FTC versus Intel - What Nvidia's CEO thinks about the situation
Leading chip maker Intel has been sued by the Federal Trade Commission for monopoly exploitation and use of anti competitive strategies. Nvidia CEO Huang thinks this lawsuit could transform the computer industry.
On December 16, 2009 the Federal Trade Commission pressed charges against Intel. The chip maker is said to have waged a systematic campaign to shut out rivals' competing microchips and to have used the position as the market leader to secure the monopoly. Furthermore the FTC accuses Intel to have used tactics to prevent customer access to potentially superior CPUs from Intel's competitors. You can find the full statement of the FTC on the official website. A hearing concerning the matter has been scheduled for September 15, 2010.
Of course Intel has reacted and published a statement in which the company claims to have acted lawfully and for the benefit of the customers. They accuses made by the FTC are regarded to be misguided. Read the statement published on Intel's website below:
"Intel has competed fairly and lawfully. Its actions have benefitted consumers. The highly competitive microprocessor industry, of which Intel is a key part, has kept innovation robust and prices declining at a faster rate than any other industry. The FTC's case is misguided. It is based largely on claims that the FTC added at the last minute and has not investigated. In addition, it is explicitly not based on existing law but is instead intended to make new rules for regulating business conduct. These new rules would harm consumers by reducing innovation and raising prices."
Intel senior vice president and general counsel Doug Melamed added, "This case could have, and should have, been settled. Settlement talks had progressed very far but stalled when the FTC insisted on unprecedented remedies - including the restrictions on lawful price competition and enforcement of intellectual property rights set forth in the complaint -- that would make it impossible for Intel to conduct business."
"The FTC's rush to file this case will cost taxpayers tens of millions of dollars to litigate issues that the FTC has not fully investigated. It is the normal practice of antitrust enforcement agencies to investigate the facts before filing suit. The Commission did not do that in this case," said Melamed.
It is clear that such a big incident causes a lot of interest in the media and industry. Just recently Nvidia's CEO, Jen-Hsun Huang, addressed a statement to the Nvidia employees in which he dealt with the action against Intel. According to a transcript of the statement that has been leaked to the internet Huang wrote that this proceeding against Intel can completely transform the computer industry. As expected the Nvidia boss sides with the TFC, but also says that it will take a long time before a solution is achieved. Below you can find the full transcript of the letter Mr. Huang has directed to the Nvidia staff.
The U.S. government announced today that it has filed an antitrust lawsuit against Intel. This is an action the industry needs and one that consumers deserve. And it's one that can completely transform the computer industry.
The facts are clear. The FTC has charged that Intel has used its monopoly illegally to stifle innovation, to keep prices for their products inflated, and to unfairly block competitors. The FTC believes that millions of consumers have paid more and received less quality in return - and that companies and their employees have been forced out of markets where Intel has been threatened.
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.
Nothing this complicated gets decided quickly. It will take months for the FTC case to be heard by an administrative judge who then recommend a ruling back to the FTC. And it's possible that this decision could be appealed. But today is a huge step forward for all of us that will begin to re-level the playing field.
Today's FTC announcement highlights the industry-changing impact of the GPU and the importance of our work. Our innovation is making the PC magical and amazing again. I can now imagine the day when Intel can no longer block consumers from enjoying our creation and experience computing in a way we know is possible.
what do you think about Intel being sued over illegal market strategies? Did the chip maker misuse the position as a market leader to drive competition out of business? Write a comment and give your opinion.
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