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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 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???

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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