Updated: FTC goes for Intel’s jugular

The Federal Trade Commission said today it has filed a lawsuit against Intel, demanding cash for ‘anticompetitive tactics’.

The chip behemoth has only just written out a check for $1.25 billion to AMD in settlement of its antitrust claims.

“Intel’s anticompetitive tactics were designed to put the brakes on superior competitive products that threatened its monopoly in the CPU microchip market,” said the FTC in a statement that seems to demonstrate a rather tenuous grasp on reality on its part.

UPDATE: The FTC also alleges that “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.” 

The Commission also said it was investigating Intel’s behavior in the graphics arena, leading some industry observers – including this reporter – to point an accusatory digit in the general direction of Nvidia as being the driving force behind the FTC’s action.

No doubt in a complete coincidence, Nvidia said it saw the FTC move as good news:

“We applaud today’s action by the US Federal Trade Commission,” said Nvidia spokesperson Hector Marinez. “We are particularly pleased to see scrutiny being placed on Intel’s behavior toward GPUs, which have become an increasingly important part of the PC industry.”

“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. “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 added that Intel ‘has taken the same monopolistic approach toward Nvidia in the graphics processing unit market’.

Intel stands accused under Section 5 of the FTC Act, which prohibits unfair methods of competition and deceptive acts and practices in commerce. The chip giant is also charged with illegal monopolization, attempted monopolization, and monopoly maintenance.

Intel spokesperson Chuck Mulloy took a deep breath and raised his eyes heavenward before saying his company is “currently evaluating the complaint.” 

The sooner Intel buys Nvidia and puts and end to all this unpleasantness, the better.

Update #2:
Intel has now issued the following official statement:

“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

Intel senior veep 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.”