Intel and FTC make antitrust compromise

Intel has not admitted liability in an FTC antitrust case, but has tentatively agreed to not modify its chip architecture to inhibit competing chips performance
Written by Jack Clark, Contributor

Intel and the Federal Trade Commission have tentatively settled a antitrust dispute over the chipmaker's business tactics, with Intel giving undertakings not to engage in the practices in the future.

The deal, announced on Wednesday, brings an end to a lawsuit filed by the FTC in December 2009, which alleged that Intel claimed better software performance on Intel CPUs than on competitors' CPUs, but failed to inform customers that Intel had designed its compilers to give Intel chips a performance benefit.

The FTC said in its suit that Intel had operated a "systematic campaign to shut out rivals" and competing microchips by cutting their access to the marketplace through anti-competitive means.

Intel does not admit that it violated US competition law, the company said on Wednesday. Nevertheless, it has conditionally agreed in future to not fix prices. It has also promised not to offer incentives to customers to exclusively use Intel products or to deny benefits to a customer if they use a competing product.

"This agreement provides a framework that will allow us to continue to compete and to provide our customers the best possible products at the best prices," said Intel general counsel Doug Melamed in a statement. "The settlement enables us to put an end to the expense and distraction of the FTC [Federal Trade Commission] litigation."

As part of the settlement, the FTC stipulated that Intel is prohibited from designing its chips to suppress the performance of competitors' offerings. The provisional agreement also frees up patent disclosure for the chipmaker's competitors AMD, Via and Nvidia, which are named in the agreement (PDF).

The document is tentative as it is subject to a 30-day public comment period, which gives interested parties a chance to give an opinion on the draft.

The FTC issued the complaint with the aim of ultimately prohibiting Intel from "using threats, bundled prices or other offers to encourage exclusive deals, hamper competition, or unfairly manipulate the prices of its CPU or GPU chips" and to stop Intel "making or distributing products that impair the performance — or apparent performance — of non-Intel CPUs or GPUs".

The FTC agreement did not include any details of a monetary fine against Intel. In November 2009, Intel settled an antitrust dispute with AMD in a deal that included a $1.25bn (£763m) payment to its rival and, in May 2009, the European Commission ordered Intel to pay a €1.06bn (£944m) fine over anti-competitive practices.

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