Merry Christmas, Intel: FTC Hits Chip Maker With Antitrust Suit

The FTC had begun an investigation into Intel's business practices in June of 2008. The agency contends that the microprocessor company has engaged anticompetitive tactics over the last decade. Among those practices, according to the FTC, were using "threats and rewards aimed at the world's largest computer manufacturers, including Dell, Hewlett-Packard, and IBM, to coerce them not to buy rival computer CPU chips."

Intel could not be reached for comment.

According to the FTC's complaint, Intel also allegedly "secretly redesigned key software, known as a compiler, in a way that deliberately stunted the performance of competitors' CPU chips." As a result, Intel was able to boast that its CPUs performed better than competitors' products but failed to disclose that a key reason for the difference was due "largely or entirely to Intel's compiler design," according to the FTC.

While much of the FTC's complaint deals with Intel's practices in the CPU market with AMD, the agency also focuses on Intel's alleged practices against Nvidia in the GPU space. The FTC claims that Intel found itself falling behind the competition in the GPU space and embarked on a similar anticompetitive strategy used against AMD to smother GPU chips from competitors, namely, Nvidia. According to the complaint, there is "a dangerous probability that Intel's unfair methods of competition could allow it to extend its monopoly into the GPU chip markets."

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"Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly," said Richard Feinstein, director of the FTC's Bureau of Competition, in a statement. "It's been running roughshod over the principles of fair play and the laws protecting competition on the merits. The Commission's action today seeks to remedy the damage that Intel has done to competition, innovation, and, ultimately, the American consumer."

The FTC is seeking an order that would prevent 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. The complaint also states the FTC also may seek an order prohibiting Intel from unreasonably excluding or inhibiting the sale of competitive CPUs or GPUs, and prohibiting Intel from making or distributing products that impair the performance -- or apparent performance -- of non-Intel CPUs or GPUs.

Intel had sought to put much of its legal troubles behind it this year when it agreed to a historic, wide-ranging settlement with longtime competitor AMD. But Intel is still dealing with the fallout of its antitrust battle with the European Union, which fined Intel a record $1.45 billion, which it is appealing, as well as another antitrust lawsuit filed by New York State Attorney General Andrew Cuomo. So even with the AMD case behind it, the legal problems continue to mount for Intel.