FTC Files Suit Against Intel, Chip Maker Calls Case Misguided

The Federal Trade Commission filed a lawsuit against Intel Corp today charging the chip maker with “illegally [using] its dominant market position… to stifle competition and strengthen its monopoly.” This comes after an almost four year long probe into Intel’s practices. In 2006 the FTC started the process with an informal inquiry, spurred on by the American Antitrust Institute. In June of 2008 the FTC moved on to the next step, a formal probe, and issued a subpoena to Intel. Since that time Intel and the FTC have apparently been attempting to settle the case, but according to Intel senior vice president and general counsel Doug Melamed, the FTC “insisted on unprecedented remedies” that stalled talks and led to today’s filing.

The FTC alleges that Intel isn’t just being competitive in the market but unfairly hampering other CPU makers (AMD being the only serious competition, according to the FTC) by either threatening or rewarding computer vendors to keep them from buying other CPUs. The suit also alleges Intel redesigned their compiler to actively hamper the performance of non-Intel chips (instead of the compiler simply working better with Intel chips, a subtle but important difference).

Intel’s response to the lawsuit is that it has done nothing wrong. It also included an allegation that the FTC didn’t investigate some of the claims against Intel before filing and tacked them on just before. Though they aren’t explicit, I wonder if these are the same Section 2 “tag along” claims that Commissioner Rosch dissented on in his Concurring and Dissenting Statement (PDF).

Should the FTC win this suit, how much will the CPU landscape change? Will it resemble the current GPU landscape which, according to the FTC, is in danger of being taken over by Intel in a similar fashion to their CPU dominance? It will be years before the dust settles, but hopefully the court filings and procedures will give us a glimpse into the competitive world of computer processors.