Many were baffled by Intel's August announcement that it was acquiring McAfee, the leading maker of antivirus software, for $7.68B USD.  While Intel touted the promise of "hardware security" options, many felt that the deal was like trying to cross a cactus with an apple tree -- they just didn't go together.

But for better or worse the deal has been officially approved by the U.S. Federal Trade Commission, the government agency tasked with monitoring the market and making sure mergers and acquisitions don't represent a threat to competition.

While the deal has earned the FTC's blessing, Intel is reportedly having a much harder time convincing the European Commission -- the antitrust arm of the European Union -- to approve it.  The EC -- which recently fined Intel $1.45B USD for antitrust violations -- is reportedly concerned that the deal would prevent McAfee's security rivals from fairly competing with it.

They say that if Intel packages security on-chip, it would be effectively guaranteeing that most computers offered a built in advantage to McAfee.  That would hurt companies like Symantec in seeking to sell customers rival antivirus suites.

The fear is perhaps justified, given Intel's tactics in the past.  Intel has been caught modifying its compilers and other software to sabotage the performance of rival hardware makers' products, such as AMD CPUs or NVIDIA GPUs.

Even if the Intel/McAfee union gets the green light, significant challenges remain.  While Intel has some experience embedding a typically software-driven technology on its CPUs, with its vPro virtualization platform, embedding anti-malware functionality may be tougher task.  

On the one hand, putting security scanning algorithms on-chip could greatly enhance their speed and remove the burden they typically put on the CPU cores.  However, getting updated malware signatures to the core, with which to detect suspicious files would be no easy task.  In the first half of 2010, alone McAfee logged 10 million new malware variants.

Another possibility is that Intel might monitor specific instruction sequences to the CPU for signs of misbehavior.  Again, this would be very tricky to pull off, though.

In the short term, whether the deal is approved or not McAfee will likely function primarily independent of Intel.  Intel has already promised to run McAfee as an independent company, initially headed by Chief Executive Officer Dave DeWalt.

Intel CEO Paul Otellini promises big things from that collaboration, stating, "Only the combination of hardware and software … can yield this kind of innovation, and that's the reason for buying McAfee."

But how or when those nebulous promises of "hardware security" are actualized is even more uncertain than the acquisition's pending approval with European regulators.