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


View All Comments

  • 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
  • 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.
  • 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.
  • 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.*
  • 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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