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Intel on FTC Deal: We Didn't Do Anything Wrong

By - Source: Tom's Hardware US | B 39 comments

The FTC paves the way for competition.

Intel  and the Federal Trade Commission (FTC) have reached a tentative settlement in the antitrust suit filed by the Commission December 16. The FTC sued Intel alleging Intel had violated Section 5 of the FTC Act, which relates to antitrust practices.

Under terms of the settlement, Intel is not allowed to offer incentives to other companies to only stock Intel chips. Furthermore, Intel may not retaliate if a PC builder chooses to use CPUs from AMD or other make.

Intel is also banned from offering unfair bundling discounts that would make using competing, non-Intel products more expensive. This would presumably restrict the practice of Intel bundling together a chipset with a CPU that otherwise would be prohibitive to purchase a single part on its own.

It's believed that Intel offered its Atom processor at a significant discount when purchased with an Intel chipset, making it difficult for OEMs to choose competing solutions, such as the Nvidia Ion, without incurring a considerable bump in costs.

Intel must also support the current PCI Express bus standard for another six years, keeping the graphics playing field open to other companies. This would stop Intel from ditching PCI Express, making the on-chip graphics of current Intel CPUs the only choice for video.

The FTC agreement also stops Intel from blocking competitive processor technology through software means, so that any change in software compiling for Intel's CPU would be disclosed and documented. The FTC alleged that Intel's compilers were designed to make AMD chips look bad. Intel also has to provide a $10 million fund for ISVs who wish to recompile their code for non-Intel processors.

Intel must also change its licensing terms to allow for companies who have agreements for Intel's technology to merge. Current licensees of Intel properties, such as AMD, Nvidia and Via would risk their agreements with Intel should two or more companies merge, but the new revisions would allow for licenses to carry on even after a merger. Via will also be getting its licensing deal for x86 processors extended to 2018.

What the settlement didn't appear to cover, however, is chipset licensing. This means that Intel is still the only producer of chipsets for the current generation of Nehalem-based processors, leaving Nvidia stuck at the Core 2 series.

FTC chairman Jon Leibowitz said it got 22 out of the 26 remedies it was seeking from Intel.

"We accepted this settlement because it helps consumers," Leibowitz explained. "Ensuring that this market remains competitive is essential to our future."

Even with this settlement, Intel feels that it has done nothing wrong.

"While Intel and the FTC have agreed to resolve that dispute, Intel is not admitting to any violation of the law nor does it agree with the allegations contained in the complaint," the company said in a statement.

Doug Melamed, Intel senior vice president and general counsel, added, "The settlement enables us to put an end to the expense and distraction of the FTC litigation."

Read the FTC settlement document here.

(Sources: Register, Electronista.)

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Top Comments
  • 24 Hide
    rohitbaran , August 4, 2010 7:11 PM
    Hah, since when does a corporation like Intel admits its mistakes? One has to have guts like Valve to do that.
  • 19 Hide
    hellwig , August 4, 2010 7:20 PM
    Give it a couple minutes, and Intel will find new ways to be anticompetitive.

    Seriously, if Intel spent as much effort on improving their product as they do trying to screw over their competitors, there'd be no need to screw over AMD and Nvidia. They got lazy, resting on their crappy P3/P4 architecture, and thats why AMD beat them (architecturally) between 2003-2006. Not because they weren't giving manufacturers enough "incentives". How about the fact that their on-chip graphics suck? Maybe in Larrabee were more than just a pipe dream, they could compete with Nvidia chipsets. No, instead they just lock Nvidia out of the chipset market, rather than improve their own offering. And dropping PCI-E to force out all graphics competitors, wow, that's a whole new level of corporate douchiness I hadn't even contemplated. What happens after 2016? We get Intel Express Bus, with heavy licensing fees?

    Oh, and crap, I blamed Marcus for this article by Tuan : http://www.tomshardware.com/news/amd-intel-cpu,7837.html. Sorry Marcus.
  • 15 Hide
    Jerky_san , August 4, 2010 7:03 PM
    It still doesn't change the fact that it was a slap on the wrist.. And the fact that they purposely slowed down AMD processors compared to their own only makes it worse.. Its the worst type of cheating since programmers and consumers rely on competition to keep the world going round.. I am wanting to use the new AMD magna cores for a VM system but there are still people in our IT department that go on the lines that Intel is better and always will be..
Other Comments
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  • 15 Hide
    Jerky_san , August 4, 2010 7:03 PM
    It still doesn't change the fact that it was a slap on the wrist.. And the fact that they purposely slowed down AMD processors compared to their own only makes it worse.. Its the worst type of cheating since programmers and consumers rely on competition to keep the world going round.. I am wanting to use the new AMD magna cores for a VM system but there are still people in our IT department that go on the lines that Intel is better and always will be..
  • 14 Hide
    accolite , August 4, 2010 7:05 PM
    Playing the I'm not guilty routine, but paying the fine or settlement means they are guilty...
  • 24 Hide
    rohitbaran , August 4, 2010 7:11 PM
    Hah, since when does a corporation like Intel admits its mistakes? One has to have guts like Valve to do that.
  • 8 Hide
    grieve , August 4, 2010 7:12 PM
    wow did'nt i read almost this exact line in a HP statement two articles ago?

    ""While Intel and the FTC have agreed to resolve that dispute, Intel is not admitting to any violation of the law nor does it agree with the allegations contained in the complaint," the company said in a statement."


    **cough**GUILTY**cough**
  • 5 Hide
    grieve , August 4, 2010 7:16 PM
    My mistake, the HP article was posted yesterday, i read it two articles ago...
    not that it matters, there both guilty.

  • 19 Hide
    hellwig , August 4, 2010 7:20 PM
    Give it a couple minutes, and Intel will find new ways to be anticompetitive.

    Seriously, if Intel spent as much effort on improving their product as they do trying to screw over their competitors, there'd be no need to screw over AMD and Nvidia. They got lazy, resting on their crappy P3/P4 architecture, and thats why AMD beat them (architecturally) between 2003-2006. Not because they weren't giving manufacturers enough "incentives". How about the fact that their on-chip graphics suck? Maybe in Larrabee were more than just a pipe dream, they could compete with Nvidia chipsets. No, instead they just lock Nvidia out of the chipset market, rather than improve their own offering. And dropping PCI-E to force out all graphics competitors, wow, that's a whole new level of corporate douchiness I hadn't even contemplated. What happens after 2016? We get Intel Express Bus, with heavy licensing fees?

    Oh, and crap, I blamed Marcus for this article by Tuan : http://www.tomshardware.com/news/amd-intel-cpu,7837.html. Sorry Marcus.
  • 12 Hide
    danhitchcock , August 4, 2010 7:41 PM
    hahah i love corporate drama. Nvidia competes with Ati, AMD competes with intel, nvidia hates intel, but nvidia can't be friends with AMD because AMD is ati....

    i'm not saying intel is guilty or not guilty of bad business practice, but maybe AMD could actually do there part and maybe advertise. they need to get there name out there
  • -3 Hide
    Poisoner , August 4, 2010 7:45 PM
    This sucks because we need nvidia chipsets
  • 7 Hide
    falchard , August 4, 2010 8:27 PM
    This may set bad precedence. Next up to bat, nVidia with its closed proprietary technology and .cg shader language that purposely makes competing hardware run bad while they bribe developers to use their technology.
  • 9 Hide
    TeraMedia , August 4, 2010 8:31 PM
    I don't see how Intel cannot be accused of monopolistic behavior w.r.t. their Nehalem chipsets. Refusing to license other companies to create Nehalem-compatible chipsets is certainly no better than embedding your browser in your O/S.

    Somehow, I'm not sure that Liebowitz understands the significance of that particular item.
  • 3 Hide
    wildwell , August 4, 2010 8:51 PM
    Hmm, I wonder how this may change the way technology companies do business with each other. Many of the incentives Intel is being fined for are common practices in the industry. Is Intel now going to blow the whistle and begin suing various tech companies throughout the United States?
  • 4 Hide
    sykozis , August 4, 2010 9:41 PM
    TeraMediaI don't see how Intel cannot be accused of monopolistic behavior w.r.t. their Nehalem chipsets. Refusing to license other companies to create Nehalem-compatible chipsets is certainly no better than embedding your browser in your O/S.Somehow, I'm not sure that Liebowitz understands the significance of that particular item.


    In that case...nVidia should be forced to ensure the same level of performance for PhysX regardless of the processor, whether it be an Intel processor, AMD processor, nVidia GPU or ATI GPU. nVidia purposely uses x87 instructions to prevent PhysX from performing at the same level on CPU's as it does on their GPU. If PhysX were properly coded using x86/SSE....Core i7 would have no trouble at all handling PhysX.
  • 2 Hide
    back_by_demand , August 4, 2010 9:45 PM
    danhitchcockhahah i love corporate drama. Nvidia competes with Ati, AMD competes with intel, nvidia hates intel, but nvidia can't be friends with AMD because AMD is ati....i'm not saying intel is guilty or not guilty of bad business practice, but maybe AMD could actually do there part and maybe advertise. they need to get there name out there

    Hahaha, yeah, watching this is like a cheesy soap opera like Dynasty. Intel is Alexis, ATI is Krystal - what we really need is for IBM to wade in like Moldavian terrorists and machine gun the lot of them.
  • 0 Hide
    mayne92 , August 4, 2010 11:17 PM
    otacon72...What does intel have to worry about...AMD has nothing that comes close to touching them.

    ...try to realize that there is life beyond the miniscule desktop enthusiast market to that of the IT world of servers...pfft
  • 5 Hide
    failboat , August 4, 2010 11:30 PM
    I'd like to see AMD step it up and take some market share. I almost got one of the netbooks with an AMD/ATI cpu/gpu. At the 330 price range there is some amd options with HDMI out. Intel HD is trash. Ion is fairly expensive.

  • 0 Hide
    thor220 , August 4, 2010 11:33 PM
    I would like to see Nvidia and AMD work together. This way they can work together to fight Intel and their poor buisness practices. Not like they have to merge or anything; it would just be better for the competition within the market.
  • 5 Hide
    spdlmt , August 5, 2010 12:54 AM
    Hp and Intel admits no wrong doing. Next, BP oil.
  • 5 Hide
    Azriel4444 , August 5, 2010 1:54 AM
    Best thing about this suit is it opens up more oems to AMD. By this time next year AMD will be hitting Intel hard. I'm not sure about forcing Pci Express on Intel though. If they want to hang themselves by not allowing other video solutions, let them. Theres a ton of companies that require workstation video cards to get their work done.
  • 0 Hide
    dEAne , August 5, 2010 2:44 AM
    Good for AMD.
  • 4 Hide
    Tamz_msc , August 5, 2010 4:53 AM
    Intel better support PCI-E for a loooong time to come or I'm off to AMD for the rest of my life.
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