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.”
I have to say, though, if another company were on top, they could have done similar. I’m not ready to believe the “virtuous” nature of the little guy. So, if the allegations are true, Intel is in the wrong; however, I’m not ready to say that if AMD had that share that they wouldn’t do the same thing.
Intel also paid computer manufacturers money not to use the AMD processor, very un-kosher
As to the compiling comment, that would make sense… If Intel’s competitors didn’t have licensed versions of Intel’s x86 instructions that they were legally able to use to make consumer products with, and cross-licensing agreements which should prohibit this kind of thing explicitly.
Intel makes some wonderful products. It would be nice if they competed on the strength of those products instead of by trying to bully everyone to get there way. Then again I’ve said the same thing about Microsoft.
If you believe in Capitalism and the strength of the marketplace, then you kind of have to thank the FTC. The point of markets is to allow evolution, where the stronger products edge out the weaker products on merit, instead of shady bulk pricing deals, exclusivity agreements, and back handed deals to make sure your products work better with a certain application maker’s code than anyone else’s despite the fact that you should all be using the same instruction sets. Now if the FTC would just apply this to OTHER markets we might see something unbelievable happen.
Amen! Finally someone is doing something about Intel and their BS. And not just some of it – pretty much all the crap the try to get away with is being taken care of. Now maybe Nvidia and AMD will have more of a chance in the market… I’ve always liked them better anyways. They don’t pull these kinds of tricks. Or if they do I never hear about it. Intel needs to play fair.
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