When It Rains, It Pours!

It’s more than a slogan for a salt company. It’s an old saw that means when bad things happen, they tend to come in droves.

That could be the forecast for Intel, as we have news that the Federal Trade Commission might jump on the dogpile that is forming on Intel. The suit expected to come is said to parallel the one filed by AMD in 2005 and may be huge in its scope.

I think we have more than enough information to see that at least some of what is alleged will be proven. Think back, if you will, and try to remember without any lenses or filters of any kind, the landscape of computing in 2003 – mid 2005. AMD clearly had the best performing chips, both on the desktop and on the server. It was being heralded as amazing by the press, and everyone, including AMD, was awaiting the huge adoption of AMD chips for that iteration of the upgrade cycle.

It never really happened, and in a market where performance always trumps any sort of loyalty that was very strange.  Remember, just as has happened now, with the Core2 architecture, back then the K8 architecture was massively faster than anything from Intel, along with being more efficient. AMD should have zoomed to at least 35% of the entire market,

A story from the same author that I quoted on the New York AG’s suit, from ComputerWorld fleshes out this story a bit more -

With New York filing antitrust charges against Intel Corp. this week, industry watchers say the Federal Trade Commission will join the fray against the chip maker, maybe even before the end of the year.

N.Y. Attorney General Andrew Cuomo leveled the state’s suit against Intel on Wednesday, adding one more log on the legal pile for Intel, which has been dealing with related legal issues in the U.S., Europe, Japan and Korea.

This latest suit piggybacks on a lawsuit filed by Intel’s biggest rival, AMD, in U.S. District Court in 2005, and expected to go to trial this coming spring.

But industry analysts say if the FTC launches its own legal attack against Intel, it will be a whole new ball game for the chip company.

“It wouldn’t surprise me to see the FTC jump into the fight with an antitrust action of their own against Intel, if only so that they don’t look like they’re being lazy in the face of actions from the European Union and now New York,” said Dan Olds, principal analyst with The Gabriel Consulting Group.

“If this happens, it could result in a very long, drawn out legal battle that could make WWI trench warfare seem quick and efficient by comparison,” he said.

Rumors started circulating on Wednesday that Cuomo’s office had been in talks with the FTC before it filed its own charges this week.

John Balto, a former policy director at the FTC and currently a senior fellow at the Center for American Progress, told Computerworld that the FTC has been working long and hard on a case against Intel. He contends the FTC probably will seek an injunction against the company, and that there’s a good chance it would come in the next few months.

The article continues with the statement that when the FTC jumps into the fray, it’s time for Intel to worry. The problem is likened to a suit that took nearly 13 years in the last century nearly breaking the back of IBM in the process.

Though the impetus from the suit might seem to come from the past, the quoted person, John Balto, states that it comes instead from what is to be avoided in the future.

“The New York case is a case about the past,” Balto said. “The FTC case will be a case about the future. It will be focusing on dynamic competition, the impact on innovation, on how Intel’s conduct … is going to harm competition and consumers in the future, stifling the ability of new rivals to emerge…”

“It will take Intel’s case from a whole different perspective and bring a whole new dimension of concerns,” he said.

Rob Enderle, an analyst with the Enderle Group, said he thinks Cuomo timed the New York suit so it would precede the FTC’s own action.

“I doubt [New York] would do this if they weren’t pretty certain the FTC was going to act relatively soon,” added Enderle. “My guess is they are just trying to grab the spotlight before the FTC, which has more money, gets it.

Hillard Sterling, an antitrust attorney at law firm Freeborn & Peters LLP, also sees New York’s lawsuit as a signal that the federal government will be taking action soon. He said that if the government gets involved, other defendants may be quick to jump on the bandwagon and try to take advantage of an Intel under siege.

The main takeaway here is that the Intel position is really untenable, in that it clearly did do things to stifle competition from AMD, and anyone else for that matter. No amount of Intel fanboy whining can make that go away. It is not a question of current performance, for the “i” series processors are clearly superior to anything AMD currently has, but one of what might have been, had AMD not been put on the ropes by unsavory means, and brought to the point where many wondered if the company could continue.

Now, with AMD still in a tremendous money crunch, it might not be able to take full advantage of the drag this will put on Intel, but, on the other hand, nVidia might possibly be able to open that can of ‘whoop-ass’ that the company’s head spoke about a while back. nVidia you see, for all of the troubles it is supposedly experiencing, is doing quite well financially, and those rumors of a CPU could not only be true, they could be game changing.

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Bachelors should be heavily taxed. It is not fair that some men should be happier than others. Oscar Wilde

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