Intel settlement bans anti-competitive practices

“[Intel] stepped well over the line and
moved beyond aggressive competition on the merits into the realm of
unfair, deceptive and anti-competitive conducts,” Leibowitz said. He said
the agreement “ensures Intel can’t come up with new ways to undermine
competition.”

The agreement, which was unanimously approved by the
FTC, is subject to a 30-day public comment period and final approval by
the Commission. 

“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,” said Doug Melamed, Intel senior vice president and general
counsel. “The settlement enables us to put an end to the expense and
distraction of the FTC litigation.”

The FTC also accused Intel of configuring its products to make them
perform worse when used with competitors’ chips, then deceptively
attributing the performance shortfalls to competitors. The
settlement also prohibits a variety of pricing practices that the FTC
alleges were more focused on inducing computer makers not to deal with
Intel’s competitors.

Richard Feinstein, director of the FTC’s Bureau of Competition, said
the settlement goes farther than other recent civil and international
cases against Intel because its goal is to promote open competition
rather than benefit one particular competitor — in this case, AMD. He said
the prohibitions on various commercial practices and specific pricing
policies are much broader than in previous settlements.

Intel is considered a monopoly, with more than 70 percent of the CPU market
in the United States. While the FTC does not have authority to fine the company
for monopolistic violations, the company faces a penalty of $16,000
every time it violates the terms of the settlement going forward. 

As
part of the agreement, Intel also agreed to support the PCI Bus, an
industry standard connection to its CPU, for the next six years.