UPDATE: US authorities ban Intel from "using threats"

US watchdog settles case, but doesn't fine Intel for anticompetitive behaviour

4 Aug 2010

Intel has reached a settlement with an American regulator over claims it paid off PC manufacturers to use its chips exclusively.

As expected, the US Federal Trade Commission hasn't fined Intel, but instead banned the chip maker from "using threats, bundled prices, or other offers to exclude or hamper competition or otherwise unreasonably inhibit the sale of competitive CPUs or GPUs".

Everyone gets a greater degree of certainty about the rules of the road going forward

Intel was also told to change its intellectual property agreements with AMD, Nvidia and Via, so the rival firms can consider mergers or start up joint ventures without threat of being sued by the chip giant over patent infringement.

The FTC is also requiring Intel to tell software developers that its compilers "may not register all the features of non-Intel chips", making rival products run software slower than Intel's own. The firm has set up a $100 million fund to reimburse software makers if they want to recompile their code.

“By accepting this settlement, we open the door to competition today and address Intel’s anticompetitive conduct in a way that may not have been available in a final judgment years from now," said FTC chairman Jon Leibowitz. "Everyone, including Intel, gets a greater degree of certainty about the rules of the road going forward, which allows all the companies in this dynamic industry to move ahead and build better, more innovative products.”

Intel stressed that the settlement means it has not admitted any guilt.

"This agreement provides a framework that will allow us to continue to compete and to provide our customers the best possible products at the best prices," said Doug Melamed, Intel senior vice president and general counsel. "The settlement enables us to put an end to the expense and distraction of the FTC litigation."

Previous fines

Intel was previously fined $1.4 billion by the EU and paid out £1.25 billion to AMD.

While those cases focused on Intel shutting out AMD in particular, the FTC had also accused Intel of taking a similar tactic with graphics processors, aiming to "preserve its CPU monopoly by smothering potential competition from GPU chips such as those made by Nvidia."

Dell paid a settlement of $100 million to the US Security and Exchange Commission in regards to Intel's excluisivity payments, which at one point made up 76% of its operating income.

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