A Collaboration with the University of Pittsburgh

Intel settles anticompetitive conduct suit with FTC

The Federal Trade Commission (FTC) [official website] settled [press release; decision, PDF] its lawsuit [case materials] against Intel [corporate website] on Wednesday, with the industry-leading microchip maker agreeing to a set of conditions designed to facilitate fairer competition from competitors such as Advanced Micro Devices (AMD) and Nvidia [corporate websites]. The FTC originally filed suit alleging violations of Section 5 of the Federal Trade Commission Act [text, PDF], which punishes a broad scope of anticompetitive actions. Intel was accused [complaint] of engaging in a number of anticompetitive practices, including employing retalitory measures against hardware partners who purchased properties from competing chip makers and using its large market presence to perpetuate a monopoly over the central processing unit (CPU) market for its x86 CPU platform. FTC chairman Joe Leibowitz praised the settlement as producing a swifter and farther-reaching effect on the consumer chip market than seeing the case through litigation likely would have:

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. 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.

The terms of the agreement encompass Intel's activities in the CPU, graphics processor (GPU) and proprietary chipset markets. In addition to constraining Intel from using its market stature to coerce its partners' other business deals, the agreement also forces the company to restructure its intellectual property agreements with several hardware manufacturers to allow them to move more freely in the market, and to disclose to programmers that its developer-issued CPU programming software may not permit them to utilize performance-enhancing features of competitors' CPUs. Intel senior vice president and general counsel Doug Melamed emphasized that the company has admitted no wrongdoing [press release] in the settlement and said it allows Intel to "put an end to the expense and distraction of the FTC litigation."

The government originally filed suit [JURIST report] against Intel in December 2009. The settlement follows a similar suit [JURIST report] filed in November 2009 by the New York Attorney General [official website], alleging that the microprocessor manufacturer engaged in illegal conduct to further its dominance in the marketplace. Attorney General Andrew Cuomo claims that many of the company's agreements were deliberately aimed at disadvantaging AMD, Intel's primary competitor in the CPU market. Also in November of last year, Intel agreed to settle [JURIST report] all of its outstanding legal issues with AMD with a $1.25 billion payout.

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.