FTC Files Suit Against Intel… Sucks To Be Them

So if the EU and the State of New York didn’t cause Intel’s legal department enough grief, the feds are going to. The Federal Trade Commission has filed suit against Intel claiming the following:

The FTC’s administrative complaint charges that Intel carried out its anticompetitive campaign 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 also used this practice, known as exclusive or restrictive dealing, to prevent computer makers from marketing any machines with non-Intel computer chips.

In addition, allegedly, Intel secretly redesigned key software, known as a compiler, in a way that deliberately stunted the performance of competitors’ CPU chips. Intel told its customers and the public that software performed better on Intel CPUs than on competitors’ CPUs, but the company deceived them by failing to disclose that these differences were due largely or entirely to Intel’s compiler design.

That’s gotta make Intel’s top brass nervous. The FTC wants to fix this by preventing Intel from using threats, bundled pricing, and other tactics to hamper competition or manipulate prices. Intel for its part had this to say:

“Intel has competed fairly and lawfully. Its actions have benefitted consumers. The highly competitive microprocessor industry, of which Intel is a key part, has kept innovation robust and prices declining at a faster rate than any other industry. The FTC’s case is misguided. It is based largely on claims that the FTC added at the last minute and has not investigated. In addition, it is explicitly not based on existing law but is instead intended to make new rules for regulating business conduct. These new rules would harm consumers by reducing innovation and raising prices.”

As usual, the lawyers will fight this out in court and and they’ll collect big cheques. We’ll see what the FTC, Intel, and the consumers get at the end of this.

Leave a Reply

%d bloggers like this: