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In the long-running saga of Intel’s conflicts with various national trade commissions, 2009 was a lousy year for Intel. The European Commission fined Intel for nearly 1.5 billion USD, the US Federal Trade Commission sued Intel on anti-trust grounds, and Intel settled with AMD for another 1.25 billion USD. If nothing else it was an expensive year, and while Intel settling with AMD was a significant milestone for the company it was not the end of their troubles.

Now just shy of 9 months after the FTC’s lawsuit began, Intel’s conflicts are starting to come to an end. While the European Commission’s fine is still on appeal, Intel can close the book on their troubles with the FTC: Intel and the FTC have reached a settlement ahead of what would have been next month’s court hearing. With this settlement the FTC is agreeing to drop the case in return for a series of prohibitions and requirements placed upon Intel to maintain and enhance the competitive environment in the CPU and GPU markets. However true to their word, the FTC did not push for any fines – this is a settlement of actions, and not one of greenbacks.

Background

As a quick refresher, the FTC had been investigating Intel for a number of years. Ahead of their suit in December of 2009 the FTC brought Intel to the table and tried to negotiate a settlement, but that didn’t come to pass. In the meantime Intel and AMD reached a separate truce back in November of 2009, an important distinction as AMD had been the primary instigator of all of the investigations against Intel. Ultimately the FTC decided to take their case forward without further help from AMD, a somewhat surprising move that at first glance seems to have largely panned out in the FTC’s favor.

In the suit, the FTC listed a number of complaints towards Intel over both the CPU and the GPU markets, where in the former Intel is the dominant player, and in the latter their market share has been increasing over the years as IGPs grow in popularity. The FTC’s complaints were roughly as follows:

CPU

  1. The usual complaints we’ve seen from the EU. Intel rewarded OEMs to not use AMD’s processors through various means, such as volume discounts, withholding advertising & R&D money, and threatening OEMs with a low-priority during CPU shortages.
  2. Intel reworked their compiler to put AMD CPUs at a disadvantage. For a time Intel’s compiler would not enable SSE/SSE2 codepaths on non-Intel CPUs, our assumption is that this is the specific complaint. To our knowledge this has been resolved for quite some time now.
  3. Intel paid/coerced software and hardware vendors to not support or to limit their support for AMD CPUs. This includes having vendors label their wares as Intel compatible, but not AMD compatible.
  4. False advertising. This includes hiding the compiler changes from developers, misrepresenting benchmark results (such as BAPCo Sysmark) that changed due to those compiler changes, and general misrepresentation of benchmarks as being “real world” when they are not.


The GeForce 9400M: Intel's chief competitor in the Core 2 integrated graphics market and a threatened product line

GPU

  1. Intel eliminated the future threat of NVIDIA’s chipset business by refusing to license the latest version of the DMI bus (the bus that connects the Northbridge to the Southbridge) and the QPI bus (the bus that connects Nehalem processors to the X58 Northbridge) to NVIDIA, which prevents them from offering a chipset for Nehalem-generation CPUs.
  2. Intel “created several interoperability problems” with discrete CPUs, specifically to attack GPGPU functionality. We’re actually not sure what this means, it may be a complaint based on the fact that Lynnfield only offers single PCIe x16 connection coming from the CPU, which wouldn’t be enough to fully feed two high-end GPUs.
  3. Intel has attempted to harm GPGPU functionality by developing Larrabee. This includes lying about the state of Larrabee hardware and software, and making disparaging remarks about non-Intel development tools.
  4. In bundling CPUs with IGP chipsets, Intel is selling them at below-cost to drive out competition. Given Intel’s margins, we find this one questionable. Below-cost would have to be extremely cheap.
  5. Intel priced Atom CPUs higher if they were not used with an Intel IGP chipset.
  6. All of this has enhanced Intel’s CPU monopoly.

The purpose of the suit and what would have been the associated trial would have been for the FTC to prove that Intel engaged in these actions, and more importantly that these actions were harmful to the market to a significant enough degree to run afoul of Section 5 of the FTC Act.

One other piece of more recent background information involves Dell. Dell has been under investigation by the US Securities & Exchange Commission for the past few years regarding financial irregularities. Those irregularities, as the SEC charges, were due to Intel’s secret rebates to the OEM to not use AMD processors. When Dell began using AMD processors in 2007 and those rebates stopped, Dell ceased to turn a profit.

In turn, since these payments were secret, investors had no idea that the only reason the company was profitable was due to these payments as opposed to entirely above-the-board measures by the company. The end result was that the SEC sued Dell, and last month Dell settled the case by paying a $100 million fine to the SEC. As is the case with similar settlements, the case is not legally binding proof of Intel’s actions, as Dell neither had to confirm nor deny the SEC’s charges (in essence allowing them to claim that the settlement is just the easiest way to get the SEC out of the way). It does however show us just how large Intel’s rebates to OEMs may have been.

The Settlement
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  • Hector2 - Friday, August 06, 2010 - link

    I spent several years in the military so am used to bad language, but that doesn't mean I enjoy seeing it --- especially on tech sites where you'd expect something better. If you want to sound like you actually made it beyond grade school, act like a grownup.

    Otherwise just stick to the non-tech sites where it seems to be popular these days to throw up toilet comments like your's.

    If Anand wants to maintain a focus on technical comments and opinions, I'd expect him to delete this garbage
    Reply
  • crazylocha - Thursday, August 05, 2010 - link

    Well written for almost every level of reader. Appreciate the combining of details, some of which was only able to garner from financial sites postings, and putting them together clearly.

    Substantial enough victories for AMD/Via. Nvidia may only claim partial victory, but foresee more lawsuits from them later, if they can afford it. Latest loss of patent issues combines with lower than expected sales of GF100 products may mean trouble for them. Wait and see.
    Reply
  • JMS3072 - Thursday, August 05, 2010 - link

    Above in the table, I think you mean "recompense", not "reprimands". Reply
  • Taft12 - Thursday, August 05, 2010 - link

    First off, this is a fantastic article Ryan! I have read several since the announcement and none have nearly the technical depth.

    One of the things not imposed by the FTC that I am very unhappy about is allowing 3rd parties to develop chipsets for current and future Intel CPUs.

    Socket 1156 chipsets are flat out neutered - a wonderful business opportunity that could be addressed not only by Nvidia, but smaller companies as well like SiS that could compete on price. There is no need for P55 and H55 boards to cost what they do now that the GPU is on the CPU die, but the monopolist won't share the ball.

    Hell, I'm looking at the result of this right at the side of my page in Anand's Twitter feed!

    the best P55 boards for 6Gbps SATA would be any board that uses a PLX chip to bridge multiple PCIe lanes together

    FAIL chipset from a scum company.
    Reply
  • Pirks - Thursday, August 05, 2010 - link

    Don't buy Intel shit, buy AMD! I buy AMD 780 and 880 boards and I'm the happiest guy ever. Best IGP ever and very solid 4 and 6 core monster CPUs. Intel can suck my dick. For free. Reply
  • Swivelguy2 - Thursday, August 05, 2010 - link

    Yeah... your comments on this article so far sure make you sound like the happiest guy ever. Reply
  • bah12 - Thursday, August 05, 2010 - link

    Agreed. If this is the same "Pirks" user on DT, just go ahead and ban this troll. He rarely has anything constructive to add. Mod's keep an eye out, don't want AT to turn into the free fro all DT comments have become. Reply
  • Pirks - Thursday, August 05, 2010 - link

    don't you stifle the freedom of speech, poo-bah Reply
  • synaesthetic - Monday, August 09, 2010 - link

    Since Anand and co. run this place, there really isn't any free speech here (or on any privately-owned site). They can delete whichever comments they want (and ban whomever they wish).

    The First Amendment only applies to free speech and the *government.*
    Reply
  • Hector2 - Friday, August 06, 2010 - link

    stay away from tech sites, Pirks, until you learn some better english. Stick to the 'tweener sites that oogle Lindsay & Britney. Reply

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