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http://www.eetimes.com/electroni ... ictions-in-FTC-deal
ntel escapes fine, agrees to restrictions in FTC deal
Dylan McGrath
8/4/2010 11:01 AM EDT
SAN FRANCISCO -- As expected, the U.S. Federal Trade Commission on Wednesday (Aug. 4) made public details of its settlement agreement with Intel Corp. over charges that Intel used anticompetitive tactics that stifled innovation and harmed consumers in the market for computer microprocessors, graphics processing units and chip sets.
Intel (Santa Clara, Calif.) was not fined under the deal. Terms of the settlement include numerous provisions similar to those agreed to by Intel in a November 2009 settlement with rival Advanced Micro Devices Inc.
Dean McCarron, principal of market watcher Mercury Research, noted that the settlement with the FTC offered a significantly different outcome for Intel than what occurred in Europe in 2009, when the European Commission, the regulatory arm of the European Union, fined Intel 1.06 billion euros ($1.45 billion) for anticompetitive behavior. Intel continues to appeal that ruling.
"I suspect that one of the factor shere was the AMD settlement," McCarron said. "In many respects the FTC settlement is echoing what was in the AMD settlement, which was on par with the settlement that occurred in Europe."
McCarron said he didn't see a lot of winners and losers in the agreement, which he desicribed as "codifying the status quo."
“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,” Doug Melamed, Intel senior vice president and general counsel, said in a statement. “The settlement enables us to put an end to the expense and distraction of the FTC litigation.”
Intel admitted no wrong doing as a condition of the settlement. The deal approved by the FTC is subject to 30 days of public comment and final approval by FTC commissioners.
Among other things, Intel agreed not to offer discounts on microprocessors in exchange for agreement to also purchase other Intel chips such as graphics processors. The settlement also imposes other restrictions on the types of discounts Intel can offer OEMs.
Intel also agreed not to use retaliatory tactics against OEMs that buy products from competitors and to use a standard PCI bus on all mainstream microprocessors. It also will begin sharing technical information on required interfaces for its microprocessors with competitors for a period of five years.
McCarron said he was little surprised by some of the technical details in the settlement, including the requirement that Intel include PCI Express (PCIe) interfaces in its microprocessors. He said he suspects this was heavily lobbied for by graphics chip vendor Nvidia Corp., one of the Intel competitors considered in the FTC investigation.
"The settlement essentially guarantees that PCIe is going to be present within the system for at least six years," McCarron said. "That means Nvidia is going to have a place to connect their graphics. They can't be locked out this way."
McCarron noted that Nvidia and Intel still have litigation pending over a bus licensing agreement between the two companies that would not be impacted by the FTC settlement.
A spokesperson for Nvida said the company supports the FTC's action against Intel. "Any steps that lead to a more competitive environment for our industry are good for the consumer," the spokesperson said, in a prepared statement. "We look forward to Intel's actions being examined further by the Delaware courts later this year, when our lawsuit against the company is heard."
The settlement gives regulators the right to appoint technical consultants to monitor Intel's compliance at Intel's expense. It also requires Intel to offer reimbursement on Intel Compiler to those who were harmed because they did not realize the software was optimized specifically for Intel processors.
Requires inclusion of PCIe
Under the terms of the settlement, Intel cannot enter into agreements or enforce existing agreements with OEMs that require the OEMs to purchase chips exclusively from Intel in any geography or market segment, or requires OEMs to refuse to purchase or delay purchase of products from Intel competitors. This precludes Intel from offering discounts on microprocessors or threatening legal action against OEMs for not purchasing other chips such as graphics processors from Intel.
Intel may continue to offer discounts to customers on parts in excess of a specified unit volume threshold, but the company may not offer a volume discounted price to OEMs on all parts contingent on total sales being above a specified threshold.
The terms of the settlement also specify that Intel may not deny an OEM the ability to market its products as having "Intel Inside," in the event that, for example, the product also includes graphics processors from Nvidia. The settlement also prevents Intel from withholding marketing dollars from OEMs that include competitors' products.
Intel agreed that it will include in each of its mainstream microprocessor platforms an interface to a standard PCI bus. Intel also agreed not to design any required interface for the purpose of intentionally limiting the performance of a graphics processor that would make it non-complaint with the applicable PCIe base specification. The presence of bugs or errata that would make any product non-complaint with the relevant PCIe specification will not except the company from the latter requirement, according to the settlement.
Under the terms of the settlement, Intel must also offer to amend its patent agreements with AMD, Via Technologies Inc. and Nvidia that would allow them to disclose to customers and foundry suppliers its licensed rights to Intel patents, provided that the customer or foundry agrees to keep the information confidential. The settlement requires Intel to offer other specified amendments to patent agreements with Via.
McCarron of Mercury Research (Bee Caves, Ariz.) said that ironically it was probably Via, by far the smallest of the Intel competitors named in the investigation, that got the most out of the settlement deal. "They have x86 license, and that gets expanded [in the settlement] at no cost to them," McCarron said.
To offer reimbursements on Intel Compiler
Intel is also forbidden under the terms of the agreement from making any engineering or design change to its products if that change will degrade the performance of a relevant product sold by a competitor, nor any change that does not provide an actual benefit to the Intel product.
The settlement also requires Intel to ensure that any product roadmap it discloses is not intentionally inaccurate or misleading. It also requires Intel to, each year for the next four years, provide AMD, Via and Nvidia with a required interface roadmap for all mainstream microprocessor platforms it plans to introduce in the next five years.
Intel is also required to disclose to Intel Compiler customers within 90 days that Intel's compiler may not optimize to the same degree for non-Intel microprocessors for optimizations that are not unique to Intel microprocessors.
The settlement also requires Intel to set up Pro-Agram to reimburse Intel Compiler customers who were harmed by not knowing that the Intel Compiler did not provide the same optimizations for competitive microprocessors. This program can de terminated by Intel in two years or after $10 million in reimbursements has been distributed.
The settlement also requires Intel to make a uniform disclosure that the software and workloads in any benchmark testing may have been optimized for performance only on Intel microprocessors whenever the company makes a claim about microprocessor performance versus competitors. Intel is permitted to refer to its website for the full text of this disclosure rather than, for example, including the text in a television commercial.
The settlement gives the FTC authority to appoint technical consultants to monitor Intel's compliance with the settlement agreement. These technical consultants will be subject to Intel's approval and paid by Intel. The settlement requires that the technical consultants be given access to technical information on Intel products as well as other information like company personnel and finances. The total amount that Intel is required to pay for the 10-year duration of the FTC's order is limited to $2 million to all technical consultants.
Intel has made available the full FTC order through the company's website. |
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