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FTC whacks Intel with anticompetition complaint

Claims Intel coerced vendors, rigged compilers

Internet Security Threat Report 2014

Updated The US Federal Trade Commission ruined Intel's Christmas by hitting the firm with wide ranging charges of anticompetitive business practices.

The Feds also charge that Intel rigged its compilers to put AMD at a disadvantage and that it is trying to smother its rivals in the graphics chip business.

Intel has rejected the charges as "misguided", "last minute" and not based on investigation by the FTC.

In its statement announcing its complaint, the FTC claims Intel "has illegally used its dominant market position for a decade to stifle competition and strengthen its monopoly."

Intel is accused of locking AMD out of key vendors by using "threats and rewards... to coerce them not to buy rival computer CPU chips."

It adds, "Intel also used this practice, known as exclusive or restrictive dealing, to prevent computer makers from marketing any machines with non-Intel computer chips."

These charges have already been played out in the EU's long-running investigation into Intel, which saw the chip firm stuck with a $1bn fine.

But the FTC stirs things up by alleging that "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," the FTC continues, "but the company deceived them by failing to disclose that these differences were due largely or entirely to Intel’s compiler design."

And to bring its case right up to date, the Feds charge that after using the above practices to lock AMD out of the market until it could catch up, Intel now finds itself falling behind in the graphics market.

"These products have lessened the need for CPUs, and therefore pose a threat to Intel’s monopoly power," the Feds say.

"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.

The FTC's charges come hard on the heels of New York Attorney General Andrew Cuomo's November law suit accusing Intel of "an illegal campaign to deprive AMD of distribution channels."

Intel described the FTC's case as "misguided" and "based largely on claims that the FTC added at the last minute and has not investigated."

The chip makers said the complaint was "explicitly not based on existing law but is instead intended to make new rules for regulating business conduct."

According to Intel, "These new rules would harm consumers by reducing innovation and raising prices."

Intel and the FTC had been in settlement talks, the firm added, but these "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."

At least Intel will only be fighting on one front this time. It struck a settlement with AMD to bring the EU's rather similar probe into its business practices to an end last month. However, it remains to be seen whether the FTC's compiler and GPU charges spark new probes on the other side of Atlantic. ®

This story was updated after its original posting to include information from Intel's comments on the FTC's allegations

Internet Security Threat Report 2014

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