The Federal Trade Commission (FTC) and Intel have agreed to settle allegations that the Santa Clara-based company engaged in anticompetitive behavior against its semiconductor rivals.
According to FTC Chairman Jon Leibowitz, the far-reaching settlement illustrates the Commission’s determination to challenge anticompetitive conduct by even the “most powerful companies” in the “fastest-moving” industries.
Indeed, under the above-mentioned terms, the chip giant will be prohibited from conditioning benefits in exchange for a pledge to exclusively purchase chips from Intel.
The settlement also bars the corporation from retaliating against computer manufacturers by withholding benefits if they conduct business with non-Intel suppliers.
“By accepting this settlement, we open the door to competition today and address Intel’s anticompetitive conduct in a way that may not have been available in a final judgment years from now,” an obviously pleased Leibowitz claimed in an official statement.
“Everyone, including Intel, gets a greater degree of certainty about the rules of the road going forward, which allows all the companies in this dynamic industry to move ahead and build better, more innovative products.”
However, Intel general counsel Doug Melamed emphasized that the settlement text had not conceded “any violation of law” or validated any of the alleged complaints.
“This agreement [simply] provides a framework that allows us to continue to compete and to provide our customers the best possible products at the best prices.
“The settlement enables us to put an end to the expense and distraction of the FTC litigation.”
Unsurprisingly, both Nvidia and AMD welcomed the comprehensive settlement – which is likely to increase competition in the global semiconductor marketplace.
“Nvidia supports the FTC’s action to address Intel’s continuing global anticompetitive conduct. Any steps that lead a more competitive environment for our industry are good for the consumer,” an Nvidia spokesperson told TG Daily.
“We look forward to Intel’s actions being examined further by the Delaware courts later this year, when our lawsuit against the company is heard.”
Harry Wolin, Sr. VP and General Counsel, AMD, expressed similar sentiments.
“The FTC has acted firmly in the interest of American consumers to safeguard the competitive process in the critically important microprocessor and graphics markets,” Wolin said in an e-mailed statement to TG Daily.
“In our [earlier] settlement with Intel, AMD’s critical remaining concern was Intel’s use of all-or-nothing discounts to deny competitors’ access to the marketplace.”
Wolin added that the FTC’s order “clearly and firmly” prohibited such abuse and guaranteed ongoing monitoring of Intel’s conduct.
“A level playing field is AMD’s goal, and we are confident that our world-class computing and graphics processors will deliver great value and benefit to consumers in a fair and open marketplace.”
Meanwhile, Wedbush Morgan analyst Patrick Wang told Market Watch the agreement was “more of a formality,” but also “indicated” some progress for Intel’s competitors.
“[Still], I [really] don’t see this settlement materially changing the competitive landscape.
“I would think that AMD and Nvidia would have wanted a little more arm-twisting. [But] I’m sure Intel is both relieved and happy to have come to these agreements – closing that ugly book on the FTC.”