As others have done in lawsuits against Intel, the FTC is claiming that anticompetitive behavior on the part of Intel over the past decade has unfairly limited the market for rival AMD's processors. However, the FTC also is saying those actions are now extending to Nvidia in the graphics chip market. Intel executives argue that the company is competing fiercely but fairly, and that conditions the FTC wants to impose would hurt Intel's ability to compete and innovate.
The Federal Trade Commission's lawsuit
has a familiar ring to it, echoing many of the charges of
anticompetitive behavior that can be found in similar complaints filed by
European regulators, U.S.
investigators and rivals of the chip making giant.
However, there are key elements that separate the FTC's Dec. 16 filing from
those other ones, such as expanding the focus beyond Intel's behavior in the
computer processor market to include the company's business practices in the
increasingly important graphics chip space.
Also, the FTC is not looking for monetary damages from Intel. Instead, it
has outlined a number of desired changes to Intel's business practices-ranging
from pricing to bundling of products to interoperability-that regulators say
are needed to ensure fair competition, but which Intel executives say will hurt
the company's own ability to compete.
Those key differences helped fuel the FTC's decision to go ahead with the
lawsuit despite Intel's
$1.25 billion settlement
with CPU rival Advanced Micro Devices in November,
and led to settlement negotiations between the FTC and Intel breaking off.
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In a conference call with reporters, Richard Feinstein, director of the
FTC's Bureau of Competition, said such steps are necessary to protect the
market and consumers from what he called Intel's exclusionary and damaging
behavior that he said has been going on for more than a decade, whenever Intel
However, Doug Melamed, senior vice president and general counsel for Intel,
called the FTC suit misguided, saying Intel has competed aggressively but
fairly and the conditions the agency wants to put on Intel would limit the chip
maker's ability to innovate and compete. Those conditions include making Intel
unable to offer volume discounts and bundle products, and forcing Intel to
license its intellectual property.
"We have been sued today for not agreeing to [conditions] that will be
bad for Intel, bad for the market and bad for consumers," Melamed said
during a conference call with reporters.
The FTC lawsuit was just the latest legal action to be taken against Intel
by a governmental agency. Intel already is appealing a $1.45 billion fine
levied by the European Commission earlier in 2009 involving antitrust issues in
the CPU space, and the N.Y. Attorney General's Office is pursuing similar
claims in that state.