Nvidia Triumphant Over FTC Lawsuit Against Intel

Nvidia appears to be taking the baton from Advanced Micro Devices in cheerleading government action taken against microprocessor giant Intel for alleged anti-competitive business behavior, with a Federal Trade Commission antitrust lawsuit filed Wednesday against Intel eliciting strong approval from Nvidia CEO Jen-Hsun Huang.

"We support today's action by the FTC, which has fully recognized Intel's behavior as an impediment to progress in the computer industry and to consumer choice," Huang said in a statement published Wednesday on Santa Clara, Calif.-based Nvidia's corporate blog.

"As the FTC states, when Intel fell behind in innovation within its core CPU market, it moved to smother competition in the GPU marketplace. This has curbed innovation and investment, and reduced consumer choice," Huang said.

Intel, also based in Santa Clara, faces a separate federal antitrust lawsuit filed in November by New York Attorney General Andrew Cuomo, and was fined $1.45 billion by European Union regulators in May for violating EU antitrust rules.

Those earlier complaints and rulings largely focused on Intel's alleged pressuring of computer manufacturers and retailers to exclude or severely limit their use of products sold by Intel's main CPU rival, AMD. But Intel and Sunnyvale, Calif.-based AMD reached a sweeping settlement of their longstanding legal disputes in November, with Intel paying AMD $1.25 billion and agreeing to curb certain as-yet-unspecified business practices.

Reacting to Wednesday's FTC filing, an AMD spokesperson allowed that it was "good news for consumers" -- a fairly bland statement from a company that led the charge on rhetorical bombast against Intel prior to November's historic settlement.

Nvidia, meanwhile, stated earlier this month that it was in talks with FTC officials about the Intel antitrust investigation. Nvidia's issues with Intel include a dispute over the graphics chip maker's license to build chipsets for Intel's next-generation, x86 central processors. Nvidia has also alleged that Intel unfairly priced a bundled package of its Atom processor and graphics platform for netbooks to squeeze Nvidia's competing Ion platform out of the market.

The FTC filing alleges that "Intel's unfair methods of competition could allow it to acquire a monopoly in the relevant GPU markets."

Roger Kay, principal analyst for Endpoint Technologies Associates, suggested that Intel take a page out of its recent playbook for AMD. "I would try to settle with Nvidia as fast as possible to remove as much wind from the FTC's sails as it can," Kay told MarketWatch .

Intel wasn't ready on Wednesday to announce such a deal -- though the chip giant's general counsel did refer to unspecified "settlement talks" in an Intel statement on the FTC case.

"This case could have, and should have, been settled. Settlement talks had progressed very far but 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," said Doug Melamed, Intel senior vice president and general counsel.

Intel called the FTC's case "misguided" and "based largely on claims that the FTC added at the last minute and has not investigated" -- the latter reference possibly pertaining to the Nvidia-focused portions of the complaint.

Another x86 chip maker claimed by the FTC to have been damaged by Intel's alleged business practices, VIA Technologies, said it had no comment on the matter Wednesday.

Intel's partners were also reluctant to say anything about the FTC case. Spokespeople for top OEMs like Hewlett-Packard and Acer subsidiary Gateway declined to comment when contacted by Channelweb.com.

But one of Intel's system integrator partners, John Convery of Redmond, Wash.-based Denali Advanced Integration, said his company had "always known Intel to compete fairly" in its years of partnering with the chip giant.

"I'm reminded years ago of the government spending years and millions to review IBM practices, and in the end, lots of time, legal fees and lost energy were spent with no results," Convery said of his expectations for the current case.

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