FTC Exempts Intel's Oak Trail Processor From Antitrust Agreement

The Federal Trade Commission (FTC) on Tuesday modified its recent antitrust agreement with Intel to exclude Intel's Atom processor for tablet PCs, code-named Oak Trail.

The FTC said Intel will not be required to maintain the PCI Express Bus on Oak Trail until 2013, though it will be required to do so on its other processors. Oak Trail, which is scheduled to begin shipping next year, was exempted from this requirement because the new Atom line was in development prior to the initial agreement.

The FTC filed an antitrust lawsuit against Intel in December, in which it accused the chipmaker of seeking to undermine sales of two of its competitors, AMD and Nvidia. The settlement nine months later called on Intel to stop paying PC makers for shunning competing products from rivals like AMD. The agreement was welcomed by many system builders who believe that such practices undermine competition.

"I don't know that it levels the playing field, it just gives validation to what many system builders have suspected for several years about some of Intel's pricing and the way that they conduct business." said Frank Pivonka, co-CEO of Assured Computing Technology, a Bedford, N.H.-based system builder.

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"We're an Intel partner as well as an AMD partner and we walk a line between the two depending on what they do," Pivonka said. "AMD doesn't have anything that is even comparable to the Atom, that's why we've had to standardize on that form factor."

Next: Intel Reacts The FTC's settlement with Intel, which is in effect for the next ten years, also gives the FTC the authority to keep Intel from engaging in any anti-competitive practices in the future. The FTC cannot fine companies for such practices unless they have specifically violated the terms of an FTC settlement.

"The settlement enables us to put an end to the expense and distraction of the FTC litigation," said Doug Melamed, Intel senior vice president and general counsel, in a statement.

Some of those saved resources could go right back toward preparing Oak Trail, the microprocessor Intel is developing for the booming tablet market. The chip reportedly features a 50 percent reduction in power consumption over Intel's traditional PC offerings, in addition to full high definition video viewing capability.

Michael Oh, founder of Boston, Mass.-based reseller Tech Superpowers, said the agreement is good for competition in general, but noted that Intel was not in a leading position with regard to Oak Trail as with the other chips that are covered by the anti-competitive ruling.

"There are overall competitive forces in play in the tablet space besides Intel," Oh said. "It's not like in the PC market, which they essentially own. With Oak Trail, they're coming behind others in the mobile space. In areas where they are not as heavily entrenched, I don't think that Intel can really play the same hard-nosed games it's played in that market."

Next: The Impact Of This Agreement

However, some system builders believe concerns over Intel's stance towards competition are unwarranted.

"I never really saw any behavior from Intel that justified the agreement in the first place," said Todd Swank, vice president of marketing at Burnsville, Minn.-based system builder Nor-Tech. "So much of it was speculation and accusation. I've dealt with Intel for 7 or 8 years and I can't say they've had any anti-competitive practices.

"It's just hard to imagine it having much of an effect on the channel," Swank said.