Intel and the Federal Trade Commission announced Wednesday a tentative settlement of an antitrust action filed last December alleging anticompetitive practices by the world’s number-one microprocessor manufacturer. The settlement is subject to a 30-day public comment period as well as final FTC approval.
FTC Chairman Jon Leibowitz said he expects the provisions to which Intel has agreed will open the door to renewed competition and prevent the chipmaking giant from suppressing competition in the future.
“This case demonstrates that the FTC is willing to challenge anticompetitive conduct by even the most powerful companies in the fastest-moving industries,” Leibowitz said. “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.”
No More Kickbacks
The FTC’s settlement is expected to result in major changes to the ways that Santa Clara, Calif.-based Intel sells and promotes its CPUs, graphics processors, and chipsets. Among other things, Intel is prohibited from offering material benefits to computer makers in exchange for their promise to buy Intel chips on an exclusive basis.
Moreover, the impact of the settlement won’t be restricted to a single competitor, as was Intel’s $1.25 billion antitrust deal in November 2009 with rival Advanced Micro Devices. Before their settlement, AMD had accused Intel of using billions of dollars in “rebates” to coerce PC makers Dell and Hewlett-Packard into excluding AMD chips in their desktop and laptop products.
Other alleged Intel practices — such as bundling prices or deceiving OEMs about the performance of rival processors, chips and chipsets — are likewise prohibited under the FTC settlement. In May 2009, the European Commission slapped Intel with a record $1.45 billion fine and restricted its use of microprocessor rebates and other…