendors) and so on.

It baffles me that the government has to be involved in how companies run their business. They don't have a monopoly. If they do at all, it's because the Government promoted them into one.

Indeed. Government has certainly not tried to avoid buying computers with Intel chips. So why the surprise that Intel have the power?

 

[dagamer34]

This is the problem, not Intel's competence at making chipsets and hardware:

The FTC's administrative complaint charges that Intel carried out its anticompetitive campaign using threats and rewards aimed at the world's largest computer manufacturers, including Dell, Hewlett-Packard, and IBM, to coerce them not to buy rival computer CPU chips. Intel also used this practice, known as exclusive or restrictive dealing, 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. 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.

I think they are referring to the benchmarking fiasco a few years ago where when Via labeled it's CPU as an Intel chip, it's performance increased by quite a bit.

Here we go: http://arstechnica.com/hardware/reviews/2008/07/atom-nano-review.ars/6

Sounds pretty shady to me.

 

[Oob]

I'm confused, didn't AMD do the same thing a several years back when they partnered with computer manufacturers? I thought they disappeared from the market when the CoreDuos because they were the better performing processor.

Also:
"In addition, allegedly, Intel secretly redesigned key software, known as a compiler, in a way that deliberately stunted the performance of competitors' CPU chips. 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."

Er...could someone also clarify this a bit? Unless, everyone uses an intel compilers this doesn't make sense.

Isn't this a good thing that their chips work more efficiently with their own compilers (i.e. coding that efficiently maximizes the usage of the intel chipset). However, I guess it wouldn't be fair if intel was sabatoging the competition (i.e. if you are using our compiler, but not not an intel chip, do erroneous stuff). Seems kind of odd to me.

 

[Rocketman]

Docket No. 9341

In the Matter of Intel Corporation, a corporation.
File No.: 061 0247

http://www.ftc.gov/os/adjpro/d9341/091216intelcmpt.pdf

"COMPLAINT
Pursuant to Section 5 of the Federal Trade Commission Act, 15 U.S.C. ¤ 45 (“FTC Act”) and by virtue of the authority vested in it by said Act, the Federal Trade Commission (“Commission”), having reason to believe that Intel Corporation (“Intel”), a corporation, hereinafter sometimes referred to as “Respondent,” has engaged in a course of conduct that, considered individually or collectively, violates the provisions of said Act, and it appearing to the Commission that a proceeding in respect thereof would be in the public interest, hereby issues its Complaint stating its charges in that respect as follows:
The Federal Trade Commission Act
1.
The Federal Trade Commission Act “was designed to supplement and bolster the Sherman Act and the Clayton Act … to stop in their incipiency acts and practices which, when full blown, would violate those Acts … as well as to condemn as ‘unfair methods of competition’ existing violations” of those acts and practices.1 The Act gives the Commission a unique role in determining what constitutes unfair methods of competition. “[L]ike a court of equity, the Commission may consider public values beyond simply those enshrined in the letter or encompassed in the spirit of the antitrust laws.”2 Examples of conduct that fall within the scope of Section 5 include deceptive, collusive, coercive, predatory, unethical, or exclusionary conduct or any course of conduct that causes actual or incipient harm to competition."

 

[Eidorian]

I have been wondering about this for a while now. Seems like Intel's on top of the world as I don't see any companies using the AMD processors in their consumer notebooks and desktops anymore. I certainly don't want Intel to become Microsoft whereas the majority uses Intel like they are forced to use Windows.

Forced to use Windows?

I'm confused, didn't AMD do the same thing a several years back when they partnered with computer manufacturers? I thought they disappeared from the market when the CoreDuos because they were the better performing processor.

AMD is still around guys.

Their processors might not be on top like in the Athlon 64/X2 days but they do have a much better platform than what Intel offers. They're extremely competitive in the desktop market up until around $120 when compared to Intel.

Intel is king of the mobile space but AMD once again does offer a better overall platform model. (Turion II + M780G/M785G + Mobility HD 4000 and Neo)

The AMD 800 series for 2010 is much more well rounded when compared to P55/H55 or H57.

 

[krye]

You know, that's total BS. Sorry that AMD can't put out a chip that's worth a toss. How is that Intel's fault? What, do we file suit against Coke because Pepsi and RC can't hang?

It's called competition people, wake up. Maybe the fact that Intel is kicking AMDs ass should be enough to motivate them to bring on some new talent and start getting serious about chip design.

I think it sucks that every time a company does a great job of putting out a superior product, they're punished for it. What's the motivation to be a leader when you are punished for it? Maybe we should all come out with mediocre goods and services from now on and see how far we get.

 

[heisetax]

Intel is still the same.

This should have happened years ago. As bad as Microsoft is [and IBM before them, if there's any old-timers here], Intel is worse. That's why the 2006 decision to go Intel was so disappointing to me - Intel makes Microsoft's aggressive business tactics look like Barbie.

I hope this suite has some teeth in it, and gets the job done. Intel has caused a lot of problems in this industry and it's about time they paid for their illegal ways.

/vjl/

Intel has been a drag on computer systems since the days of the CP/M operating system. They are the primary reason that I went to a Mac in 1984. I went to stay away from Intel. Apple with their new Mac seemed to be the only none Intel cpu computer company that had the ability to stay in the market. The use of a Motorola cpu, not the Mac OS is what brought me to the Mac. I thought that the mouse was sissy stuff. Now in order to stay with the Mac I have to purchase an Intel processor. But now I like the OS more than my dislike of the Intel hardware.

 

[LethalWolfe]

It baffles me that the government has to be involved in how companies run their business.

It baffles me that people harken back to the days of price fixing, child labor, and workplace conditions that killed or maimed because employers were too cheap to take even basic safety measures (such as having fire exists). Oh, how lovely were the days of company towns, toxins freely peddled as cure-alls and working 80hrs a week for pennies a day...


Lethal