UPDATED 13:56 EDT / AUGUST 04 2010

Intel Settles with FTC, Shifting Gears for Mobile Tablet Distribution

The Federal Trade Commission has settled with Intel for the chip-maker to revise some of its business practices. The result is a shift in dominance and methods around the competitive nature of the chip manufacturing and marketing business.

First brought forward in December of last year, the FTC’s suit outlined several areas Intel could no longer restrict or hinder competition. Intel can no longer pay customers for exclusivity with its computer chips, or redesign its chips for the sole purpose of harming a competitor. The settlement also requires Intel to launch a $10 million fund towards the development of chips from competitors that have been downtrodden by Intel’s monopoly.

Intel will also have to lay low on patent infringement lawsuits against other chip makers, and maintain for at least six years a non-limiting feature for performance of graphics processing chips made by other manufacturers. There is actually a rather long list of stipulations the FTC has brought, breaking up Intel’s decade-long reign.

The FTC issued the following statement:

This case demonstrates that the FTC is willing to challenge anticompetitive conduct by even the most powerful companies in the fastest-moving industries,” said Chairman Jon Leibowitz. “By accepting this settlement, we open the door to competition today and address Intel’s anticompetitive conduct in a way that may not have been available in a final judgment years from now. Everyone, including Intel, gets a greater degree of certainty about the rules of the road going forward, which allows all the companies in this dynamic industry to move ahead and build better, more innovative products.”

Intel went on to say that it will be modifying its strategies and areas of focus, developing more chips and processors for the medical and science research fields. Perhaps the FTC settlement was another blow for Intel, as it loses ground to ARM chip makers in the mobile device arena.

Intel has left a deal with Taiwan Semiconductor Manufacturing (TSMC) on the table for several months now, making slow strides towards indirect growth in that market. As Intel still has major deals with PC makers, the company isn’t in fear of losing too much of the market any time soon. A deal with Microsoft, for instance, will offer Intel a similar positioning as ARM has with Google Android mobile devices.


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