The FTC filed suit against Intel over anticompetitive acts that regulators say not only were meant to stifle competition from AMD, but also are now being used against GPU maker Nvidia. The lawsuit comes a month after Intel settled with AMD for $1.25 billion, an agreement that some industry analysts felt would curtail the FTC's probe into Intel.
Intel's $1.25 billion settlement
last month with rival Advanced Micro Devices apparently has done little
to keep regulators from investigating the chip maker's business
The Federal Trade Commission announced Dec. 16 that it is suing
Intel for what regulators say is anticompetitive behavior that Intel
has been exhibiting for more than a decade, first against AMD and now
against graphics chip maker Nvidia.
The FTC is accusing Intel not only of using its stronghold on the
CPU market to coerce OEMs such as IBM, Hewlett-Packard and Dell into
limiting their use of AMD products, but also of secretly altering its
own technologies-such as compilers-to hinder the performance of
Intel officials could then tell customers that applications
performed better on Intel's technology than on AMD's without disclosing
that the difference in performance was due primarily to Intel's actions.
"Intel has engaged in a deliberate campaign to hamstring competitive
threats to its monopoly," Richard Feinstein, director of the FTC's
Bureau of Competition, said in a statement. "It's been running
roughshod over the principles of fair play and laws protecting
competition on the merits."
Many industry observers felt that the FTC would not continue its
pursuit of Intel after the chip maker's settlement with AMD, which not
only included the $1.25 billion payment but also an agreement not to
engage in particular anticompetitive behavior.
However, the FTC's complaint not only covers Intel's actions in relation to AMD, but also its behavior toward Nvidia
Intel is suing Nvidia over whether the GPU maker has the right to
develop chip sets for Intel processors based on the "Nehalem"
architecture. The two companies in 2004 signed an agreement allowing
Nvidia to make compatible chip sets for Intel processors. Intel
officials said the agreement didn't cover Nehalem or future
GPUs are growing in importance in general computing environments,
and Intel is working to bring greater graphics capabilities to its own
CPUs. AMD likewise is growing its graphics business, which it acquired
in 2006 with the $5.4 billion acquisition of ATI.
In its complaint, the FTC says that Intel is now engaging in
anticompetitive practices against Nvidia that are similar to what the
chip maker had engaged in against AMD. The result is that those
practices could enable Intel to extend its monopoly into the GPU
market, according to federal regulators.
Roger Kay, an analyst with Endpoint Technologies Associates, said
the Nvidia issue could have been enough to convince the FTC to continue
its probe even after Intel's settlement with AMD.
In addition, some could also see the settlement as just another way
of Intel using its money and power to thwart competitors, Kay said.
"One interpretation of the AMD settlement is that Intel is buying someone off to just shut them up," he said.
The FTC lawsuit adds to the legal woes facing Intel, which already
is appealing a $1.45 billion fine levied by the European Commission for
similar bad behavior in that region. In addition, the N.Y. Attorney
General's office is suing Intel for its behavior in bullying OEMs and
clamping down on competition from AMD.
A key difference with the FTC complaint is that it charges Intel
with violating the FTC Act, rather than antitrust laws. The FTC Act is
broader than antitrust laws, and can take into account unfair methods
of competition, deceptive acts and monopolistic behavior.