AMD and Intel have had their differences. And by differences, we mean Intel engaging in anti-competitive actions that they’ve been found guilty of in the European Union.

But all of this was supposed to come to a close last month, when AMD and Intel buried the hatchet and made up for past offenses. In return for some cash, some good behavior out of Intel, and for Intel to stop trying to block the Global Foundries deal, AMD would drop all of their civil and regulatory complaints against Intel. And that would be the end of Intel’s legal problems with various governments, right? No, as it turns out that’s wrong.

The catalyst for Intel’s legal woes (besides their own actions, obviously) has been AMD complaining to various regulatory boards about anti-competitive actions undertaken by Intel. Based on those complaints, the European Commission, the South Korean FTC, and the American FTC have been investigating Intel for some time now over these alleged actions. Intel has been found guilty and fined in the EU and South Korea (with both cases on appeal) while the American FTC has continued to investigate.

In fact despite the FTC just now suing Intel, this is actually about half-way through the process. The FTC investigation is done, and they have been negotiating with Intel in private for quite some time to get the matter settled. A lawsuit is the next step for the FTC, when those negotiations break down. Those negotiations have in fact broken down, so here we are: the FTC has sued Intel, and the biggest court battle ever for Intel is soon to begin.

What the FTC Accuses Intel of Doing in the CPU Market

As the FTC’s investigation into the matter is already over, they have published a complete list of complaints against Intel which will be the basis of the coming trial. Based on these complaints the FTC case is a significant departure from the EU and South Korean cases, as the FTC is accusing Intel over not only anti-AMD shenanigans early this decade, but of continuing anti-AMD and anti-NVIDIA shenanigans right up to this day.

The Athlon, the processor that's at the root of all of Intel's legal troubles

The case fundamentally breaks down into two halves: what Intel did against AMD in the CPU market, and what they’re continuing to do against AMD and NVIDIA in the GPU market. Let’s start with the CPU-focused complaints:

  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 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.

Interestingly enough, the FTC cites Intel’s reasoning for all of this being that the company was at a competitive disadvantage, and engaged in these actions to buy time to improve their products. The timelines given place specific emphasis on the Athlon (K7) launch in 1999, and the Athlon 64 (K8) launch in 2003. This is a somewhat different take than in past cases, where Intel was merely accused of attempting to keep AMD’s overall market share down rather than specifically bridging performance gaps.

The FTC believes that the effects of all of these actions have (besides limiting AMD): served to drive up CPU prices, driven up CPU distribution costs, limited CPU innovation, harmed AMD’s ability to market CPUs, limited the ability of OEMs to innovate and differentiate their products, and reduced the quality of industry benchmarking.

Ultimately all of the CPU accusations are for things long past; none of the FTC’s CPU-related allegations are for things that have occurred in the last few years. We would not take this as a sign that the FTC is happy with the current market situation, but that they have no proof that they wish to follow up on that would show Intel as having engaged in anti-competitive actions in the CPU market in the last few years. The FTC does want some significant changes at Intel, which we’ll discuss in a bit.

Finally, there’s also the matter of AMD. Since AMD and Intel have settled their matters, AMD is presumably not going to participate in these proceedings as an ally of the FTC. As the FTC is going ahead on these charges, it’s clear that they aren’t worried about what this means for their position.

What the FTC Accuses Intel of Doing in the GPU Market

When we were first reading the FTC’s suit, the thing that caught us entirely off-guard was that it wasn’t merely about anti-competitive actions in the CPU market, but anti-competitive actions in the GPU market as well. While the CPU-related accusations are all for things done well in the past, the GPU accusations are fresh, very fresh. These run right up to today, and include the Larrabee project and the anti-competitive actions Intel has taken in the GPU market both outside and inside that project. To get right to the point, the FTC believes that as things currently stand, Intel is likely to get a monopoly on the GPU market similar to the one that they have on the CPU market, and that this monopoly will be created by abusing their CPU monopoly.

In the complaints about the GPU market, both NVIDIA and AMD are mentioned as being the primary competitors for Intel. The bulk of the complaints however are related to NVIDIA and their chipset business, as while AMD stands to be harmed too by an Intel GPU monopoly, it’s NVIDIA that stands to be the most harmed. In effect Intel has finally gotten AMD off their back for CPU matters, only to now have NVIDIA on their back for GPU matters.

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

Just to note where things stand, the FTC already estimates that Intel has approximately 50% of the GPU market. This is consistent with the vast number of Intel IGP-equipped computers that are on the market. Depending on how you intend to count various user bases, this stands to grow in the future as Intel puts their IGP GPUs first on-chip, and then on-die with their CPUs.

The basis of the FTC’s complaint here is that they believe Intel is threatened by the rise of GPUs as programmable computing devices, and that using them in GPGPU situations threatens Intel by making CPUs less important (something NVIDIA has been trying to play for ages) and as a result less profitable. The FTC argues that Intel is seeking to establish a monopoly here to maintain their overall control of (and high margins in) the computing market.

As for the specific complaints:

  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 2 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 FTC believes that all of this will help Intel to establish a GPU monopoly. This is on top of all other effects of Intel’s actions, which are similar to the effects of their actions in the CPU market: driving up GPU prices, driving up GPU distribution costs, limited OEM differentiation, and limited GPU innovation.

There’s also one last complaint unrelated to GPUs, which has to do with standards.

  1. Intel used their market position to delay AMD and NVIDIA’s implementations of USB and HDCP by refusing to make the specifications accessible until Intel’s products were ready. We know that there has been some strife among Intel and virtually everyone else over Intel dragging its heels on the USB3 specification, but it’s not clear if this complaint is about that.
Intel's Response & What The FTC Wants


View All Comments

  • Scali - Friday, December 18, 2009 - link

    Intel didn't license the x86 design to AMD at all.
    AMD manufactured Intel's designs as a second source, but AMD had no rights to the design at all.
    It's no different from AMD having their CPUs manufactured by GlobalFoundries and Chartered, or AMD/nVidia having their GPUs manufactured by TSMC.

    The issue with the 386 was that Intel had never used any second source at all (by then there were enough clones on the market that IBM could no longer make any demands). AMD tried to reverse-engineer the 386 and make their own clone. The court actually DIDN'T rule that AMD was covered by the license agreement. One major problem was the copyright that Intel had on the microcode. However, since x86 became such an important architecture, the court decided to have Intel license it anyway. But AMD did NOT win the claim that they had the right to the x86 architecture based on the earlier second-source contracts.
    This is why it took so long to get a ruling in the court, and why an all-new x86 cross-licensing contract had to be drawn up (which would never be required if AMD was already covered, would it?).

    I'd like to add that I'm getting pretty tired of people like you, with comments like 'your dreaming'. You don't even seem to grasp basic English grammar, and you obviously don't know the facts. Yet you try to 'correct' someone who does know what he's talking about, and do it in a patronizing way.
  • Griswold - Thursday, December 17, 2009 - link

    Why do you people think that all the problems intel is facing would just go away when they struck that deal with AMD? They broke laws and in the end cheated not only AMD but mostly you, the customers.

    You cant undo that by paying some cash to AMD and settle patent disputes. That is what the FTC is for. They will be hard on intels ass and it is clear to me that they will find alot of rotten fish, just like the south korean authorities did and recently the EU trade commision.

    I'm an intel shareholder. I would be happy if intel was not guilty. But they're not, I'm sure of that. And I'll have to keep an eye on the situation as a shareholder. My investment was not affected after the EU found intel guilty, mostly because everyone expected it and knew Intel guilty. I wonder if the same will hold true once the FTC fines Intel in the future...

  • uibo - Thursday, December 17, 2009 - link

    What does the I/F stand for on the last image? Interface? Reply
  • thebeastie - Wednesday, December 16, 2009 - link

    Even if you want to live in dream land and believe that Intel never did things unfair to AMD in the past it is even impossible to see that Intel are being complete pricks with NVidia and x58 MB chipsets.
    If NVidia were able to make MB chipsets for x58 I am sure we would have some cool new stuff like SATA3 already here and more MB choices and cheaper MBs on top.

    You can argue about specifics until the Jesus returns but the reality is Intel need to be king hit and need to take it in the backside for once and just play a bit more fair and reasonable.

    Intel has always been in a very unique business position to just about any other company in the world and they have fully exploited it in every means possible especially via laws and smart lawyers that wouldn't normally have such good position due to the unique nature of CPUs.
    I am sure suing them is a difficult task but I fully support it and it must be done.

  • Orangutan2 - Thursday, December 17, 2009 - link

    Word, bring in nVidia chipset competition.

  • - Thursday, December 17, 2009 - link

    Can anyone say Standards-
    Intel playing on an level playing field?? Intel relying on tech alone??
    yeah, I know, most void of the knowledge of history would say -"but Intel has always made the better processor"- therein lies the rub

    (a time line of events around AMD's Opteron that lead to the FTC's decision)

    In 2004 AMD produced the first X86 dual core server procrssor, in 2005 Intel was the first to ship their dual core">
    To sleep: perchance to dream
    Intel First to Ship Dual Core
    .........Dell announced it would be one of the first PC makers to ship Intel's new dual core Pentium Extreme. .....prices starting at around $3,000. ...">
    Workstation Processors Duel: AMD Opteron against Intel Xeon
    [12/21/2005 08:44 PM | CPU]
    by Ilya Gavrichenkov
    ..... It is a fact that AMD is currently the technological leader and has been such for quite a while already. ..">
    Something is rotten in the state of Denmark
    May 18, 2006 2:00 PM PDT
    Dell opts for AMD's Opteron
    By Tom Krazit , Michael Kanellos and Ina Fried
    Staff Writers, CNET News

    Dell has agreed to use Advanced Micro Devices' Opteron chip- ending a long-standing policy of sticking exclusively with Intel. . ...........">
    AMD Files Antitrust Complaint Against Intel In U.S. Federal District Court
    – Intel’s Illegal Acts Inflate Computer Prices and Limit Choices for Businesses and Consumers –">
    Find out the cause of this effect,
    Or rather say, the cause of this defect,
    For this effect defective comes by cause

    So Intel's practice of building a better mouse trap while holding back the competition is over- can they compete on a level playing field? can you teach an old dog new tricks? can Intel make a decent graphics chip?
  • Scali - Friday, December 18, 2009 - link

    I could say standards, but the bottom line is..
    x86, PCI, PCI-e, SATA/AHCI, USB...
    Intel is heavily involved with pretty much all common standards that a modern PC is based on, not just the CPU, but also the chipset technology.

    AMD hasn't done all that much for standards, aside from adding some extensions to Intel's x86 architecture.
  • shotage - Wednesday, December 16, 2009 - link

    Take away the x86 licensing from Intel pure and simple. This needs to happen. Reply
  • wumpus - Thursday, December 17, 2009 - link

    Considering that the Pentium (original) came out more than 17 years ago, any production of the 32-bit x86 has to be considered prior-art (I'm sure they have some sort of other bogus IP protection, but patents would be worthless). MMX should come pretty soon, but you would have to wait for SSE and later. Also note that these are almost certainly "use a pin/bit to change something blindingly obvious" patents, and were probably shotgunned at the patent office until somebody let one through. Don't count on seeing a court invalidate a patent over a FTC complaint, though.

    You would have to get AMD64 from AMD. Of course, it requires SSE-something or other, which you would have to pry out of Intel's cold dead hands.
  • Scali - Thursday, December 17, 2009 - link

    32-bit x86 started with the 386 back in 1985... So building a 32-bit x86 without a license shouldn't be a problem.
    Thing is, you need at least a Pentium II to run a modern version of 32-bit Windows, if I'm not mistaken. They use the new instructionset features such as sysenter and whatnot. And you can't do that without a license.

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