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The FTC has banned Intel from paying off OEMs to exclusively carry its products or to NOT carry AMD products.  (Source: The New York Times)
Settlement also establishes $10M USD fund that could help OEMs switch to AMD or NVIDIA

Intel, like Microsoft, built a seemingly ironclad lead through a combination of great products and aggressive business maneuvering.  Those maneuvers could be viewed as clever moves or destructive anticompetitive behavior -- it all depends on who you ask.  However, in recent years Intel, like Microsoft, has come under increasing pressure to stop its more "creative" business tactics.  Fined $1.45B USD by the European Union last year, Intel has just arrived at a settlement with the U.S. Federal Trade Commission over numerous antitrust issues.

While the settlement is less painful fiscally than the EU ruling, it will have a major impact on the way Intel conducts its business.  Intel is no longer allowed to pay off (either directly, or through unit discounts) OEMs to exclusively carry Intel CPUs or to not carry competitor Advanced Micro Devices' CPUs.  Likewise, it can no longer retaliate against OEMs who opt to offer competitive products.

Intel is also banned from specifically redesigning its chips to harm its competitors.  Specifically it will be forced to not limit the performance of rivals' GPU chips for at least the next six years.  Also, it must publish clearly that its compiler discriminates against non-Intel processors (such as AMD's designs), not fully utilizing their features and producing inferior code.

The settlement concludes a suit launched by the FTC in December following an investigation.  While it brings no major fines against Intel, it does require Intel to pay $10M USD to establish a fund to help business customers retool their software if they were misled by Intel to think the poor performance of Intel-compiled code on AMD chips was normal. 

Intel’s general counsel, A. Douglas Melamed comments, "[This settlement will] put an end to the expense and distraction of the FTC litigation.  This agreement provides a framework that will allow us to continue to compete and to provide our customers the best possible products at the best prices."

The settlement removes a critical piece of the remaining U.S. litigation on Intel's plate.  Previously, Intel had agreed to a $1.25B USD payout to settle a civil case with AMD last November.  The only major remaining legal action against it now is a lawsuit from the state of New York, alleging illegal anticompetitive behavior.

While the antitrust litigation of the turn of the millenia did not derail Microsoft or significantly alter its PC operating system market share, the latest round -- this time against Intel -- could have a more serious impact.  Unlike Microsoft, Intel has a very aggressive rival in its core business -- AMD.  Last year AMD's CPU shipments grew 17.7 percent on a year-to-year basis, giving it a 19.4 percent market share.  Intel, meanwhile, saw its lead shrink, posting an 80.5 percent market share.

From 2003 to 2006 AMD produced CPUs that were widely considered to outperform similarly priced Intel designs.  While other issues also hampered AMD, it alleges that it largely failed to gain market share during this era thanks to Intel's questionable business practices -- and legal settlements seem to back up this claim.

AMD seems revitalized once more, having taken the discrete graphics sales crown from NVIDIA, thanks to its head start with DirectX 11 GPUs.  If it can duplicate this success on the CPU market, this time it may finally be able to see its hard work pay off with increased OEM adoption -- now that Intel can no longer pay off OEMs not to use its products.  The ball is in AMD's court, as they say.

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RE: Interesting decision...
By JasonMick on 8/4/2010 2:04:48 PM , Rating: 3
The anticompetitive measures though... While they sound nice, enforcing them will be the burden of Intel's competitors to prove to the courts a violation has occured, I would imagine. If one does occur after the ruling, I'm sure the justice system will not be as lenient the next time they are in front of the judge.

I'm surprised at the small fine, very surprised.

Well Intel and AMD did already settle privately for $1.25B USD, so its not like Intel hasn't already paid a BIG fine, in effect. It's good to see the gov't let companies work out their problems for once and show a degree of restraint.

On the other hand the gov't appears to be taking a responsible approach to preserving competition here, disallowing blatant moves that limit competition -- essentially bribes or sabotage.

AMD better take advantage of the level playing field it's been handed, though.

RE: Interesting decision...
By MrBlastman on 8/4/2010 2:21:22 PM , Rating: 4
I've always had a problem with Intel paying off its distributors in "creative" ways to maintain exclusivity for only their line of products. This truly goes against the spirit of capitalism so I think the ruling is quite just in this respect. Beat the competition with a superior product and marketing and you don't need to arm-twist the people selling your goods.

At least, this is how it should be. AMD really dropped the ball back between 2003 and 2006 by not taking complete advantage of their performance lead. They had excellent processors in that timeframe. I was 100% AMD between 1997 and 2008 (though the K6-2's FPU _was_ a turd); when my X2 4400's motherboard died and the Core 2 duo's were beating the pants off AMD, I gave in and went the Intel route again. I suppose two dud AMD motherboards (okay, I really blame it on VIA) over that period of time had taken its toll.

I want them to come back oh so bad though, I really do. I would _love_ to see AMD take the performance crown again. They have their work cut out though, as Intel has been double-barreling their R&D after the early 2000's debacle, it only makes their job harder.

This time around, if AMD does succeed in getting the edge back, it could be a more level playing field on the OEM->Retailer channel, where, as we all know, the majority of the sales occur(to both the end-user and businesses).

RE: Interesting decision...
By Pirks on 8/4/2010 3:59:41 PM , Rating: 2
I'm not concerned about AMD, but nVidia is in a pretty bad shape and this "resolution" did nothing to allow nVidia to produce chipsets for newest Intel CPUs. Hence it's not a resolution at all, Intel will suffocate nVidia further because US Government just doesn't care. So sad :(

RE: Interesting decision...
By AntDX316 on 8/4/10, Rating: 0
RE: Interesting decision...
By AntDX316 on 8/4/2010 11:17:39 PM , Rating: 2
Though this can be actually good for the video card industry because ATI would have more money to make better video cards. Nvidia's flagship video card was released months after ATI's flagship and ATI's flagship still reigned supreme by a significant performance difference in real world apps. The more money they have to invest in their superior technology the good it is for the gaming world.

Intel already has a fast processor named the i7. It's i7 920 is as fast as 2 980X's clock for clock in games. In some games the 2 980X's showed slower frame rate in the same system configuration. Though overclocking with new i7 steppings with the same voltage turns out more mhz. A couple hundred more mhz for the i7 than couple more hundred mhz with a newer ATI video card in gaming is a huge difference. Say you overclock 200 more mhz on the i7 you get around 10 more FPS. You overclock 200mhz more on the ATI card you get 100 more FPS.

Kind of a good balance for product improvement funding. :)

By NullSubroutine on 8/4/2010 3:53:44 PM , Rating: 2
The sad thing about the 1.25billion was that Intel made far more than that WITH its anti-competitive business practices.

RE: Interesting decision...
By Reclaimer77 on 8/4/10, Rating: -1
RE: Interesting decision...
By sviola on 8/4/2010 5:48:51 PM , Rating: 4
Intel did nothing wrong.Seriously, the agreement between Dell and Intel happens all the time in the business world.

Really? I read that they did only give the discounts if Dell would not carry AMD processors at all.

Who's business is it if one company gives incentives and payments to another anyway? Why should one company be concerned about how "fair" it's being to it's competition?

Well, that is the role of the government. If they don't keep company in checks, things like the Netscape case happens. If Intel eliminated AMD from the market, they would have no need to improve their products and would be able to price their products at any price and consumers (businesses and home users) wouldn't have any option but to buy them. The entire society looses.

(We'd probably still be using Prescotts until now)

RE: Interesting decision...
By Reclaimer77 on 8/4/10, Rating: -1
RE: Interesting decision...
By Schrag4 on 8/5/2010 9:59:01 AM , Rating: 2
Intel is no longer allowed to pay off (either directly, or through unit discounts) OEMs to exclusively carry Intel CPUs or to not carry competitor Advanced Micro Devices' CPUs.

PC makers had full discretion about how to use the discounts. There was no strings attached to hurt or muscle out AMD.

Really? Well, then, the ruling won't change anything so Intel should have no reason to complain (except now they're out another $10MM, chump change).

RE: Interesting decision...
By dark matter on 8/8/2010 8:32:10 AM , Rating: 2
That is your opinion, and you're entitled to it.

However my opinion, that of the courts and the wider tech community think you're wrong.

RE: Interesting decision...
By INeedCache on 8/5/2010 4:23:05 PM , Rating: 1
The problem is, once you get to be a certain size, you have the money and resources to do things like Intel did. Hypocritical of Washington to get involved? If Intel kept this up and forced AMD under, resulting in much higher CPU prices, you would likely be one of the first to yell "Where was the governmnent? How could they let this happen?" Corruption rampant in the government? Sure. But it obviously is in the CPU industry, as well, with Intel leading the way. Wake up.

RE: Interesting decision...
By stimudent on 8/4/2010 5:49:09 PM , Rating: 2
To get Intel not to commit ethics violations as part of its regular business routine.. will be something like tying and alcoholic to a chair and putting a bottle of bourbon on a table in front of him.

RE: Interesting decision...
By hyvonen on 8/5/2010 11:42:30 PM , Rating: 2
Is AMD required to follow similar guidelines? I mean, it seems like the pendulum would swing a bit too much in the other direction if Intel is forced to provide small-form-factor systems with PCIe to benefit NVidia, and AMD is not...

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