U.S. FTC Slams Intel With Antitrust Suit
December 16, 2009 11:40 AM
comment(s) - last by
FTC accuses Intel of numerous violations, including writing software to sabotage its competitors' hardware
Intel holds a
in the computer industry, with over 79.1 percent market share in the microprocessor market, according to
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
In the U.S. the Federal Trade Commission has investigated similar claims. The State of New York has
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
, 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: Wait a sec...
12/16/2009 12:34:45 PM
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...
12/16/2009 3:31:48 PM
Or like an early Electric Car that could only be powered up at highly specialized and very rare power stations in order to be used? Happened. Providing a product is in no way a guarantee of a proper infrastructure in which one can extract full use out of that product. Intel made an Intel compiler; there was no reason AMD couldn't make an AMD compiler. There are many lousy business practices that Intel engaged in, and they're mostly due to price collusion and such. But including relatively frivolous and vague accusations like this in the case only weakens the case as a whole; they should be selecting the strongest parts of the case to pursue, not throwing everything against the wall and seeing what sticks.
RE: Wait a sec...
12/16/2009 4:52:40 PM
No. Intel purposefully disabled functions that both AMD and Intel processors shared. Your analogy doesn't work.
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