Intel Gets the Antitrust Silicon Slab Slam by the FTC

Last Updated Aug 4, 2010 1:19 PM EDT

The Economist mused about the end of the rule of Wintel -- the combination of Microsoft (MSFT) and Intel (INTC) that ruled personal computing for decades. This morning, the FTC announced an antitrust agreement with the chip maker that pretty much guarantees that fate.

As I've been saying for years, the high tech industry has acted as though regulations didn't apply to it. Such companies as Intel, Apple (AAPL), and Google (GOOG) have effectively begged regulators to take their best shot. The European Union has already started on both Intel and Google. Various bodies in the US have looked at all three.

I'd have included Microsoft in the list, except it's already been through the wringer, and, over the next few years, these other companies will learn what it's like. Intel is just first in line, and the implications of the settlement are significant. Forget fines that mean little to cash flush corporations. Even the $1.45 billion levied against Intel by the EU has nothing on what the company has just had agree to do and avoid, according to the FTC:

  • "[refrain from] conditioning benefits to computer makers in exchange for their promise to buy chips from Intel exclusively or to refuse to buy chips from others" and "retaliating against computer makers if they do business with non-Intel suppliers by withholding benefits from them"
  • "modify its intellectual property agreements with AMD, Nvidia, and Via so that those companies have more freedom to consider mergers or joint ventures with other companies, without the threat of being sued by Intel for patent infringement"
  • "offer to extend Via's x86 licensing agreement for five years beyond the current agreement, which expires in 2013"
  • "maintain a key interface, known as the PCI Express Bus, for at least six years in a way that will not limit the performance of graphics processing chips. These assurances will provide incentives to manufacturers of complementary, and potentially competitive, products to Intel's CPUs to continue to innovate"
  • "disclose to software developers that Intel computer compilers discriminate between Intel chips and non-Intel chips, and that they may not register all the features of non-Intel chips. Intel also will have to reimburse all software vendors who want to recompile their software using a non-Intel compiler"
None of this is window dressing (pardon the pun). The FTC's actions go straight to the heart of strategies that Intel has used for years to gain advantage over and above what manufacturing scale and technical features and innovation provide.

Even more than taking pressure off direct competitors, the FTC has unshackled PC manufacturers, which have already begun integrating new chips and operating systems into their product portfolios. Given the general direction of technical development, you can also expect that after the six years this seems to be in play, technology will have changed enough to permanently trip Intel's dominance. And the coming years are going to bring similar results to the high tech industry.


Image: Flickr user Vishal Somaiya, CC 2.0.
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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.