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FTC accuses Intel of numerous violations, including writing software to sabotage its competitors' hardware

Intel holds a dominant position in the computer industry, with over 79.1 percent market share in the microprocessor market, according to iSuppli reports from the summer (these reports included by x86 architecture microprocessors as well as alternatives like ARM).  In May 2009 the European Union's antitrust regulators fined the chipmaker $1.45B USD -- about a fourth of the company's 2008 net income ($5.292B USD) -- for allegedly using discounts and OEM payoffs to push its smaller competitor Advanced Micro Devices out of the market.  That ruling is currently being appealed.

In the U.S. the Federal Trade Commission has investigated similar claims.  The State of New York has filed suit against the Santa Clara, Calif.-based company for antitrust violations, but thus far no federal litigation had been filed.  That all changed today with the FTC suing Intel, citing numerous antitrust violations.

The landmark case comes on the heels of Intel's $1.25B USD settlement with AMD over similar claims.  Under that agreement AMD agreed to drop all pending and present litigation against its rival.  According to the FTC's lawsuit filing, Intel is depriving customers of free choice and is stifling the progress of the computer industry.  The filing says that Intel employed a carrot-and-stick sort of approach, using both threats and rewards to keep OEMs from using its competitors' products.  Reportedly Intel used such targets on Dell Inc., Hewlett-Packard Co., and IBM Corp.

One of the more interesting aspects of the case is that the FTC claims to have evidence that Intel wrote compiler software (Intel makes one of the more commonly used commercial C++ code compilers, the Intel C++ Compiler) to sabotage the performance of its competitors' CPUs.  Little is known about this allegation at this point.

Richard Feinstein, director of the FTC's Bureau of Competition, says Intel's violations are blatant and alarming.  He states, "Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly.  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 FTC case looks to prevent Intel from employing "threats, bundled prices, or other offers to encourage exclusive deals, hamper competition, or unfairly manipulate the prices of its" CPUs.

Intel was recently fined $25M USD by the South Korean government for antitrust violations.  The FTC's investigation of Intel was first announced officially in June 2008.  Under the more pro-antitrust Obama administration the investigation has pushed ahead aggressively and now looks to place new fines or restrictions on the chipmaker.

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Wait a sec...
By zsdersw on 12/16/2009 12:00:46 PM , Rating: 0
Intel wrote drivers to affect competitors' CPU performance? That's not really possible. There's nothing Intel could write a driver for in an AMD computer.

RE: Wait a sec...
By dagamer34 on 12/16/2009 12:05:10 PM , Rating: 2
It should be compiler, not driver, in the article. And yes, that would affect performance since it's autogenerated.

RE: Wait a sec...
By zsdersw on 12/16/2009 12:11:55 PM , Rating: 2
A compiler, yes, that makes sense.

RE: Wait a sec...
By dsx724 on 12/16/2009 12:15:37 PM , Rating: 5
Intel writes a compiler suite for C++ and Fortran that disables all optimizations on AMD's CPUs even if they comply with Intel's vector extensions. So if someone uses Intel's compilers to optimize performance, it slows down the program on AMD's CPUs since the software does a GenuineIntel check and runs the slow code if it fails. That was what that entire program was about, locking competitors out of the market by slowing down the programs that people use if the processor is not from Intel.

That said, the reason antitrust is brought in is because Intel's Compiler is by far the easiest way to vectorize and parallelize x86 code. Only recently did Intel add support for allowing vector instructions to be use on rival CPUs and even still it requires the developer to explicitly check a box or use a special flag instead of automatically supporting it on all processors based on CPU Flags.

RE: Wait a sec...
By check on 12/16/09, Rating: -1
RE: Wait a sec...
By Spivonious on 12/16/2009 12:34:45 PM , Rating: 5
No, it would be like you buying a Ford and only getting the full engine if you used gasoline from Ford gas stations. If you filled up at Mobil, your engine disables 2 cylinders.

RE: Wait a sec...
By SPOOFE on 12/16/09, Rating: -1
RE: Wait a sec...
By Spivonious on 12/16/2009 4:52:40 PM , Rating: 2
No. Intel purposefully disabled functions that both AMD and Intel processors shared. Your analogy doesn't work.

RE: Wait a sec...
By ClownPuncher on 12/16/2009 12:38:01 PM , Rating: 2
Read it again...slowly this time.

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