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Federal Trade Commission brings action against Intel

This is all over the place, so I won’t spend much time on it. There is an HPC angle this time, though, so I think its worth touching on.

Yesterday the US Federal Trade Commission (FTC) filed a complaint against Intel that charges Intel with abusing its market position to stifle competition.

Intel logoIn its complaint, the FTC alleges that Intel has waged a systematic campaign to shut out rivals’ competing microchips by cutting off their access to the marketplace. In the process, Intel deprived consumers of choice and innovation in the microchips that comprise the computers’ central processing unit, or CPU. These chips are critical components that often are referred to as the “brains” of a computer.

…The FTC’s administrative complaint charges that Intel carried out its anticompetitive campaign using threats and rewards aimed at the world’s largest computer manufacturers, including Dell, Hewlett-Packard, and IBM, to coerce them not to buy rival computer CPU chips. Intel also used this practice, known as exclusive or restrictive dealing, to prevent computer makers from marketing any machines with non-Intel computer chips.

None of that is much different from the complaints lodged by the EU and others recently against Intel. But there are two things that are different; first the charge that Intel purposefully crippled AMD chips for developers using Intel compilers

In addition, allegedly, Intel secretly redesigned key software, known as a compiler, in a way that deliberately stunted the performance of competitors’ CPU chips. Intel told its customers and the public that software performed better on Intel CPUs than on competitors’ CPUs, but the company deceived them by failing to disclose that these differences were due largely or entirely to Intel’s compiler design.

And then the new charges that Intel is trying to warp the GPU market as well

Intel has responded to this competitive challenge by embarking on a similar anticompetitive strategy, which aims to preserve its CPU monopoly by smothering potential competition from GPU chips such as those made by Nvidia, the FTC complaint charges. As part of this latest campaign, Intel misled and deceived potential competitors in order to protect its monopoly. The complaint alleges that there also is a dangerous probability that Intel’s unfair methods of competition could allow it to extend its monopoly into the GPU chip markets.

NVIDIA seems pretty happy about this; they proactively emailed me a reaction from CEO Jen-Hsun Huang

nVidia logo“We support today’s action by the FTC, which has fully recognized Intel’s behavior as an impediment to progress in the computer industry and to consumer choice.

As the FTC states, when Intel fell behind in innovation within its core CPU market, it moved to smother competition in the GPU marketplace. This has curbed innovation and investment, and reduced consumer choice.

The GPU is critical for common applications like graphics, video and photo processing. Today’s filing is sorely needed to stop Intel from using unlawful tactics to lock out the GPU and block consumers from its revolutionary benefits.”

We know from Intel’s reaction that they had been in negotiations with the FTC over the allegations for some time

Intel senior vice president and general counsel Doug Melamed added, “This case could have, and should have, been settled. Settlement talks had progressed very far but stalled when the FTC insisted on unprecedented remedies – including the restrictions on lawful price competition and enforcement of intellectual property rights set forth in the complaint — that would make it impossible for Intel to conduct business.”

Intel is also claiming that the FTC rushed to judgment on the GPU part of the complaint without doing diligence

“The FTC’s rush to file this case will cost taxpayers tens of millions of dollars to litigate issues that the FTC has not fully investigated. It is the normal practice of antitrust enforcement agencies to investigate the facts before filing suit. The Commission did not do that in this case,” said Melamed.

You have to wonder though, about the timeline here, and whether Intel’s cancellation of the first retail version of Larrabee (after demoing it just weeks before at SC09) was a hail Mary pass to try and get the FTC to stand down. Pure speculation on my part.

Comments

  1. Blatant political shakedown by Obama’s FTC. Nvidia and AMD are attempting to achieve a legal victory over Intel to overcome their marketplace defeats and their own incompetence.

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