FTC Sues Intel for Stifling Competition

In a new lawsuit filed on Wednesday, the Federal Trade Commission (FTC) is alleging that Santa Clara, Calif.-based chipmaker Intel has stifled competition in the microprocessor market."Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly," Richard A. Feinstein, director of the FTC's Bureau of Competition, said in a press release. "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."

From InformationWeek:

The FTC claimed Intel bullied computer manufacturers, including IBM, Hewlett-Packard, and Dell, into using its chips in their systems instead of offerings from rivals such as Advanced Micro Devices. It also claimed Intel used a tactic known as restrictive dealing to prevent system builders from marketing non-Intel machines.

The FTC's complaint further alleges that Intel redesigned its compiler software in a way that hampered the performance of competitors' microchips.

Intel denied the FTC claims, asserting that it has competed fairly and lawfully. In a statement, the company called the FTC's case misguided and suggested that it was based on claims that had not been fully investigated. Further, Intel said that the case was not based on existing law, but on the intention of creating new rules for regulating business conduct.

"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," Intel senior vice president and general counsel Doug Melamed said in an Intel press release.

Meanwhile, the FTC said it is looking to implement provisions that hinder Intel's ability to encourage exclusive deals and manipulate pricing, according to a commission press release.

From the FTC statement:

To remedy the anticompetitive damage alleged in the complaint, the FTC is seeking an order which includes provisions that would prevent Intel from using threats, bundled prices, or other offers to encourage exclusive deals, hamper competition, or unfairly manipulate the prices of its CPU or GPU chips. The FTC also may seek an order prohibiting Intel from unreasonably excluding or inhibiting the sale of competitive CPUs or GPUs, and prohibiting Intel from making or distributing products that impair the performance-or apparent performance-of non-Intel CPUs or GPUs.