Nvidia's Huang chimes in on FTC's Intel suit

— 9:32 AM on December 17, 2009

In case you missed the big news, the Federal Trade Commission sued Intel yesterday for anti-competitive behavior. The suit covers some of the same ground as complaints from previous regulatory bodies—namely that Intel coerced PC vendors into limiting their use of competing microprocessors—but it treads new ground by claiming Intel's unlawful activities extend into the GPU market.

Nvidia CEO Jen-Hsun Huang sent out a long memo to his employees about the subject yesterday, and the guys at CNet News have relayed it for everyone to see. The memo sums up the FTC's charges and delivers some pep talk, but it also includes this tasty nugget:

Intel is fully aware that great graphics have become one of the most important features for consumer PCs, the fastest-growing segment of the PC market. Even more alarming to Intel is the revolutionary parallel computing technology in our GPUs that is being adopted by software developers across the world. The more successful we became, the bigger threat we were to Intel's monopoly. Instead of creating competitive GPU solutions and competing on the merits of their products, Intel has resorted to unlawful acts to stop us. The FTC announced today that this isn't acceptable.

To what unlawful acts is Huang alluding? CNet News put together another story delving deeper into the matter. Reportedly, the FTC complaint looks at Intel's pricing of Atom processor and chipset bundles in particular—something Nvidia publicly complained about in May. At the time, Huang said Intel charged $45 for Atom CPUs but only $25 for Atom CPU and chipset bundles, making it harder for Nvidia to market its Ion integrated graphics chipset. Intel CEO Paul Otellini later stated about the topic, "We have historically offered better pricing to people that buy more products. Nothing new there."

CNet quotes the FTC's complaint as saying, "To combat [Atom] competition, Intel charged [PC makers] significantly higher prices because they used a non-Intel graphics chipset or GPU. Intel would offer the bundled pricing only to OEMs that would then use the Intel chipset in the end product--and not use a competitive product."

The FTC's focus on GPUs may have another angle to it, though. As part of its settlement with Intel last month, AMD agreed to "withdraw all of its regulatory complaints worldwide," so it's probably not going to turn around and testify against Intel for the FTC. On top of that, George Mason University law school professor (and former FTC scholar) Joshua D. Wright told CNet, "It would be really hard to sell the public on expending resources to take Intel through administrative proceedings when it had already paid over a billion dollars to AMD."

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