Thursday, 5 August 2010

Intel And FTC Settle Antitrust Suit

Intel has settled their antitrust suit with the Federal Trade Commission, stemming from anti-competitive practices. Under terms of the deal, Intel will be prohibited from:
* Offering benefits to computer makers in exchange for promises to buy Intel chips exclusively or cutting out others.
* Retaliating if a PC maker goes with another chip maker.
Intel is also required to do the following:
* Modify its intellectual property agreements with AMD, Nvidia and Via so they can merge without being sued for patent infringement.
* Extend Via’s licensing agreement for five years beyond the current deal that ends in 2013.
* Maintain the PCI Express Bus interface for at least six years so it won’t harm graphics competitors.
* Disclose when Intel compilers discriminate between Intel chips and non-Intel chips."
This is great news for consumers and gamers. Intel's practices led to a tilted playing field that shut out other competitors and led to a near-monopoly of the CPU and GPU markets, which would inevitably lead to higher prices across the board. The decision to force Intel to maintain the PCI Express Bus for six more years will not only allow more choice for gamers who want powerful additions to their desktop PCs, but also allows the market for top-end graphics cards to remain stable, without necessitating the move to the "next big thing" at a high premium cost.

This is also good news for other manufacturers, though it's hard to feel sympathy for them.

As for Intel, this is an unequivocal disaster. Not only were they caught with their pants down, but now they have to effectually support their competitors's in the market. This couldn't have gone worse for Intel, and their settling in this case shows that they didn't think they had a legal leg to stand on.

For further reading on this, check out Charlie Demerjian's article here.

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