Intel spanked by FTC

The US Federal Trade Commission said it has approved a settlement with Intel, the anti-competitive chip maker, that resolves charges the company illegally stifled competition for a decade.

Intel has agreed a number of restrictions on its activities, in return for remaining able to pretend it has done nothing wrong.

FTC chairman Jon Leibowitz reckons the settlement addresses "Intel’s anti-competitive conduct in a way that may not have been available in a final judgment years from now."

The settlement prohibits Intel from using threats, bundled prices, or other offers to exclude or hamper competition or otherwise unreasonably inhibit the sale of competitive CPUs or GPUs. The settlement also prohibits Intel from deceiving computer manufacturers about the performance of non-Intel CPUs or GPUs.

"Everyone," said Leibowitz, "including Intel, gets a greater degree of certainty about the rules of the road going forward, which allows all the companies in this dynamic industry to move ahead and build better, more innovative products."

The FTC sued Intel in December 2009 alleging that the company used anticompetitive tactics to cut off rivals’ access to the marketplace and deprive consumers of choice and innovation in CPUs. The action also challenged Intel’s conduct in markets for graphics processing units and other chips.

Now, Intel must stop leaning on its customers to get them to ignore x86 processors made by other companies.

Taiwanese x86 chip maker VIA is specifically mentioned in the settlement, as the FTC insists Intel should offer to extend Via’s x86 licensing agreement for five years beyond the current agreement, which expires in 2013.

The regulator also insists Intel modifies its intellectual property agreements with AMD, Nvidia, and Via so that they have more freedom to consider mergers or joint ventures with other companies, without the threat of being sued by Intel for patent infringement.

The settlement order also gives manufacturers of complementary products such as discrete GPUs assured access to Intel’s CPU architecture for the next six years, the FTC said.

And Intel has been told to maintain the PCI Express Bus interface for at least six years in a way that will not limit the performance of graphics processing chips.

Leibowitz claimed the case demonstrates that "the FTC is willing to challenge anti-competitive conduct by even the most powerful companies in the fastest-moving industries.”

A copy of the judgement, which is open for public debate until September 7, 2010, is in a pdf on Intel's site here.

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