What the FTC Didn’t Get

Going in to this suit, the FTC asked for a number of things, and while they got many of those things in the settlement they didn’t get all of them.  The following is our list of things the FTC asked for from our earlier article, and whether they got that item under the terms of the settlement or not.

FTC/Intel Lawsuit Requested Remedies
Request Result
For Intel to be barred from paying OEMs to not use AMD processors Intel is barred from offering rebates, kickbacks and some forms of volume discounts
For Intel to be barred from threatening OEMs in to not using AMD processors Intel is barred from witholding advertising money, technical support, or chips from OEMs using AMD CPUs
For Intel to be barred from selling products below cost Intel is not allowed to sell CPUs or chipsets below the product cost
For Intel to be barred from designing or selling products that inhibit 3rd party GPU performance Intel is not allowed to make design choices that reduce GPU performance unless they can prove doing so improves CPU performance
For Intel to make reparations to customers who used their compiler not knowing that it may discriminate against non-Intel CPUs Intel is required to set up a $10 million fund to pay for customers who were mislead and wish to switch to another compiler
For Intel to to be barred from making misleading statements about their compiler and its performance Intel is required to disclose that their compiler may discriminate against non-Intel CPUs, and is not allowed to claim that their compiler is faster for non-Intel CPUs when it is not
For Intel to license the QPI and DMI buses to third party chipset manufacturers. The FTC did not get this; Intel is under no obligation to license QPI or DMI
For Intel to allow AMD and Via to outsource their x86 CPU fabrication to third party fabs Intel is required to allow AMD and Via to outsource their x86 CPU production to third party fabs so long as those fabs uphold certain IP protection requirements
For Intel to stop badmouthing competing products unless they have solid scientific evidence (primarily in the GPU space) Compilers: Yes
GPUs: No
For Intel to pay for the independent organization (Technical Consultants) that will monitor their compliance Intel is required to pay up to $2 million over 10 years for the Technical Consultants to monitor their compliance

The FTC got the vast majority of what they requested. Intel is barred from engaging in a number of anti-competitive practices, including benefits for OEMs to only use Intel CPUs, punishments for OEMs using non-Intel CPUs, from designing products to reduce GPU performance, from outright denying the transfer of an x86 license should a current holder be purchased, and from making misleading statements about their compiler.

In fact there’s really only two things on the FTC’s list that they didn’t get: they didn’t get chipset licenses, and they didn’t get stronger protections for AMD and NVIDIA’s GPU divisions.  It’s probably not a coincidence that both of these issues were primarily of importance for NVIDIA, as AMD does not make Intel chipsets and AMD is not currently locking horns with Intel over high performance computing using GPUs. For as much as the FTC got out of this settlement, it’s interesting that they did not get these last two items. It may very well be that NVIDIA has truly given up on making a DMI/QPI chipset, in which case the chipset requests would be rendered moot. But NVIDIA has claimed loudly to the FTC that Intel is hurting their business by making false claims about CPU and Larrabee performance versus GPGPU performance, and there’s nothing in this settlement about that.

It’s worth noting that NVIDIA did not release an official response to this settlement even though it has directly impacted them. There are a number of ways to interpret this, but the most likely interpretation is that the two companies are going to continue butting heads unabated. AMD and Intel may have peace, but right now it’s a safe bet that NVIDIA and Intel do not.

Final Thoughts

Wrapping things up, we’ve looked at what the FTC’s complaints were, what they asked for, and what they’re getting out of this settlement. What remains however is probably the most important question for computer buyers reading this article: how will it impact you?

The short answer is that it won’t. Computers won’t become cheaper, new Intel-compatible chipsets won’t be introduced, the forthcoming fusion of the CPU won’t be changing schedule, etc. In reality most of the things Intel is being barred from doing are things that they discontinued doing long ago if they did them at all (note that this settlement is not an admission of guilt on Intel’s part). The FTC calls these measures corrective, but outside of the compiler requirements these measures would better be described as preventative. This settlement is structured as a list of things Intel can and can’t do, and almost all of the measures are things they already have or have not been doing.

The most unexpected measure to come out of this settlement is without a doubt the “change of control” requirements. This opens the door to another company taking over one of the two non-Intel x86 licenses from either AMD or Via by buying them out, but this is by no means a given. It’s something worth keeping an eye on for now, but it doesn’t appear to be something that is going to be acted upon any time soon.

The biggest impact from this settlement will be what does not happen, and that’s a repeat of the Athlon 64/Pentium 4 situation in 2003, with Intel using their marketing muscle and underhanded tactics to limit AMD’s progress at a time where they offered a superior CPU. Now that Intel has already been through this process and the FTC will be regularly monitoring their compliance, any kind of underhanded tactics against AMD would quickly get them in trouble with the FTC with little recourse to get out of it. In spite of the corrective nature of the settlement it probably doesn’t go far enough to completely undo the damage that AMD suffered if all of the FTC’s claims are true, but between this settlement and the private AMD settlement quite a lot of requirements have been hoisted onto Intel.

Ultimately, is this enough to prevent anti-competitive abuse in the future? The most optimistic response is that hopefully we never find out the answer to that.

The Settlement
POST A COMMENT

63 Comments

View All Comments

  • crimson117 - Thursday, August 05, 2010 - link

    It's frustrating that the SEC can just settle over such a severe issue.

    We'll never know the extent of the payments or how badly Dell and Intel misled their investors because Dell bought off the SEC for $100 million.

    Although the FTC didn't prove anything, at least they made Intel promise not to do those things in the future.

    Unless a settlement establishes accountability and responsibility, and sets things straight, it's just a bribe.
    Reply
  • AmdInside - Thursday, August 05, 2010 - link

    I think the real winner in all of this was Intel. They did not have to concede much nor pay a heavy penalty.

    AMD came second for their CPU businesses.

    The settlement almost does nothing for the GPU business so NVIDIA got screwed.

    Does Via do anything today with their x86 license?
    Reply
  • Taft12 - Thursday, August 05, 2010 - link

    yes they do - the C7 is lacking in performance, but you can run x86 Windows and Linux on it no problem:

    http://www.newegg.ca/Product/Product.aspx?Item=N82...

    Unfortunately the Atom really made this stuff from Via obsolete.
    Reply
  • Rayb - Friday, August 06, 2010 - link

    For Nvidia has to takeover Via to compete in the future with intel, it's their only option if they want to remain viable to go head to head with the competition. Reply
  • synaesthetic - Monday, August 09, 2010 - link

    I've been saying this for over a year now. NVIDIA needs to buy VIA, VIA needs to release an improved counter to Atom and NVIDIA needs to stop putting ION in netbooks with Intel processors.

    NG-ION was really disappointing due to the chipset issue. Thanks to the limited PCIe lanes available to the GPU, the GT218 performs almost as poorly as a 9400M (not that the GT218 is a very good GPU anyway).

    None of the new ION netbooks are as good as the HP Mini 311 is.
    Reply
  • sotoa - Thursday, August 05, 2010 - link

    This was a great article. An easy read too.
    Interesting how Dell is now not turning a profit. LOL! But that's big business for ya.

    It's a shame that AMD's 64 got crippled because of Pentium 4. AMD had a good run back then.
    Reply
  • Wurmer - Saturday, August 07, 2010 - link

    ''It's a shame that AMD's 64 got crippled because of Pentium 4. AMD had a good run back then.''

    It's not so much that AMD's 64 has gotten crippled by the crappy Netburst Pentium 4 as much as it has been crippled by Intel's very questionable way of doing business. What the quality of their product couldn't impose, their money did. Back then, AMD had clearly the best product but it seems that it didn't not suffice for obvious reasons. A lot of storms and bumpy roads can be weathered when you spread enough money around...
    Reply
  • tejas84 - Thursday, August 05, 2010 - link

    Well Anand you are a self confessed Intel fanboy and I can imagine you are not too happy at what has transpired with Intel.

    Intel now have to play on level terms and I think that Nvidia and AMD are going to show what they are made of.

    No more swooning over people like Pat Gelsinger any more for you Anand. The Intel joyride was fun but is now coming to an end.

    Anand I would like you to meet the future.... AMD and Nvidia please step forward
    Reply
  • Pirks - Thursday, August 05, 2010 - link

    "Nvidia please step forward"
    then bend over and open your gape hole wider, Intel has some more QPI/DMI love for ya, HARDcore style!
    Reply
  • Taft12 - Thursday, August 05, 2010 - link

    I think Intel's business practices are deplorable and this slap on the wrist is a slap in the face to the US consumer, but Anand is certainly entitled to be a fan of their engineering accomplishments.

    I am too, even if I won't buy any.
    Reply

Log in

Don't have an account? Sign up now