Under FTC Settlement, Intel Will Quit Using Carrots, Sticks

At long last, Intel’s antitrust tangle with the Federal Trade Commission is over. The company today inked a settlement with the
FTC resolving charges that it illegally stifled competition in the chip market.

Without admitting any wrongdoing, Intel (INTC) agreed to a set of provisions intended to prevent it from abusing its market position. Specifically, the settlement prohibits Intel from offering rebates and discounts to PC makers to dissuade them from using rivals’ chips. It also forbids the company from retaliating against PC makers who do choose to use competitors’ chips.

One thing it doesn’t do: Levy a fine, since the FTC lacks the authority to impose a financial penalty on a company that abuses its monopoly position. Welcome news for Intel, which has already paid out about $2.7 billion in settlements and fines to end AMD’s and the European Union’s antitrust cases against it.

“Intel is a great American success story, and we want that to continue,” FTC Chairman Jon Leibowitz said this morning. “The conduct documented in our investigation happened in the past. This settlement will allow Intel and the marketplace to move forward….Today’s settlement gives certainty to all of those in the industry–including, by the way, Intel–and clarifies the rules of the road. We believe we’re going to see, or begin to see, a more competitive landscape very, very soon.”

Intel’s settlement with the FTC might offer certainty to all those in the industry, but not satisfaction. The company still faces a lawsuit brought against it by Nvidia, which was quick to remind everyone of that fact.

“Nvidia supports the FTC’s action to address Intel’s continuing global anticompetitive conduct,” the company said in a statement. “Any steps that lead a more competitive environment for our industry are good for the consumer. 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.”