FTC sues Intel over alleged anticompetitive tactics

Posted:
in General Discussion edited January 2014
The U.S. Federal Trade Commission announced Wednesday it filed a lawsuit against chip maker Intel Corp., accusing the company of illegally using its position to stifle competition.



The FTC has alleged that Intel "waged a systematic campaign to shut out rivals' competing microchips by cutting off their access in the marketplace. In the process, Intel deprived consumers of choice and innovation in the microchips that comprise the computers' central processing unit, or CPU."



In June 2005, Apple announced it would switch to Intel processors for all of its Mac products. Previously, Macs were powered by microprocessors from Freescale and IBM. By the start of 2007, the transition was complete.



Apple co-founder Steve Jobs said that his company was disappointed with the progress of the PowerPC technology. The Mac maker switched to Intel because they felt the world's largest chip maker could better suit their needs.



Intel's role in the chip market goes well beyond Apple. Its dominant presence in the PC market as a whole has caught the attention of the FTC, which believes that Intel used threats and offered rewards to computer makers Dell, HP and IBM to keep them from using rivals' products. The commission has alleged that Intel used a practice known as "restrictive dealing" to prevent manufacturers from marketing computers that do not feature an Intel chip.



"Intel has engaged in a deliberate campaign to hamstring competitive threats to its monopoly," said Richard A. Feinstein, Director of the FTC?s Bureau of Competition. "It?s been running roughshod over the principles of fair play and the laws protecting competition on the merits. The Commission?s action today seeks to remedy the damage that Intel has done to competition, innovation, and, ultimately, the American consumer."



The commission also claims that Intel has secretly designed compilers to deliberately restrict the performance of competitors' chips, like products from Advanced Micro Devices. It has alleged that Intel has "deceived" its customers by failing to disclose its practices, and claiming that software performed better on its chips than those of others.



Now, the FTC said, Intel has taken the same monopolistic approach toward Nvidia in the graphics processing unit market. In October, Nvidia announced it would cease development of future hardware until its ongoing lawsuit with Intel is settled sometime in 2010. Until then, the nForce chipset line has been placed on hold.



Intel is accused of violating Section 5 of the FTC Act, which prohibits unfair methods of competition and deceptive acts and practices in commerce. The chip-maker is also charged with illegal monopolization, attempted monopolization, and monopoly maintenance. The commission approved the suit 3-0.



Months ago, the FTC had taken an interest in Google and Apple, which shared two links between their respective boards of directors. After Eric Schmidt, chief executive of Google, resigned from the Apple board, and Arthur Levinson, former CEO of Genentech, left the Google board, the commission said it was satisfied with the outcome.
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Comments

  • Reply 1 of 52
    aplnubaplnub Posts: 2,572member
    I guess Intel wanted to get a little too serious. I felt like playing nice with NVidia would have kept them out of trouble but maybe not. Geez, I bet there are some puckered hind-ends at Intel.
  • Reply 2 of 52
    djrumpydjrumpy Posts: 1,116member
    Quote:
    Originally Posted by aplnub View Post


    I guess Intel wanted to get a little too serious. I felt like playing nice with NVidia would have kept them out of trouble but maybe not. Geez, I bet there are some puckered hind-ends at Intel.



    Agreed. This isn't some random lawsuit from some disgruntled manufacturer. They said they would be cracking down on anti-competitive practices. I'm still waiting/hoping for the bomb to drop on the telecommunications industry.
  • Reply 3 of 52
    Quote:
    Originally Posted by aplnub View Post


    I guess Intel wanted to get a little too serious. I felt like playing nice with NVidia would have kept them out of trouble but maybe not. Geez, I bet there are some puckered hind-ends at Intel.



    Typing on iPhone but boy is there ever a story to tell.



    1999. AMD and Apple had something in common, clockspeed did not define the strenght ig the CPU. AMD. Had released the 1.0 before intel and like the PowerPC, it did more work with slower speeds. It once got so ugly for Intel that they Neenah almost 1.0 gigahert mote than AMD at achieving the same benchmarks. The thing is though is that intel had deep pockets so that along with core duo and the forced sale of the AMD Dresdend Fab, put intel on top againg. To bad too. Although not as bad as before where intel litterlly charger $500 more for a 50hz speed bump over chips, is was AMD that made fast powerful computing available to all. Maybe this is the shot they need. Goodness knows we pay a fortune for intel if know amd around.



    The sad part for die hard pc lovers is that when they saw Apple go to intel many were excited but it never happened in that as the chip got cheaper, so did the machine. It never happened. Some actually thought was going to happen and Apple would be everywhere or rather their macs.





    Peace
  • Reply 4 of 52
    djrumpydjrumpy Posts: 1,116member
    Quote:
    Originally Posted by hiimamac View Post


    Typing on iPhone but boy is there ever a story to tell.



    1999. AMD and Apple had something in common, clockspeed did not define the strenght ig the CPU. AMD. Had released the 1.0 before intel and like the PowerPC, it did more work with slower speeds. It once got so ugly for Intel that they Neenah almost 1.0 gigahert mote than AMD at achieving the same benchmarks. The thing is though is that intel had deep pockets so that along with core duo and the forced sale of the AMD Dresdend Fab, put intel on top againg. To bad too. Although not as bad as before where intel litterlly charger $500 more for a 50hz speed bump over chips, is was AMD that made fast powerful computing available to all. Maybe this is the shot they need. Goodness knows we pay a fortune for intel if know amd around.



    The sad part for die hard pc lovers is that when they saw Apple go to intel many were excited but it never happened in that as the chip got cheaper, so did the machine. It never happened. Some actually thought was going to happen and Apple would be everywhere or rather their macs.



    Peace



    I agree with some of your post, but from what I saw of general usage, the Mac got MUCH faster when they did the switch. It was before my time, but the videos are all over youtube (or they were).



    Anyone who's long in the tooth want to chime in? I'm curious if the reports were true.
  • Reply 5 of 52
    The case will drag on a decade or so until the market has changed so much that the outcome doesn't matter, and maybe there will be a new Republican administration that wants to settle for less than a slap on the wrist. Just like happened with the Microsoft case.
  • Reply 6 of 52
    MacProMacPro Posts: 17,513member
    I wonder if this will give Nvidia the cover to allow them to go back to normal business without fear of the law suit?
  • Reply 7 of 52
    Either way, Nvidia will have their day!



    The Penguin.



    Quote:
    Originally Posted by digitalclips View Post


    I wonder if this will give Nvidia the cover to allow them to go back to normal business without fear of the law suit?



  • Reply 8 of 52
    Quote:
    Originally Posted by DJRumpy View Post


    I agree with some of your post, but from what I saw of general usage, the Mac got MUCH faster when they did the switch. It was before my time, but the videos are all over youtube (or they were).



    Anyone who's long in the tooth want to chime in? I'm curious if the reports were true.



    I bought my first MBP in January of 2006, excited about the switch and looking for a laptop. It arrived in March, a CoreDuo 1.83. It was easily fast enough for me to sell my 2.0Ghz DP G5 PowerMac.
  • Reply 9 of 52
    Quote:
    Originally Posted by DJRumpy View Post


    I agree with some of your post, but from what I saw of general usage, the Mac got MUCH faster when they did the switch. It was before my time, but the videos are all over youtube (or they were).



    Anyone who's long in the tooth want to chime in? I'm curious if the reports were true.





    I have a G5 PowerMac, that is just now starting to feel a little old. Not for the speed, but due to applications coming out for Intel only.

    The PowerPC G5 was a very powerful processor for its time. Look at these benchmarks from MacWorld. The first is the G5 2.3GHz Dual tests from back in 2005:

    SpeedMark4 (bigger is better) - 224

    PhotoShop CS2 test (less is better) - :59

    Cinema 4D render test (less is better) - 1:13



    Here is an iMac Core 2 Duo 2.4 GHz from last year (note that the software versions are not the same, for whatever difference that might make)

    SpeedMark5 - 230

    PhotoShop CS3 test - 1:02

    Cinema 4D render test - :54



    As you can see, these two machines, three years apart, have almost identical performance characteristics for these three tests.



    The continued performance of my G5 has made me hesitate to upgrade. My experience with my family's Macs (MacBook and iMac) have not shown any obvious speed differences to me in everyday use. The one issue I am starting to run into is updating purchased software, only to find the upgrade is Intel-only. That frustration will lead me to upgrade my machine in the next year.
  • Reply 10 of 52
    The AI story implies that Apple will be Exhibit A in the case against Intel. I wonder if that's true. If so, the relationship between the companies could be in for some damage.
  • Reply 11 of 52
    djrumpydjrumpy Posts: 1,116member
    Quote:
    Originally Posted by Applecation View Post


    I have a G5 PowerMac, that is just now starting to feel a little old. Not for the speed, but due to applications coming out for Intel only.

    The PowerPC G5 was a very powerful processor for its time. Look at these benchmarks from MacWorld. The first is the G5 2.3GHz Dual tests from back in 2005:

    SpeedMark4 (bigger is better) - 224

    PhotoShop CS2 test (less is better) - :59

    Cinema 4D render test (less is better) - 1:13



    Here is an iMac Core 2 Duo 2.4 GHz from last year (note that the software versions are not the same, for whatever difference that might make)

    SpeedMark5 - 230

    PhotoShop CS3 test - 1:02

    Cinema 4D render test - :54



    As you can see, these two machines, three years apart, have almost identical performance characteristics for these three tests.



    The continued performance of my G5 has made me hesitate to upgrade. My experience with my family's Macs (MacBook and iMac) have not shown any obvious speed differences to me in everyday use. The one issue I am starting to run into is updating purchased software, only to find the upgrade is Intel-only. That frustration will lead me to upgrade my machine in the next year.



    I would think folks would be all over this. I've had experience with old Motorola chips from my Amiga days. They were impressive chips, but I have nothing recent to judge them by. If these numbers are accurate, and I have no reason to doubt that they are, I'm surprised folks aren't squawking more.
  • Reply 12 of 52
    Quote:
    Originally Posted by Dr Millmoss View Post


    The AI story implies that Apple will be Exhibit A in the case against Intel. I wonder if that's true.



    I doubt it. I think this is mainly about Intel vs AMD and Intel's dirty tricks in making sure that Dell, HP et al used almost exclusively Intel CPUs instead of AMD ones. The European Union already has a similar case going against Intel:



    http://news.bbc.co.uk/2/hi/8047546.stm



    Michael.
  • Reply 13 of 52
    I hope they sue for billions. Then I hope intel will directly pass those costs on to me, the consumer. Thanks, for protecting me FTC!
  • Reply 13 of 52
    Quote:
    Originally Posted by michaelab View Post


    I doubt it. I think this is mainly about Intel vs AMD and Intel's dirty tricks in making sure that Dell, HP et al used almost exclusively Intel CPUs instead of AMD ones. The European Union already has a similar case going against Intel.



    Thanks for the link, but that was the EU's case, this one is from the FTC. Could be similar is some respects, but the laws and the politics in the US are different. Here is the text of the complaint:



    http://www.ftc.gov/os/adjpro/d9341/091216intelcmpt.pdf



    Haven't read it completely yet, but Apple is mentioned only twice. Still, I'm sure it hasn't escaped the FTC's attention that Apple was until recently a competitor to Intel, but has since abandoned competition to become a customer. If I were an FTC lawyer, I'd sure want to talk to some people at Apple about how that happened.
  • Reply 15 of 52
    wizard69wizard69 Posts: 12,534member
    Quote:
    Originally Posted by DJRumpy View Post


    I agree with some of your post, but from what I saw of general usage, the Mac got MUCH faster when they did the switch. It was before my time, but the videos are all over youtube (or they were).



    At the time of the switch PPC processors sucked royally. The only time there was a performance advantage was when Alt-Vec could be used. Even then a pathetically slow I/O bus was a big problem. The G5 only slightly resolved these issues and it's integer performance was terrible in comparison to other offerings.



    About that integer performance, it is a critical consideration with respect to overall performance. The OS does very little with FP for general house keeping.

    Quote:



    Anyone who's long in the tooth want to chime in? I'm curious if the reports were true.



    I'd say they where very accurate indeed. In fact Apples switch to Intel caused me to take interest again in the hardware. Previous to that I would run Linux on Intel or AMD hardware. Notably the very quick change to Core 2 Duo made a big difference too. For the most part Apples Intel hardware is now a 64 bit platform. That means Apple has very little to worry about as far as backward compatibility goes.



    In any event the biggest joke, for outsiders, where Apples benchmarks. It was rather pathetic the way the G5 benchmarks where gobbled up by the Mac users. Worst was that Apple did publish the integer benchmarks but nobody seemed to really notice or cared. The RDF was string back then.





    Dave
  • Reply 16 of 52
    mj webmj web Posts: 918member
    AMD's CPUs can't compete with Intel's on a price/performance basis, today. But prior to Core2Duo, Athlon wiped the floor with Pentium forcing Intel to compete using price incentives. The FTC is lodging this case 6 years too late IMHO and that negates the case's validity.



    On another note I expect Intel will buy nVidia in 2010.
  • Reply 17 of 52
    djrumpydjrumpy Posts: 1,116member
    Quote:
    Originally Posted by wizard69 View Post


    At the time of the switch PPC processors sucked royally. The only time there was a performance advantage was when Alt-Vec could be used. Even then a pathetically slow I/O bus was a big problem. The G5 only slightly resolved these issues and it's integer performance was terrible in comparison to other offerings.



    About that integer performance, it is a critical consideration with respect to overall performance. The OS does very little with FP for general house keeping.





    I'd say they where very accurate indeed. In fact Apples switch to Intel caused me to take interest again in the hardware. Previous to that I would run Linux on Intel or AMD hardware. Notably the very quick change to Core 2 Duo made a big difference too. For the most part Apples Intel hardware is now a 64 bit platform. That means Apple has very little to worry about as far as backward compatibility goes.



    In any event the biggest joke, for outsiders, where Apples benchmarks. It was rather pathetic the way the G5 benchmarks where gobbled up by the Mac users. Worst was that Apple did publish the integer benchmarks but nobody seemed to really notice or cared. The RDF was string back then.





    Dave



    So were the PowerPC benchmarks inflated somehow? I just recall seeing a comparison of basic boot speed. One with Intel and the other on legacy hardware. The Intel blew the legacy away. It didn't show day to to use however (understandable as that would be like watching paint peel via a youtube video , and I haven't seen any direct benchmark comparisons other than what was posted in here.



    I'm genuinely curious.
  • Reply 18 of 52
    djrumpydjrumpy Posts: 1,116member
    Quote:
    Originally Posted by MJ Web View Post


    AMD's CPUs can't compete with Intel's on a price/performance basis, today. But prior to Core2Duo, Athlon wiped the floor with Pentium forcing Intel to compete using price incentives. The FTC is lodging this case 6 years too late IMHO and that negates the case's validity.



    On another note I expect Intel will buy nVidia in 2010.



    I have to agree here. A lot of damage has already been done. Are there any viable competitors left besides AMD? Hopefully it's not too late. Looks at what happened when AMD stepped in. Intel had to shit or get out of the house and everyone benefited.



    Disappointing as to what's going on with nVidia.
  • Reply 19 of 52
    Quote:
    Originally Posted by MJ Web View Post


    AMD's CPUs can't compete with Intel's on a price/performance basis, today. But prior to Core2Duo, Athlon wiped the floor with Pentium forcing Intel to compete using price incentives. The FTC is lodging this case 6 years too late IMHO and that negates the case's validity.



    On another note I expect Intel will buy nVidia in 2010.



    I don't expect Intel to buy nVidia. I don't know why but I just don't.



    The Core2Duo shook up AMD's world, but they are recovering. AMD is finally on the same 45 nm process as Intel (although Intel is close to another die shrink). AMD spinning off its fabrication to Abu Dhabi investors was also an excellent move. They are finally turning a profit.



    I would disagree that right now Intel is winning all fronts on price/performance. AMD's acquisition of ATi is starting to pay off, and its processor/GPU power management in notebooks is pretty decent.



    Also, AMD is still an excellent low cost solution. AMD will let you keep your same socket for much longer than Intel. Their on die memory controllers were an advantage until Nehalem, and soon AMD will be placing GPUs on die as well, something that Intel can't touch.



    The thing about AMD is that they have to pick and choose their battles of where to compete.



    It's also nice that ATi happens to be kicking the pants off nVidia right now.



    As far as this lawsuit, it's absolutely merited and at the very least I predict that Intel will have a very large settlement on their hands. Their tactics during the Athlon 64 vs. Pentium 4 days had to be illegal.



    Really the only reason to buy Intel is if you are shopping the very high end. I'm guessing their server chips are still much better as well, but AMD's price and socket compatibility advantage is still there.



    Your average Joe computer user can't tell the difference between a cheaper AMD and a more expensive Intel.







    Yeah, okay, I am ranting and coming off as quite an AMD fan. That was intended
  • Reply 20 of 52
    Quote:
    Originally Posted by Applecation View Post


    I have a G5 PowerMac, that is just now starting to feel a little old. Not for the speed, but due to applications coming out for Intel only.

    The PowerPC G5 was a very powerful processor for its time. Look at these benchmarks from MacWorld. The first is the G5 2.3GHz Dual tests from back in 2005:

    SpeedMark4 (bigger is better) - 224

    PhotoShop CS2 test (less is better) - :59

    Cinema 4D render test (less is better) - 1:13



    Here is an iMac Core 2 Duo 2.4 GHz from last year (note that the software versions are not the same, for whatever difference that might make)

    SpeedMark5 - 230

    PhotoShop CS3 test - 1:02

    Cinema 4D render test - :54



    As you can see, these two machines, three years apart, have almost identical performance characteristics for these three tests.



    The continued performance of my G5 has made me hesitate to upgrade. My experience with my family's Macs (MacBook and iMac) have not shown any obvious speed differences to me in everyday use. The one issue I am starting to run into is updating purchased software, only to find the upgrade is Intel-only. That frustration will lead me to upgrade my machine in the next year.



    Sorry but the reason for the switch wasn't benchmarks as much as it was efficiency. That iMac you benchmarked probably uses 1/3 or less the power of the G5, and the PPC chip was hitting a ceiling so that the yearly gains were getting less & less.



    If anything these tests you present appear to confirm that there isn't really a chip advantage for the PPC, that the Intel chip really can accomplish the same level of performance. Both are 64bit chips, one is 2.3GHz Dual & the other 2.4GHz Dual. A 2.4GHz Xeon and a 2.4GHz Core2 are going to have some big performance differences too, just like our Xeon PC servers can blow the pants off even a higher clocked Desktop computer.



    In summary, that really wasn't a good comparison, age really isn't a factor when you're talking about raw specs of 2 computers.
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