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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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RE: Correction
By spread on 12/16/2009 12:16:46 PM , Rating: 0
Stop watching Fox News. This investigation has been going on for YEARS. Way before the Obama administration even existed.

Punishing Intel for dirty tactics is very pro-business. It promotes a competitive environment where other businesses can exist without fear of being crushed by Intel's monopoly.

That is Pro-Business.

I am a Business Finance major in College and like to read up on Economics because its so damn interesting. But I'm sure you know more because you watch Fox News daily. /sarcasm

RE: Correction
By MrBlastman on 12/16/2009 12:40:46 PM , Rating: 1
I didn't start the fire, you just asked me to fuel it...

I am a Business Finance major in College

Get your behind out of the halls of academia and take off your funky glasses and try earning a living every day of the week before you start bashing Fox News and making them out to be worse than any of the other networks out there. Truth: They aren't, they're all crummy and at least Fox balances out the rest of the leftist-extremist stations.

Get a clue.

The world actually turns outside of college but since you are busy majoring in university you obviously have not been met with the challenge of feeding your family and worrying about where your next paycheck is coming from.

Where on earth did his post mention Fox News? It didn't. You DID. Stop believing everything you read or hear in your fantasy world and try the real world on for size for a change.

RE: Correction
By oxymojoe on 12/16/2009 1:12:23 PM , Rating: 3
What channel do you turn on if your "conservative" or just sick of mega distortions? On every Fox show they have at least one Democrat throwing out their POV. Why is Fox No.1 in cable news? They blow CNN, CNBC, and MSNBC ratings out of the water. Its probably because what is being said resonates and has truth to it. Some spin, but still the 411 on what's really going on.

If Glenn Beck, Rush Limbaugh, and Bill O'Rilley are just spewing "hate speech", then what is Rachel Maddow, Cris Matthews, and Keith Olbermann doing?

Oh that's right, they are hard hitting journalists...leg tingle and all.

RE: Correction
By kaoken on 12/16/2009 3:35:11 PM , Rating: 2
"Why is Fox No.1 in cable news? They blow CNN, CNBC, and MSNBC ratings out of the water."

Because fox news are comprised of trolls like Glen Beck and Rush Limp. Watch some daily show.

RE: Correction
By knutjb on 12/16/2009 4:48:18 PM , Rating: 2
Never thought of Glen Beck and Rush Limbaugh as trolls. Maybe you need to come up for air.

What daily show do you suggest?

BTW this case has nothing to do with Obama or Bush. This is a very complex case of Intel trying to stretch the laws but crossing the line into criminal activities.

RE: Correction
By jconan on 12/16/2009 10:03:03 PM , Rating: 2
America lacks a technocratic party. There should be a new party for tech enthusiast that bulldozes away the liberal and conservative issues for technological issues. Bill Gates or Steve Jobs???

RE: Correction
By spread on 12/16/2009 3:27:46 PM , Rating: 1
What makes you think I'm not earning a living to pay for my studies? I wasn't born with a silver spoon in my mouth like a yuppie.

So I guess that makes me qualified to discuss macro-economics with you now. Tell me more about these anti-business tactics that the Obama administration instigated years ago. Before they existed. I'm waiting patiently.

RE: Correction
By MrBlastman on 12/16/2009 4:47:25 PM , Rating: 1
Paying for studies and feeding a family are two completely different things. The level of stress is a million times greater. College is fantasy land and no amount of macro-economics book-background from school will compare to a few years of real world experience once you graduate. ;)

Trust me, I've been there.

RE: Correction
By knutjb on 12/16/2009 4:55:00 PM , Rating: 2
Agree, that little piece of very expensive paper is treated as more important than real experience. I am feeding a family while working to get that little piece of paper. Most of what I hear isn't from the real world and I have to work hard to tell them what they want to hear not what my experience knows to be correct. I hope the pendulum swings back soon.

RE: Correction
By MrBlastman on 12/16/2009 5:16:03 PM , Rating: 2
The little piece of paper opens doors for sure.

I wouldn't have had the opportunites I have without it. But, it stopped there. Everything since that sheet of paper has built upon what I learned and then far more than that. I suppose I was fortunate in that my professors back in the day all were required to have had successful careers outside of college prior to being hired to teach, as unfortunately most of the time you run into professors who could not make it outside of academia so they were forced to teach based on books rather than experiences.

I have no point to add to this argument other than that. :)

I'm happy Intel has been smitten by the government finally--if indeed they _were_ forcing their compilers to screw over non-intel processors with crummy optimizations, that is quite rotten and they should face some judicial scrutiny for it. However, those developers who were not trying to optimize their code further by using multiple compilers are also partially to blame.

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer

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