US Federal Trade Commission sues Intel

Just as the EU declared victory over Microsoft having secured the dubious benefit of a browser “choice screen” – I’m wondering if users will suspect malware when this thing appears – the FTC has stepped in with an anti-trust case of its own.

the FTC alleges that Intel has waged a systematic campaign to shut out rivals’ competing microchips by cutting off their access to the marketplace. In the process, Intel deprived consumers of choice and innovation in the microchips that comprise the computers’ central processing unit, or CPU.

The FTC’s main complaint is that Intel allegedly used:

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.

There is also a complaint about GPUs, though it’s not yet clear to me whether this is because the FTC considers that bundling a GPU with the motherboard or CPU sale is anti-competitive in itself, or some other issue.

The FTC also makes what to me is an intriguing complaint about Intel’s compiler:

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.

I am struggling a bit with this one. Is the FTC saying that Intel’s compiler has code in it that says in effect:

if (!IntelCompiler) { GoSlowly(); }

Or is the FTC merely saying that the Intel compiler optimises for Intel hardware – which is not a a secret; I’ve been told this by Intel on many occasions.

Clearly if customers were deceived by this in demonstrations the FTC has a point; but the kind of customer who is interested in CPU performance tests is likely to be familiar with the idea that compilers can optimise for specific hardware. It’s a good thing too; if I have Intel hardware I want a compiler that will optimise for features specific to that hardware.

Intel has issued the following statement:

“Intel has competed fairly and lawfully. Its actions have benefited 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.”

Intel senior vice president and general counsel Doug Melamed added, “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.”

“The FTC’s rush to file this case will cost taxpayers tens of millions of dollars to litigate issues that the FTC has not fully investigated. It is the normal practice of antitrust enforcement agencies to investigate the facts before filing suit. The Commission did not do that in this case,” said Melamed

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