Intel Settles With the FTC
by Ryan Smith on August 5, 2010 11:48 AM ESTWhat 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.
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FTC/Intel Lawsuit Requested Remedies |
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| 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.
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erple2 - Thursday, August 5, 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.
synaesthetic - Monday, August 9, 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.
rickcain2320 - Thursday, August 5, 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.
ClagMaster - Friday, August 6, 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.
Hector2 - Friday, August 6, 2010 - link
Fortran ? Really ? Does anyone still use that ?ClagMaster - Friday, August 6, 2010 - link
Yes.Fortran is still the heavy lifter for scientific and engineering codes.
n0x1ous - Friday, August 6, 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?
Ryan Smith - Friday, August 6, 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.jensend - Friday, August 6, 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).ClagMaster - Friday, August 6, 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).