FTC Modifies Intel Antitrust Settlement

The FTC has modified the agreement it reached with Intel that settled antitrust complaints against the chip maker. The modification removes an interface requirement from Intel's "Oak Trail" Atom platform.

Intel's legal dispute with the Federal Trade Commission appears to be wrapping up, after the agency announced Nov. 2 that it had modified the initial agreement reached with the giant chip maker in August to settle antitrust allegations.

According to the FTC, the agreement was amended to allow Intel to ship its upcoming "Oak Trail" Atom platform without the required PCI Express interface because Intel began manufacturing it before the two sides reached the settlement Aug. 4. The FTC's modification will allow Intel to ship the Oak Trail chip until June 2013, but all future generations of the chip after that date must come with the PCIe interface.

In December 2009, the FTC filed suit against Intel, alleging that the chip maker abused its market dominance to illegally quash competition from the likes of Advanced Micro Devices, Via Technologies and Nvidia by offering system makers special discounts and rebates in return for limiting their use of products from those other companies, or by threatening retribution.

The FTC also said Intel altered some of its technologies, such as compilers, so that they would hinder the performance of AMD products, and then laid the blame for the poor performance on AMD's technology.

The accusations echoed similar claims made against Intel, not only by rivals like AMD and Nvidia, but also by other regulators, including the European Commission and the N.Y. Attorney General's Office. Intel executives have steadfastly denied that their business practices-while aggressive-violated antitrust laws.

Intel last year settled its long-running legal dispute with AMD, and currently is appealing a $1.45 billion fine levied by the EC. The chip maker reached a settlement with the FTC in August that outlined what Intel could and could not do in regard to its competitive business practices.

One of those provisions was the inclusion of the PCIe interface in the Intel chips for at least six years to ensure that they could not limit the performance of graphics chips, and to let Nvidia, AMD and others more fairly compete against Intel.

The FTC's modification excludes the Oak Trail Atom platform from that requirement. Oak Trail, designed for such form factors as tablet PCs and thin notebooks, will start appearing in systems in 2011.

The FTC also said that it rejected the arguments from some parties, including Via and chip designer ARM, that the agreement reached with Intel was not punitive enough on the giant chip maker. Via sought some changes in the original agreement, and ARM-which is coming into closer competition with Intel, as Intel is looking to muscle into the mobile handset market that is dominated by ARM-designed processors-asked the FTC to extend the order against Intel beyond the x86 market. The FTC rejected the suggestions from both vendors.

The FTC's suit against Intel refueled debate over the federal government's more aggressive stance in antitrust cases, particularly in the high-tech industry. Regulators not only are looking at Intel, but also other major tech players, including IBM. Some see the government's actions as necessary to level the playing field and to stop actions that they say ultimately are harming consumers. However, others see the regulators at creating an anti-business atmosphere in the United States.