24 hours after senior Intel executives told ChannelNews that Intel was not corrupt, the US Federal Trade Commission has sued Intel, the world’s largest manufacturer of computer processors, claiming that the Company has engaged in a “systematic campaign to shut out rivals”. It is also alleged that Intel “illegally used its dominant market position for a decade to stifle competition and strengthen its monopoly.”As we exclusively reported yesterday, the FTC is also investigating Intel’s relationship with graphic chip (GPUs) maker Nvidia. The commission accuses Intel of “smothering potential competition” from GPU chips such as those made by Nvidia, claiming that Intel “misled and deceived potential competitors in order to protect its monopoly”.
David Shannon, Nvidia’s general counsel, claims that the FTC is looking into broader issues related to Intel’s behaviour.
He told Market Watch, “The FTC is looking at what Intel has done in the past, but it is also looking at current competition issues,” he said “It is very concerned about Intel’s conduct when it comes to the challenges that GPU computing brings.”
In its complaint, the FTC cited Intel’s conduct that it said “was and is designed to maintain Intel’s monopoly” in the CPU market, and “to create a monopoly for Intel in the markets for graphics processing units”.
The FTC claims that stand-alone graphics processors have become more sophisticated and powerful, so they are now also used to perform the functions of regular computer processors.
BusinessWeek claims that the FTCs inquiry had homed in on a pair of duelling lawsuits between Intel and Nvidia concerning a patent and contract dispute. Having previously agreed to allow Nvidia to create graphics chips that are compatible with Intel’s processors, Intel, the commission alleges, has sought to hold Nvidia back from becoming a competitive threat. “Intel’s apparent willingness to allow Nvidia to interoperate with Intel’s [chips] has dissolved as it has begun to perceive Nvidia as a threat to its monopoly position in the relevant markets,” the complaint reads.
AMD, in an emailed statement, called the FTC’s action “good for consumers,” calling it “yet another example of regulators around the globe acting to protect consumers by enforcing competition laws.”
In a statement Intel called the FTC’s suit “misguided,” and said it has “competed fairly and lawfully,” and that “its actions have benefited consumers”.
