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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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  • erple2 - Thursday, August 05, 2010 - link

    I'm not sure where this is coming from. For a surprising amount of time, Intel has had the top spot in the CPU space (from Core2Duo through the i7's today) so there's no reason not to be a fan of Intel's CPUs.

    It's also true that on the lower spectrum, AMD has done very well. They more or less toss Intel aside in the sub-200 dollar market.

    I haven't detected any serious "fanboism" that you're accusing Anandtech of. Talking with industry professionals has been one of the highlights of reading Anandtech. The AMD 4xxx story alone was worth jumping to this site over many other ones. And that was pure AMD marvelousness.
    Reply
  • synaesthetic - Monday, August 09, 2010 - link

    Intel didn't really get in as much trouble as the FTC hoped. This won't really change anything, especially not between NVIDIA and Intel.

    I'm disappointed that the FTC was unable to force Intel to license chipset makers for current-gen processors.

    It's really a shame for consumers, because the GeForce 320M is an excellent IGP and I'd like to see it in more laptops with Arrandale CPUs, rather than just the Penryn-equipped Macbook Pro 13.

    I hope AMD's new crop of mobile CPUs actually let them break into the business in a real way. The battery life figures for the new quad-cores are really surprising considering AMD's history for poor power efficiency in mobile CPUs.
    Reply
  • rickcain2320 - Thursday, August 05, 2010 - link

    Remember all that matters is dollars. I will NEVER buy an intel chipped PC. I'm happy with my X2 but am needing an upgrade badly..

    I'm salivating over that 6-core AMD and its on my must-buy list before Christmas.
    Reply
  • ClagMaster - Friday, August 06, 2010 - link

    SEC to Intel : I'll be back.

    Intel being Intel, and having such a powerful commanding lead, this is what has really happened.

    SEC will be back.

    What is said about the Intel Fortran Compiler is true. It has terrible performance on AMD processors. And as far as I know, it still is addled for AMD processors. That takes a deliberate act where the code queries the processor, and if its AMD, disables certain optimizing features. This is notorious where I work.
    Reply
  • Hector2 - Friday, August 06, 2010 - link

    Fortran ? Really ? Does anyone still use that ? Reply
  • ClagMaster - Friday, August 06, 2010 - link

    Yes.

    Fortran is still the heavy lifter for scientific and engineering codes.
    Reply
  • n0x1ous - Friday, August 06, 2010 - link

    Am I alone in that how this settlement affects Nvidia was the primary concern to most enthusiasts here? The FTC is supposedly after making things fair with this suit, but like Ryan said all the points the FTC won on were already being done/not done and won't change much for Intel.

    However, Nvidia is actively getting screwed by Intel every day that they are not allowed to make a chipset for i7 forward. Its the most blatant anti-competitive move in all of this and there is barely a mention or reason for not forcing Intel to give the license to Nvidia. FTC honchos probably were paid off by Intel.

    Cmon Intel, well we don't want to have to make reasonably priced boards so we will just take a monopoly on it. I mean its not like Intel still wouldn't sell a bunch of X58 P55 etc boards. Its such BS and it really pisses me off. I have been using an EVGA 680i board for 3 years and never had a problem with it, and it looks like it will be the only high end Nvidia chipset I will ever be allowed to buy..

    This really is a big deal, because we all know Nvidia's IGP's have been and will always be superior to Intel's. If I was AMD I would worry about ever having a better performing CPU then Intel. Next day x86 license might disappear after FTC gets paid off again!!!!!

    Ryan, do you think Nvidia will press on with a suit of their own about this?
    Reply
  • Ryan Smith - Friday, August 06, 2010 - link

    The NVIDIA vs. Intel suit in Delaware over NVIDIA's chipset license is still ongoing. So yes, NVIDIA will still be pressing on. However the trial got pushed back from August to December, so that case still has quite a long time to go. Unless NV and Intel settle ahead of time, it won't be until Sandy Bridge (or later) before the Nehalem chipset issue is ruled on. Reply
  • jensend - Friday, August 06, 2010 - link

    Since this doesn't do anything to get Intel to license the technology necessary for third parties to make chipsets, this does very little for consumers. Intel will keep on illegally using their CPU monopoly to strongarm themselves a GPU monopoly (the chipset monopoly already being a fait accompli), and since they have no chipset competition they have no reason to innovate or even bring decent products to the table in this space (native USB3 delayed until 2012). Reply
  • ClagMaster - Friday, August 06, 2010 - link

    Intel does not have a CPU or chipset monopoly with AMD around.

    And lets not forget the nonsense nVidia has about licensing SLI for Intel products.

    Intel has restricted access to DMI/QPI technology so only Intel Designed chipsets are available for i3/i5/i7 processors. Its not illegal but I feel Intel is actually restricting their competitiveness.

    Fundamentally, there are too many IT and enthusiasts too obsessed with performance and priced be damned. And Intel really exploits this with stunts like restricting access to DMI/QPI.

    If you find this too objectionable, there is always AMD. AMD produces CPU and Chipsets that offer great value (performance/dollar).
    Reply

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