Intel Banned From Anticompetitive Practices

[Victus]

In summation, Intel is getting sued for paying off OEMs to use their products instead of AMD.

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.

[Maverix26]

Pity comment

Cool story bro!

[Brother_Shrike]

This is kind of old news

[Victus]

I just found out today, so it’s new to me.

[Mango_Assassin]

And me, i get caught up with my life.

Well. i dont really know what to say.

[mankyman6]

Wry Intel?! WWWWRRRRRRRRRRRRRYYYYYYYYYYYYYYYYYYYYYYY

[Fnoigy]

Wait, isn’t this called “making a business deal”?

[Zageron]

This is when nVidia starts making a processor chip.

EVGA/nVidia anyone?

I would actually be really stoked if this happened.

[chillbilly]

I caint hardly believe this socialism, wake up America!! This aint Reagan, this aint George Washington trying to get the Guv’mint to run Intel, its socialism. Why do yall think our economy sucks? Because the Guv’mint aint never done nothing right. Let the Free Market handle “anticompetative practices” any day

[taxi_evil]

Before anyone starts feeling too sorry for Intel, who probably still sleep on a massive pile of cash and women at night, this is much better for us, the consumers

If Intel pay a company to take their chip, then that’s what they’ll do, regardless of how good any rival chip is. Now, Intel will have to work to make sure they’re actually better than the competition if they want to receive the same levels of business

Monopolies hurt consumers more than anyone

[gugamilare]

@Fnoigy

Wait, isn’t this called “making a business deal”?

offering discounts for bigger requests = business deal
offering discounts for not buying your competitor’s product = anticompetitive practice

[saivert]

@chillbilly

I caint hardly believe this socialism, wake up America!! This aint Reagan, this aint George Washington trying to get the Guv’mint to run Intel, its socialism. Why do yall think our economy sucks? Because the Guv’mint aint never done nothing right. Let the Free Market handle “anticompetative practices” any day

haha yeah because free market has always handled this so well. you know that the “free market” consist of dumb consumers right?

and yes I get that you are just joking around. but just had to take this a bit serious.

[Dr_Perky]

@chillbilly

I caint hardly believe this socialism, wake up America!! This aint Reagan, this aint George Washington trying to get the Guv’mint to run Intel, its socialism. Why do yall think our economy sucks? Because the Guv’mint aint never done nothing right. Let the Free Market handle “anticompetative practices” any day

Even if you are joking taht made no sense.
The European Union sued them did you even read the article.

[Mango_Assassin]

@Zageron

This is when nVidia starts making a processor chip.

EVGA/nVidia anyone?

I would actually be really stoked if this happened.

Yes and no, it ll have the same respect as AMD in my eyes, and completely useless to most consumers, to us on the other hand, it is a specialist hobby, but to big companies etc, they wouldn’t make the buy.

I know they wouldn’t make you switch your mobo like every other year tho.