Hot on the heels of a $1.25 billion settlement with AMD over anti-competitive practices, Intel is facing another lawsuit. This time, it’s the Federal Trade Commission, which a suit today that aims to change the way Intel does business.
At issue are block pricing deals and other practices that the FTC says are anti-competitive. Intel is by far the leading chip-maker in the personal computer market. AMD runs a distant second, and the third place award goes to VIA, a company that has just 0.2% market share. According to the FTC, part of the reason for this is because of both threats and rewards directed at PC makers. For instance, special pricing might go to companies that only build systems with Intel chips.
According to the FTC, Intel targeted Dell, HP, IBM, and other leading PC makers.
The FTC case also makes the allegation that Intel worked in secret to redesign PC software “known as a compiler, in a way that deliberately stunted the performance of competitors’ CPU chips,” and then told customers that the software ran better on Intel CPUs while making no mention of the fact that it was designed that way.
The agency is also taking aim at Intel’s practices in the graphics processing field, where Intel is up against GPU maker NVIDIA. According to the FTC, Intel is misleading potential competitors “to protect its monopoly.”
The FTC isn’t asking for money, but it does want Intel to stop using “threats, bundled prices, or other offers to encourage elusive deals, hamper competition,” or manipulate the prices of CPUs and GPUs and to stop tweaking software so that it plays better with Intel chips than those of competitors. Of course, when you think about it, why wouldn’t a company design software so that it works best on its own chips? The problem is designing software that could just as easily work on competitors products and then crippling it so that it doesn’t.
Update: Intel has issued a response, claiming that the company has competed “fairly and lawfully” in a way that benefits consumers, and calls the FTC’s actions “misguided.”