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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 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.

"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson

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