Intel Corporation; Analysis of Proposed Consent Order to Aid Public Comment, 48338-48346 [2010-19694]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 75, Number 153 (Tuesday, August 10, 2010)]
[Notices]
[Pages 48338-48346]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-19694]


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FEDERAL TRADE COMMISSION

[Docket No. 9341]


Intel Corporation; Analysis of Proposed Consent Order to Aid 
Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the complaint and 
the terms of the consent order -- embodied in the consent agreement -- 
that would settle these allegations.

DATES: Comments must be received on or before September 7, 2010.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``Intel, 
Docket No. 9341'' to facilitate the organization of comments. Please 
note that your comment -- including your name and your state -- will be 
placed on the public record of this proceeding, including on the 
publicly accessible FTC website, at (https://www.ftc.gov/os/publiccomments.shtm).
    Because comments will be made public, they should not include any 
sensitive personal information, such as an individual's Social Security 
Number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. Comments also 
should not include any sensitive health information, such as medical 
records or other individually identifiable health information. In 
addition, comments should not include any ``[t]rade secret or any 
commercial or financial information which is obtained from any person 
and which is privileged or confidential. . . .,'' as provided in 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which 
confidential treatment is requested must be filed in paper form, must 
be clearly labeled ``Confidential,'' and must comply with FTC Rule 
4.9(c), 16 CFR 4.9(c).\1\
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    \1\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 
4.9(c).
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    Because paper mail addressed to the FTC is subject to delay due to 
heightened security screening, please consider submitting your comments 
in electronic form. Comments filed in electronic form should be 
submitted by using the following weblink: (https://ftcpublic.commentworks.com/ftc/intel/) and following the instructions 
on the web-based form. To ensure that the Commission considers an 
electronic comment, you must file it on the web-

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based form at the weblink: (https://ftcpublic.commentworks.com/ftc/intel/). If this Notice appears at (https://www.regulations.gov/search/index.jsp), you may also file an electronic comment through that 
website. The Commission will consider all comments that regulations.gov 
forwards to it. You may also visit the FTC website at (https://www.ftc.gov/) to read the Notice and the news release describing it.
    A comment filed in paper form should include the ``Intel, Docket 
No. 9341'' reference both in the text and on the envelope, and should 
be mailed or delivered to the following address: Federal Trade 
Commission, Office of the Secretary, Room H-135 (Annex D), 600 
Pennsylvania Avenue, NW, Washington, DC 20580. The FTC is requesting 
that any comment filed in paper form be sent by courier or overnight 
service, if possible, because U.S. postal mail in the Washington area 
and at the Commission is subject to delay due to heightened security 
precautions.
    The Federal Trade Commission Act (``FTC Act'') and other laws the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding as appropriate. The Commission will 
consider all timely and responsive public comments that it receives, 
whether filed in paper or electronic form. Comments received will be 
available to the public on the FTC website, to the extent practicable, 
at (https://www.ftc.gov/os/publiccomments.shtm). As a matter of 
discretion, the Commission makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC website. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy, at (https://www.ftc.gov/ftc/privacy.shtm).

FOR FURTHER INFORMATION CONTACT: Richard Feinstein (202-326-3658), 
Bureau of Competition, 600 Pennsylvania Avenue, NW, Washington, D.C. 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  3.25(f) 
the Commission Rules of Practice, 16 CFR 3.25(f), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for August 4, 2010), on the World Wide Web, at (https://www.ftc.gov/os/actions.shtm). A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington, 
D.C. 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. All comments should be filed as 
prescribed in the ADDRESSES section above, and must be received on or 
before the date specified in the DATES section.

Analysis of Agreement Containing Consent Order to Aid Public Comment

    The Federal Trade Commission (``Commission'' or ``FTC'') accepted 
for public comment an Agreement Containing Consent Order (``Proposed 
Consent Order'') with Intel Corporation (``Intel'') to resolve an 
Administrative Complaint issued by the Commission on December 16, 
2009.\2\ The Complaint alleged that Intel unlawfully maintained its 
monopoly in the relevant CPU markets, and sought to acquire a second 
monopoly in the relevant graphics markets, using a variety of unfair 
methods of competition. Consumers were harmed by Intel's conduct, which 
resulted in higher prices, less innovation, and less consumer choice in 
the relevant markets. Consumers were also harmed by Intel's deceptive 
disclosures related to its compilers, which violated both competition 
and consumer protection principles. The Proposed Consent Order will 
bring immediate relief in the relevant markets and puts Intel under 
Commission Order.
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    \2\ The Complaint was brought under Section 5 of the Federal 
Trade Commission Act, which ``was designed to supplement and bolster 
the Sherman Act and the Clayton Act [hellip] to stop in their 
incipiency acts and practices which, when full blown, would violate 
those Acts [hellip] as well as to condemn as `unfair methods of 
competition' existing violations'' of those acts and practices. 
F.T.C. v. Brown Shoe Co., 384 U.S. 316, 322 (1966) (quoting F.T.C. 
v. Motion Picture Adv. Serv. Co., 344 U.S. 392, 394-95 (1953)); see 
also F.T.C. v. Indiana Fed'n of Dentists, 476 U.S. 447, 454 (1986). 
In addition, the Commission has the jurisdiction under Section 5 to 
challenge ``unfair or deceptive acts or practices in or affecting 
commerce . . .''
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    As described in detail below, the Proposed Consent Order has two 
fundamental goals. First, it seeks to undo the effects of Intel's past 
restraints on competition by enhancing the ability of AMD, NVIDIA, Via, 
and others to compete effectively with Intel. To that end, the Proposed 
Consent Order seeks: 1) to make it easier for AMD, NVIDIA, and Via to 
use third-party foundries to manufacture products (to enable them to 
better match Intel's manufacturing advantages) (Section III.A.); 2) to 
give AMD, NVIDIA, and Via flexibility to secure modifications of change 
of control provisions in their Licensing Agreements with Intel (Section 
III.B); 3) to extend Via's intellectual property license (Section 
III.C); and 4) to provide assurances to manufacturers of complementary 
and peripheral products that they will be able to connect their devices 
to Intel's CPUs (Section II). These provisions compel Intel to make 
certain offers; they do not compel a third party to accept them. The 
goal is to require Intel to open the door to renewed competition, not 
to force a third party to take any particular action.
    Second, the Proposed Consent Order is designed to protect the 
ability of customers and existing and future Intel competitors to 
engage in mutually beneficial trade, while prohibiting Intel from using 
certain practices to deter or thwart such trade. The Proposed Consent 
Order therefore prohibits Intel from engaging in: 1) certain pricing 
practices that could allow Intel to exclude competitors while 
maintaining high prices to consumers (Section IV.A.); 2) predatory 
design that disadvantages competing products without providing a 
performance benefit to the Intel product (Section V); and 3) deception 
related to its product road maps, its compilers, and product 
benchmarking (Sections VI, VII, and VIII).
    The Proposed Consent Order is for settlement purposes only and is 
tailored to remedy the effects of Intel's specific conduct in the 
market context in which that conduct took place. The purpose of the 
Commission's Order is not punitive but rather remedial.\3\ Intel's 
adherence to the specific provisions will not insulate it from future 
Commission scrutiny or enforcement action if its conduct otherwise 
violates the antitrust laws. That is, the Proposed Consent Order does 
not operate as a safe harbor for Intel. The Commission can not only 
challenge (and seek civil fines for) Order violations, but also has 
authority to challenge any practice not prohibited by the Proposed 
Consent Order (including, but not limited to, any pricing practice or 
design change that harms competition) in a potential future legal 
challenge. The prohibitions and standards utilized in the Proposed

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Consent Order do not necessarily reflect the applicable legal standards 
under the Sherman Act, Clayton Act, or the FTC Act; indeed, the legal 
standards applicable to some of these practices remain unsettled by the 
Supreme Court and the federal courts of appeal. The Commission 
expressly reserves the right to challenge Intel's future 
anticompetitive conduct if it has reason to believe that, considered in 
context, the effect of Intel's conduct is to enable it to increase or 
maintain power over price, output, or non-price competition in any 
market in which it is a participant. Furthermore, the Commission has 
the authority to monitor and determine whether the Commission has 
reason to believe that Intel has not strictly complied with all of the 
provisions of this Proposed Consent Order (including, but not limited 
to, the obligation to negotiate a license in good faith after a change 
of control of AMD, NVIDIA, or Via). The Commission expressly reserves 
its right to exercise this authority as well.
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    \3\ As a general rule, the Commission's statutory authority is 
designed to remedy conduct going forward as opposed to punishing 
past conduct. For example, the Commission does not have the 
authority to levy fines for antitrust violations.
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    The Proposed Consent Order has been placed on the public record for 
30 days for comments. Comments received during this period will become 
part of the public record. After 30 days, the Commission will review 
the Proposed Consent Order and comments received and will decide 
whether it should withdraw from the Proposed Consent Order or make 
final the Order contained in the Agreement. The purpose of this 
analysis is to invite and facilitate public comment concerning the 
Proposed Consent Order.

1. The Commission's Complaint

    The Federal Trade Commission voted 3-0 to issue an Administrative 
Complaint against Intel on December 16, 2009. Intel is a Delaware 
corporation with its principal place of business in Santa Clara, 
California. Intel develops, manufactures, markets, and sells computer 
hardware and software products, including x86 CPUs and graphics 
processors. The Complaint alleged that Intel engaged in a course of 
conduct over a ten-year period that was designed to, and did, stall the 
widespread adoption of non-Intel products. That course of conduct 
allowed Intel to unlawfully maintain its monopoly in the relevant CPU 
markets through means other than competition on the merits and created 
a dangerous probability that Intel would acquire a monopoly in the 
relevant GPU markets.
    First, the Complaint alleges that Intel maintained its monopoly in 
the markets for x86 CPUs for desktops, notebooks, and servers, as well 
as smaller relevant markets, by engaging in a course of conduct that 
foreclosed or limited the adoption of non-Intel x86 CPUs. The CPU of a 
computer system processes data and controls other devices in the 
system, acting as the computer's ``brains.'' The x86 CPU architecture 
and instruction set is the industry standard for CPUs used in 
notebooks, desktops, workstations, and volume servers.\4\ The Complaint 
alleges a variety of relevant markets tied to the x86 CPU architecture 
including an overall x86 market. The non-x86 CPU alternatives did not 
constrain Intel's monopoly during the relevant time period.
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    \4\ There are a handful of alternative CPU architectures that 
are used in very high-end servers or handheld devices. However, 
these alternatives did not compete in the notebook, desktop, 
workstation, or volume server x86 CPU markets during the relevant 
time period.
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    Intel's only significant competitor in the relevant x86 CPU markets 
is AMD, based in Sunnyvale, California. AMD mounted serious challenges 
to Intel's position in 1999 when it released its Athlon x86 CPU and 
again in 2003 when it released its Opteron x86 CPU. The only other firm 
that sells x86 CPUs is a small Taiwanese firm, Via Technologies. A 
fourth firm, Transmeta, sold a small number of x86 CPUs in the notebook 
market but exited the market in 2006.
    Over the last decade, Intel's share of the overall x86 CPU market 
(desktop, notebook, and server) has consistently exceeded 65 percent; 
its share of the x86 CPU desktop market has consistently exceeded 70 
percent; and its share of the x86 CPU notebook market has consistently 
exceeded 80 percent. Intel's monopoly position in these markets is 
partially protected by significant barriers to entry, including 
reputation, scale economies, intellectual property rights, costs 
associated with building and operating large manufacturing facilities, 
and research and development costs. These legitimate barriers to entry 
make vigorous enforcement of the competition laws all the more 
important. The Proposed Order is designed to ensure that Intel cannot 
blunt entry and expansion by raising barriers in the relevant markets 
using means other than competition on the merits.
    Second, the Complaint also challenges Intel's unfair methods of 
competition in the Graphics Processing Unit (``GPU'', also referred to 
as ``graphics'') markets. GPUs originated as specialized processors for 
generating computer graphics. In recent years, GPUs have become 
increasingly sophisticated as computing graphics have grown in 
importance. GPUs have also evolved to take on more functionality. GPUs 
are increasingly performing computations traditionally performed by the 
CPU, allowing OEMs to use lower-end CPUs or fewer microprocessors for a 
given level of performance. As a result, GPUs are creating better 
products at lower prices for consumers.
    The graphics market is highly concentrated with high barriers to 
entry. Intel competes in the graphics market with NVIDIA and AMD/ATI. 
Intel makes and sells graphics processors that are either integrated 
into chipsets or directly onto the CPU. NVIDIA and AMD/ATI sell both 
graphics processors integrated into chipsets as well as discrete 
graphics cards. NVIDIA has been at the forefront of developing GPU 
functionality beyond merely graphics applications. The growth of 
NVIDIA's General Purpose GPU (``GP-GPU'') computing allegedly 
threatened to undermine Intel's x86 CPU monopoly. The Complaint alleges 
that Intel engaged in behavior, other than competition on the merits, 
to marginalize NVIDIA and slow the adoption of GP-GPU computing.

A. Unfair and Exclusionary Commercial Practices in the Relevant CPU 
Markets

    The Complaint alleges that Intel engaged in a variety of unfair 
methods of competition to foreclose or limit the adoption of non-Intel 
x86 CPUs by the world's largest original equipment manufacturers 
(``OEMs''). The largest original equipment manufacturers (``Tier One 
OEMs'') include Hewlett-Packard/Compaq, Dell, IBM, Lenovo, Toshiba, 
Acer/Gateway, Sun, Sony, NEC, Apple, and Fujitsu, which combined 
account for more than 60 percent of all personal computer sales and are 
the only suppliers qualified to fulfill certain needs of large business 
buyers. Tier One OEMs provide a crucial distribution channel for any 
manufacturer of CPUs, chipsets or GPUs. Tier One OEMs supply high 
volume sales with the concomitant substantially reduced distribution 
cost. In three respects, Intel's conduct foreclosed significantly non-
Intel x86 CPU suppliers from selling product to Tier One OEMs.
    First, Intel induced certain Tier One OEMs to forgo adoption or 
purchases of non-Intel CPUs. When Intel failed to prevent an OEM from 
adopting non-Intel CPUs, it sought to limit such purchases to a small 
percentage of the sales of certain computer products. The Complaint 
alleges, for example, that Intel entered into de facto exclusive 
dealing arrangements and market-share deals with those Tier One OEMs 
that agreed to limit their purchases of AMD or Via products. Tier One 
OEMs that

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purchased all or nearly all of their CPU requirements from Intel 
received large rebates and lump-sum payments from Intel, as well as 
guarantees of supply during supply shortages. In other cases, Intel 
paid Tier One OEMs not to sell computers with non-Intel CPUs, such as 
AMD's, Transmeta's or Via's CPUs. The Complaint alleges that these 
arrangements did not represent competition on the merits, were designed 
to minimize pass-through of rebates to consumers, and that Intel 
entered into these arrangements to block or slow the adoption of 
competitive products by the Tier One OEMs and thereby maintain its 
monopoly.
    Second, Intel threatened OEMs that considered purchasing non-Intel 
CPUs with, among other things, increased prices on other Intel 
purchases, the loss of Intel's technical support, and/or the 
termination of joint development projects.
    Third, Intel sought to induce OEMs to limit advertising and 
branding, and to forgo advantageous channels of distribution for 
computers that contained non-Intel CPUs. For example, Intel induced 
OEMs to forgo advertising, branding, certain distribution channels, 
and/or promotion of computers containing non-Intel CPUs. To secure 
these restrictive dealing arrangements with OEMs, Intel threatened to 
withhold rebates, technical support, supply, and/or to terminate joint 
development projects, among other things.
    These practices severely limited the number of instances in which 
OEMs selling non-Intel-based PCs competed directly against OEMs selling 
Intel-based PCs, especially in servers and in commercial desktops and 
notebooks. When an OEM selling Intel-based PCs competed against OEMs 
selling AMD-based PCs, Intel often had to sell CPUs at competitive 
prices. When such competition was eliminated, Intel could sell CPUs at 
supra-competitive prices. Consequently, it was able simultaneously to 
charge above-competitive prices and at the same time to exclude its 
rivals, resulting in both higher prices and fewer choices for 
consumers. In addition, Intel's retroactive quantity discounts were of 
a type that could readily disguise effective below-cost pricing, which 
would, under the circumstances, present a strong risk of predatory 
effects.
    This effectively allowed Intel to compete by raising the effective 
prices of AMD's and Via's products rather than lowering the effective 
prices of its own. It did this by effectively imposing a penalty on any 
customers who purchased from Intel's rivals. Intel's market share 
discounts and retaliatory practices described above all had this 
effect, constituting an effective increase to the rival's price. The 
end result was that Intel could make a rival's actual low prices look 
very costly to customers without Intel's needing to reduce its own 
prices or expand its own output.

B. Compiler and Benchmark Deception

    The Complaint alleges that Intel's failure to fully disclose the 
changes it made to its compilers and libraries beginning in 2003 
violated both competition and consumer protection provisions of Section 
5 of the FTC Act.
    A compiler is a tool used by software developers to write software. 
The compiler translates the ``source code'' written in high-level 
computer languages into 0's and 1's that can be run as software on 
consumers' computers. Intel's compilers compete with Microsoft's 
compilers, open-source compilers, and others. Intel's compiler is used 
by developers of high-performance applications.
    The Complaint alleges that AMD's Athlon CPU, released in 1999, and 
its Opteron CPU, released in 2003, equaled, and in some segments 
surpassed, Intel's technology. Intel introduced a new version of its 
compiler shortly before AMD released its Opteron CPU. The compiler 
features introduced by Intel in 2003 effectively slowed the performance 
of software written using Intel's compilers on non-Intel x86 CPUs such 
as Opteron. To the unknowing public, OEMs, and software vendors, the 
slower performance of non-Intel-based computers when running certain 
software applications was mistakenly attributed to the performance of 
non-Intel CPUs.
    The Complaint also alleges that the direct impact of Intel's 
deceptive disclosures was on independent software vendors and 
developers that used Intel's compiler to write software. They were 
unaware of the changes in the Intel compiler that would impact the 
performance of their software when it ran on non-Intel-based computers. 
The Complaint alleges Intel intentionally misrepresented the cause of 
the performance differences and whether it could be solved.
    Intel's deceptive disclosures related to its compiler redesign were 
compounded by the adoption of industry standard benchmarks that 
included software compiled using Intel's compiler. Benchmarks are 
performance tests that compare attributes of competing CPUs. Industry 
standard benchmarks are used by OEMs and consumers to judge performance 
of competing CPUs. Intel failed to disclose to benchmarking 
organizations the effects of its compiler redesign on non-Intel CPUs. 
Several benchmarking organizations adopted benchmarks that measured 
performance of CPUs by running software programs compiled using the 
Intel compiler. The software compiled using Intel's compiler skewed the 
performance results in Intel's favor. Intel promoted its systems' 
performance under such benchmarks as realistic measures of typical or 
``real world'' computer performance. The benchmarks were not accurate 
or realistic measures of typical computer performance and they 
overstated the performance of Intel's products as compared to non-Intel 
products.
    The Complaint alleges Intel's deceptive disclosures related to its 
compiler contributed to Intel's maintenance of its monopoly power. For 
example, AMD's CPU performance advantages were muted by Intel's 
compiler. Intel's deception distorted the competitive dynamic and 
harmed consumers. The Complaint also alleges that Intel's failure to 
disclose was a deceptive act or practice.
    Among the harms to consumers caused by Intel's deceptive conduct 
was the harm to the credibility and reliability of industry benchmarks. 
Industry benchmarks are important tools for consumers to make informed 
purchasing choices. Informed consumer choice is a basic building block 
of competition.

C. Unfair and Exclusionary Conduct to Suppress GPU Competition

    Intel worked with NVIDIA for a number of years to ensure that 
NVIDIA's GPUs could interoperate with Intel CPUs, and licensed NVIDIA 
to allow it to manufacture Intel-compatible chipsets with integrated 
graphics (also referred to as ``chipsets with integrated GPUs''). The 
Complaint alleges that Intel began to perceive NVIDIA as a threat in 
both the market for chipsets with integrated graphics and the market 
for CPUs. The Complaint further alleges that Intel took a number of 
actions to blunt the competitive threat posed by NVIDIA. For example, 
Intel denied NVIDIA the ability to produce integrated chipsets that 
would be compatible with Intel's next generation CPUs. In doing so, the 
Complaint alleges that Intel misled NVIDIA on Intel's ``roadmaps'' or 
product plans, causing NVIDIA to waste resources and crucial time 
researching and designing integrated chipsets when, in fact, Intel 
allegedly had no intention of permitting NVIDIA integrated chipsets to 
interoperate with Intel's next generation of x86 microprocessors. This 
increased NVIDIA's costs and delayed the

[[Page 48342]]

development of other products that would have increased competition in 
both the market for chipsets and the market for CPUs. The Complaint 
also alleges that Intel took steps to create technological barriers to 
preclude non-Intel integrated chipsets from interconnecting with future 
Intel CPUs. The Complaint further alleges that Intel bundled its CPUs 
with its own integrated chipsets and then priced the bundle to punish 
OEMs for buying non-Intel integrated chipsets.

II. Terms of the Proposed Consent Order

    The touchstone of the Proposed Consent Order is the protection of 
consumers and competition. Thus, the Proposed Consent Order provides 
structural relief designed to restore the competition lost as a result 
of Intel's past conduct, and injunctive relief that prevents Intel from 
engaging in future unfair methods of competition. The injunctive relief 
would prohibit Intel, when faced with new competitive threats, from 
engaging in the exclusionary and unfair conduct alleged in the 
Complaint. These provisions are designed to open the door to fair and 
vigorous competition in the relevant markets, leading to lower prices, 
more innovation, and more choice for consumers. The immediacy of this 
relief is particularly important in these rapidly changing markets.
    The Complaint did not seek to strip Intel of its x86 monopoly, 
which was in large measure gained by innovation and associated 
intellectual property rights. Rather, the Proposed Consent Order is 
designed to undo the effects of Intel's anticompetitive conduct and 
prevent its recurrence, by restoring as much as possible the 
competitive conditions that would have prevailed absent the 
anticompetitive behavior and by ensuring that the doors to competition 
remain open. The Proposed Consent Order clarifies and extends AMD's and 
Via's rights to the x86 technology. The injunctive relief in the 
Proposed Consent Order is thus particularly important today to ensure 
that AMD's new CPU products can have a fair test in the marketplace on 
the merits and that Via more quickly has the clear path it needs to 
design and produce its next generation of CPU products. The Complaint 
did not seek to fine or penalize Intel for its conduct because the 
Commission lacks that authority for violations of the antitrust laws.

A. Section II of the Proposed Consent Order

    Section II of the Proposed Consent Order requires Intel to maintain 
an open PCI Express (``PCIe'') Bus Interface on all of its CPU 
platforms for six years. The PCIe bus is an industry standard bus used 
to connect peripheral products such as discrete GPUs to the CPU. A bus 
is a connection point between different components on a computer 
motherboard. The PCIe bus serves a critical function on the Intel 
platform. Intel's commitment to maintain an open PCIe bus will provide 
discrete graphics manufacturers, such as NVIDIA and AMD/ATI, and 
manufacturers of other peripheral products, assurances that their 
products will remain viable and thus maintain their incentives to 
innovate -- including the continued development of alternative 
computing architectures such as General Purpose GPU computing. Intel's 
commitment extends to high performance computing platforms that have 
been at the forefront of General Purpose GPU computing. The Commission 
recognizes the importance of the continued development of this 
potential alternative computing architecture.
    The Commission recognizes that it may be difficult to forecast the 
future of innovation in these markets. The CPU and GPU markets are 
dynamic, and technology may be very different in three or four years. 
The Commission has the authority to reduce the number of years Intel 
must maintain the PCIe bus on any of its CPU platforms. For example, 
the Commission may reduce the commitment if the market has moved away 
from PCIe and it no longer serves a gateway function to Intel's CPU.
    Section II.C of the Proposed Consent Order prohibits Intel from 
limiting the performance of the PCIe bus in a manner that would hamper 
graphics performance or GP-GPU compute functionality of discrete GPUs. 
The provision would assure NVIDIA, AMD/ATI, and other potential 
manufacturers of products that would use the PCIe bus that they will be 
able to connect to Intel CPUs in both mainstream and high-performance 
computers in the future, and that the performance of their products 
will not be degraded by Intel. These assurances will also allow NVIDIA 
and others to continue developing GP-GPU computing as a complement to 
the processing power of the CPU.

B. Intel Assurances on Third Party Foundry Rights

    Section III.A of the Proposed Consent Order would require Intel to 
allow AMD, NVIDIA, and Via to disclose relevant ``have made'' rights 
under their respective licensing agreements with Intel to foundries and 
customers. The Proposed Consent Order would further require Intel to 
confirm to any foundry or customer that AMD, NVIDIA, and Via licenses 
confer such ``have made'' rights. ``Have made'' rights allow AMD, 
NVIDIA, and Via to contract out manufacturing to third parties. Absent 
Intel's assurances and disclosures, customers and foundries might be 
deterred from making or selling the products of these competitors when 
they are, in fact, licensed, based upon unwarranted fear of being sued 
by Intel for infringement. These disclosures will help eliminate any 
uncertainty surrounding the rights of AMD, NVIDIA, and Via to use third 
party foundries to manufacture x86 microprocessors or other products 
under their respective cross licenses.

C. Change of Control Modifications to Current License Agreements with 
AMD, NVIDIA, and Via

    Section III.B of the Proposed Consent Order would require Intel to 
offer to modify the change of control terms in Intel's intellectual 
property licenses with AMD, NVIDIA, and Via. The Commission is 
concerned that Intel's past conduct has weakened AMD and Via - Intel's 
only x86 competitors. This provision seeks to ensure that these 
existing competitors can partner with third parties to create a more 
formidable competitor to Intel.
    The existing change of control terms in licensing agreements 
potentially limit the ability of AMD, NVIDIA, and Via to take part in a 
merger or joint venture, or to raise capital. The provisions in the 
Proposed Consent Order are designed to allow AMD, NVIDIA, and Via to 
enter into a merger or joint venture with a third party, or to 
otherwise raise capital, without exposing itself to an immediate patent 
infringement suit by Intel. In the event that AMD, NVIDIA, or Via 
undergo a change of control, these provisions prohibit Intel from suing 
for patent infringement for 30 days. Furthermore, Intel must offer a 
one-year standstill agreement during which the acquiring party and 
Intel would not sue each other for patent infringement while both 
parties enter into good faith negotiations over a new license 
agreement.
    The Commission takes seriously Intel's commitment under these 
provisions in the Proposed Consent Order. The Commission has authority 
under the Order to evaluate and determine whether Intel in fact engages 
in good faith negotiations and the Commission will be able to enforce 
the Proposed Consent Order if Intel does not negotiate in good faith. 
In the event the change of control terms are invoked,

[[Page 48343]]

the Commission will carefully scrutinize Intel's conduct and take 
action, if appropriate.

D. Via x86 Licensing Agreement Extension and Assurances

    Section III.C of the Proposed Consent Order requires Intel to offer 
a five year extension to its cross-license with Via. The extension of 
the cross license guarantees that Via has the opportunity to continue 
competing in the x86 CPU market until at least 2018. Section III.C also 
requires Intel to confirm that Via may lawfully make, sell, and import 
x86 products without violating the Intel license. This disclosure is 
designed to eliminate uncertainty surrounding Via's right to compete in 
the relevant x86 CPU markets through 2018.
    The extension of the Via license agreement, coupled with the 
modifications to the change-of-control provisions in Section III.B, 
open the door to a potential joint venture or acquisition of Via and 
its x86 license by a strong and well financed entrant to the x86 
markets.

E. Commercial Practices Provisions

    The prohibitions in Section IV.A of the Proposed Consent Order 
address Intel's commercial practices. These provisions are specifically 
designed to protect competition, not any one competitor. The Proposed 
Consent Order protects competition in the markets for CPUs (including 
CPUs with integrated graphics), chipsets, and GPUs. In contrast, 
Intel's settlement with AMD in November 2009 only protected AMD from 
certain exclusionary practices and did not extend to GPUs or chipsets.
    The rationale for extending the prohibitions to all chipsets is 
two-fold. First, Intel's CPUs and chipsets are sold on a one-to-one 
basis. That is, an Intel chipset will only work with an Intel CPU. 
Thus, an agreement to purchase chipsets exclusively from Intel means 
that an OEM must purchase CPUs exclusively from Intel. Likewise, an 
OEM's agreement to purchase 95 percent of its chipsets from Intel means 
that an OEM will purchase at least 95 percent of its CPUs from Intel. 
Second, extending the Proposed Consent Order to chipsets also protects 
competition in the market for chipsets. The Commission recognizes that 
chipsets still play an important role in platform innovation. The 
provisions are designed to protect the development of new competitive 
options that may emerge from this market.
1. Prohibitions on Commercial Practices
    The Proposed Consent Order prohibits Intel from engaging in seven 
enumerated sales practices in the CPU, chipset, and GPU markets. 
Section IV.A prohibits Intel from offering benefits to OEMs, original 
design manufacturer (``ODMs''), or End Users in exchange for assurances 
that the customers will refrain from dealing with Intel's competitors. 
``Benefit'' is broadly defined and includes not only monetary 
consideration but also encompasses access to technical information, 
supply, and technical and engineering support. Section IV.A also 
prohibits Intel from punishing its customers by withholding benefits 
from those that purchase from non-Intel suppliers of CPUs, chipsets, 
and GPUs.
    Section IV.A.1 would prohibit Intel from conditioning a benefit on 
an OEM's, ODM's, or End User's agreement to purchase a CPU, chipset, 
and/or GPU exclusively from Intel in any geographic area (e.g., the 
United States), market segment (e.g., servers, workstations, commercial 
desktops, etc.), product segment (e.g., multi-processor servers, high-
end desktops, etc.), or distribution channel. For example, the Proposed 
Consent Order would prohibit Intel from conditioning a benefit on an 
OEM's agreement to purchase CPUs for servers exclusively from Intel.
    Section IV.A.2 would prohibit Intel from conditioning a benefit on 
an OEM's, ODM's, or End User's agreement to limit, delay, or refuse to 
purchase a CPU, chipset, and/or GPU from a non-Intel supplier. For 
example, Intel would be prohibited from conditioning a benefit to an 
OEM on that OEM's agreement to delay the introduction of a computer 
product incorporating a non-Intel product.
    Sections IV.A.3 and IV.A.4 address threats to retaliate against an 
OEM, ODM, or End User for doing business with a non-Intel supplier. 
Section IV.A.3 would prohibit Intel from conditioning a benefit on 
whether an OEM, ODM, or End User purchases, sells, or launches a CPU, 
chipset, and/or GPU from a non-Intel supplier. For example, Intel could 
not condition a benefit on an OEM's agreement to cancel a launch of a 
Personal Computer that includes a non-Intel GPU. Section IV.A.4 
prohibits Intel from withholding a benefit from an OEM, ODM, or End 
User if it designs, manufactures, distributes, or promotes a product 
incorporating a non-Intel CPU, chipset, and/or GPU. For example, Intel 
could not withhold a benefit from an OEM because that OEM participated 
in an AMD launch event.
    Section IV.A.5 would prohibit Intel from directly or indirectly 
conditioning a benefit on the share of CPUs, chipsets, and/or GPUs that 
the OEM or End User purchases from Intel. For example, Intel could not 
condition a benefit on an OEM's agreement to purchase at least 95 
percent of its CPU requirements for commercial desktops from Intel. Nor 
could Intel condition a benefit on an OEM's agreement to purchase no 
more than 5 percent of its CPU requirements for commercial desktops 
from a non-Intel supplier. In a market such as this one, where the most 
realistic mode of competition by competitors to a monopolist involves 
their selling initially modest quantities to direct buyers who also buy 
large quantities from the monopolist, such conditioning can amount to a 
tax on the growth of such competition, and can enable the monopolist to 
sustain high prices at the same time as it limits competition and 
decreases consumer choice.
    Section IV.A.6 would prohibit Intel from bundling the sales of its 
CPUs with its chipsets when the effective selling price of either piece 
of the bundle is below Intel's Product Cost. Intel's Product Cost is 
based on data maintained in the ordinary course of business by Intel, 
is represented to be used by Intel for business decisions, and is 
significantly higher than its average variable cost. The provision is 
based on the standard articulated by the Ninth Circuit in PeaceHealth 
and is administrable using that standard and the Product Cost data. 
This provision is designed to target specific conduct alleged in the 
Complaint. For example, the Complaint alleges that Intel bundled the 
sale of its Atom x86 CPU and chipset in such a way that the effective 
selling price of the chipset was below cost, in an effort to foreclose 
third party vendors of chipsets. The provision does not reflect an 
endorsement or adoption of PeaceHealth by the Commission as the 
applicable legal test for bundling practices. The Commission expressly 
retains the right to pursue independent claims against Intel or any 
alleged monopolist under Section 2 of the Sherman Act or Section 5 of 
the FTC Act based on a different legal standard such as (by way of 
example), the standard articulated by the en banc decision in the Third 
Circuit's LePage's case.\5\
---------------------------------------------------------------------------

    \5\ Compare LePage' s, Inc. v. 3M Co., 324 F.3d 141, 155, 162 
(3d Cir. 2003) (en banc) with Cascade Health Solutions v. 
PeaceHealth, 515 F.3d 883 (9th Cir. 2008).
---------------------------------------------------------------------------

    Section IV.A.7 would prohibit Intel from offering lump sum payments 
to an OEM, ODM, or End User for reaching a

[[Page 48344]]

particular threshold of purchases from Intel. For example, Intel would 
be prohibited from offering an OEM a $100 million rebate once it 
purchases 5 million x86 CPUs. The retroactive nature of these payment 
structures can disguise implicitly below-cost pricing that can unfairly 
exclude equally efficient competitors and smaller entrants, resulting 
in a loss of competition and harm to consumers. Intel, however, would 
not be precluded from offering volume discounts on incremental 
purchases above a particular threshold. For example, Intel could offer 
an OEM a price of $100 for each CPU up to 1 million units and a price 
of $90 for each CPU in excess of 1 million units. However, Intel would 
not be permitted to offer a price below Product Cost for the excess 
units. The Commission will carefully scrutinize Intel's implementation 
of this provision to ensure it does not price its products in such a 
way that forecloses competition.
2. Exceptions to the Commercial Practices Prohibitions
    The exceptions to the prohibitions in Section IV.A are designed to 
allow Intel to offer competitive pricing and enter into other 
procompetitive deals with OEMs, ODMs, and End Users. These exceptions 
permit conduct that may truly benefit consumers while still preventing 
Intel from engaging in the type of anticompetitive behavior identified 
in the Complaint. Nothing in these exceptions, however, would prevent 
the Commission from pursuing independent claims against Intel under 
Section 2 of the Sherman Act or Section 5 of the FTC Act if Intel 
engages in practices that do not violate the Proposed Consent Order but 
are nonetheless exclusionary or unfair and result in harm to consumers.
    Under Section IV.B.1, Intel is not prohibited from conditioning a 
Benefit on sales terms that are not expressly prohibited by the Order. 
For example, Intel could offer a discount to an OEM for a CPU with the 
condition that it is used in a laptop with a screen size of less than 9 
inches.
    Under Section IV.B.2, Intel is not prohibited from agreeing with an 
OEM, ODM, or End User customer that the customer will use distinct 
model numbers for Intel and non-Intel-based products. Similarly, Intel 
can agree with its customers that the customer will not falsely label a 
product based on non-Intel parts as based on Intel parts. The provision 
allows Intel and OEMs to use naming schemes that are intended to avoid 
customer confusion. For example, Intel could agree with an OEM that a 
specific laptop model would be branded Laptop-100A if it uses an AMD 
CPU and Laptop-100B if it uses an Intel CPU. However, this provision 
would not allow Intel to condition benefits on an OEM's agreement not 
to market or brand a product, which is explicitly prohibited by IV.A.3 
and IV.A.4.
    Under Section IV.B.3, Intel is not prohibited from meeting terms or 
benefits it ``reasonably believes'' are being offered by a rival 
supplier. This section does not immunize the offering of more favorable 
terms and conditions than those offered by the competitor, i.e., 
predatory pricing. In addition, this exception is limited in that 
Intel's offer must be limited to the quantity of the competitive offer; 
it cannot be conditioned on exclusivity or share of the OEM's or end 
user's business, and it must be limited to less than a year. Intel may 
condition its bid upon the purchase of a minimum number of units. For 
example, if Intel reasonably believes that a rival supplier is offering 
to sell 10,000 CPUs for $90 to an OEM, it can offer to meet that price 
so long as the OEM agrees to purchase at least 9,000 CPUs.
    Sections IV.B.4 and IV.B.5 simply make explicit what is already 
implicit in the Proposed Consent Order. Under Section IV.B.4., Intel 
would not violate the Proposed Consent Order merely because it wins all 
of an OEM's business, so long as it has not engaged in other conduct 
prohibited by the Order. The fact that an OEM purchases a Relevant 
Product or Chipset exclusively from Intel would not automatically 
support a violation of the Proposed Consent Order. Under Section 
IV.B.5, Intel would not violate the Proposed Consent Order if it 
engaged in conduct not explicitly prohibited by the Proposed Consent 
Order.
    Under Section IV.B.6, Intel is not prohibited from offering volume 
discounts directly to purchasers of computers in bidding situations. 
Intel's offers must be in writing and must be responsive only to single 
bids and not contingent on future purchases.
    Section IV.B.7 would permit Intel to make supply allocation 
decisions during times of shortage so long as it does not use that 
process to retaliate against an OEM that is using non-Intel CPUs, 
chipsets, or GPUs. For example, Intel could not withhold chipset supply 
from an OEM to punish that OEM for using AMD CPUs.
    Section IV.B.8 would allow Intel to enter into no more than ten 
exclusive agreements over the next ten years when it provides an OEM 
with ``extraordinary assistance'' under certain circumstances. The 
Commission recognizes that Intel has worked with OEMs and other 
customers to create innovative products that have benefitted consumers. 
The Commission wants to ensure that Intel has the opportunity to 
continue to invest monies in projects with OEMs and other customers to 
support future innovations. Intel, like any other firm, will only 
invest in research and development if it achieves a return on that 
investment. Section IV.B.8 recognizes that in ``extraordinary'' 
circumstances Intel should be able to negotiate exclusivity for a 
specific product in which it has invested research and development 
resources with an OEM or other customer. At the same time, the 
Commission is wary of creating a loophole to the Proposed Consent Order 
that can be exploited by Intel to eviscerate the prohibitions in 
Section IV.A. Thus, this provision is carefully limited.
    First, Intel's ``extraordinary assistance'' to an OEM must be 
valued at greater than $50 million and must not be made generally 
available to all customers. For example, the payment cannot simply take 
the form of marketing funds that are given to several OEMs but instead 
must be a unique offer to a particular OEM. Second, the ``extraordinary 
assistance'' must be intended to enable a customer to develop new and 
innovative products or sponsor an OEM's entry into a new market segment 
where the OEM did not previously compete. For example, a payment of $50 
million to an OEM in return for that OEM's agreement to use Intel's 
newest CPU in its laptop lines would not qualify as ``extraordinary 
assistance.'' Third, in return for investing in new product development 
with a particular OEM, Intel may ask for a period of limited 
exclusivity of no more than 30 months to recoup its investment. Fourth, 
Intel would only be able to seek exclusivity for the specific segment 
or specific product in which it has offered the ``extraordinary 
assistance.'' For example, if Intel offered ``extraordinary 
assistance'' to an OEM to develop a new server it could only seek 
exclusivity for that particular product line, it could not seek 
exclusivity for other servers or other computer products manufactured 
by that OEM. Fifth, any agreement regarding ``extraordinary 
assistance'' must be in writing and include the terms of the 
assistance, investment, and exclusivity. Finally, Intel would not be 
permitted to enter into more than 10 arrangements that meet this 
limited exception over the 10-year duration of the Proposed Consent 
Order. Exclusive dealing is harmful to the extent that it forecloses

[[Page 48345]]

an important distribution channel; well-justified exclusive dealing 
with (on average) just one or two of the Tier 1 OEMs is unlikely to do 
so.
    Section IV.B.9 allows Intel to insist that a Customer maintain the 
confidentiality of Intel's confidential business information.
    Section IV.B.10 allows Intel to offer buy ten, get one free 
promotions to its smaller customers. The exception is literally limited 
to sales of fewer than 11 products. For example, Intel would not be 
allowed to multiply such an offer a thousand-fold. Thus, this exception 
would not allow Intel to offer an OEM the opportunity to buy 10,000 
units and get 1,000 free.

F. Prohibition on Explicit Predatory Design

    Section V of the Proposed Order would prohibit Intel from designing 
or engineering its CPU or GPU products to solely disadvantage 
competitive or complementary products. This provision addresses 
allegations in the Complaint that Intel engaged in predatory innovation 
by cutting off competitors' access to its CPUs and slowing down various 
connections to the CPU. The Proposed Consent Order would be violated if 
a design change degrades performance of a competitive or complementary 
product and Intel fails to demonstrate an actual benefit to the Intel 
product at issue. For example, Intel could not introduce a design 
change in its CPU that degrades the performance of a competitive GPU 
unless it could demonstrate that the design change resulted in an 
actual benefit to Intel's CPU. The benefit must be real - not simply a 
theoretical benefit. Nor can the benefit to Intel be simply the fact 
that the competitive product is rendered less attractive by the design 
change (and thus enhances the competitive position of Intel's product).
    The burden is on Intel to demonstrate that any engineering or 
design change complies with the terms of Section V. However, Section V 
does not require proof that a design change was made to intentionally 
harm competitive or complementary products, or was otherwise 
anticompetitive, nor does Section V require a balancing test that would 
weigh the anticompetitive harms against the benefits of a particular 
Intel design change; it is sufficient that there be actual benefits. A 
balancing test would be appropriate in a legal challenge to an Intel 
design change under Section 5 of the FTC Act or Section 2 of the 
Sherman Act. As noted earlier, the Commission retains the authority to 
challenge any Intel design changes that are not prohibited by this 
provision of the Proposed Consent Order.

G. Assurances on the Accuracy of Intel Roadmaps

    The provisions in Section VI address allegations in the Complaint 
that Intel misrepresented its roadmap to the detriment of competition. 
Section VI.A would prohibit Intel from disclosing inaccurate or 
misleading roadmaps for the 10-year duration of the Proposed Consent 
Order and would require Intel to respond, and do so truthfully, to any 
inquiries regarding potential roadmap changes for one year after it 
discloses its roadmap. Section VI.A does not require that Intel 
disclose its roadmap in the first instance; rather, it places 
conditions on disclosure in the event that Intel does so. Section VI.B 
would require Intel to disclose to NVIDIA, on an annual interval, what 
bus interfaces its platforms will use through 2015.
    Together, these provisions address allegations in the Complaint 
that Intel misled third parties concerning its interface roadmap. 
Reliable disclosure of Intel's interface roadmap will help to eliminate 
uncertainty about the availability of connections and interoperability 
with Intel platforms. With reliable roadmap information, competitors 
that design, manufacture, or sell products that rely on 
interconnections with Intel platforms will be able to make informed and 
confident decisions about resource allocation and research and 
development efforts. Similarly, Intel customers that receive Intel 
roadmaps will be able to count on the continuing accuracy of those 
roadmaps and develop products based on combinations of Intel and non-
Intel parts. The provisions would help give NVIDIA, AMD/ATI, and other 
potential manufacturers of products that would interconnect with 
Intel's platform, assurances that they will be able to connect with the 
CPU in the future and will also allow continuing development of GP-GPU 
computing.

H. Compiler Disclosures

    Section VII would require Intel to take steps to prevent future 
misrepresentations related to its compilers and libraries, which are 
used by software developers to write software and make it work 
efficiently. Intel's compilers and libraries, however, may generate 
different software code depending on the vendor of the CPU on which 
software is running. For example, when the software code runs on an 
Intel-based computer, it may use certain optimizations such as advanced 
instruction sets or faster algorithms. However, when that same software 
code runs on a non-Intel-based computer that has the same 
optimizations, it may not use those optimizations. Intel's compilers 
and libraries thus may disable functionality and performance available 
on non-Intel CPUs. The disclosure requirements in Section VII provide 
software developers with non-misleading information regarding the 
extent to which Intel's compilers and libraries optimize differently 
for different vendors' CPUs. These disclosures allow software 
developers to make more informed decisions about their use of Intel 
compilers and libraries, such as whether to investigate the types of 
optimizations disabled on non-Intel CPUs, whether to use any methods to 
override the code dispatch mechanisms in Intel compilers and libraries, 
and whether to use Intel compilers and libraries at all.
    Section VII applies to Intel ``Compilers,'' which includes all 
Intel compilers, runtime libraries supplied with those compilers, and 
other libraries supplied by Intel for use with Intel and non-Intel 
compilers. Libraries are pre-compiled code or sample code provided to 
software developers for use in their programs. Because Intel could 
implement CPU vendor-based code dispatching in either compilers or in 
libraries, the disclosures required in Section VII must apply to both.
    Section VII.C of the Proposed Order requires Intel to inform its 
customers when and how its compilers and libraries optimize for Intel 
processors but not for non-Intel processors that are capable of using 
such optimizations. If Intel's compilers or libraries optimize for a 
standard instruction, such as SSE3, only for Intel CPUs but not for 
compatible AMD or Via CPUs, even in some circumstances, Intel must 
clearly and prominently disclose the extent to which the standard 
instruction set is not used and which instruction set is used instead. 
Section VII.C would also require Intel to disclose when its compiler 
performs other optimizations only on Intel CPUs but disables the same 
features on other CPUs that support the features.\6\
---------------------------------------------------------------------------

    \6\ Although compiler users will not know which precise 
optimizations are not available on non-Intel CPUs, they will be on 
notice that their compiler will not fully optimize for non-Intel 
CPUs.
---------------------------------------------------------------------------

    Intel also would be required under Section VII.D to notify its 
customers and implement an Intel Compiler Reimbursement Program that 
includes a $10 million reimbursement fund from which Intel would 
reimburse customers who relied on Intel's statements

[[Page 48346]]

regarding its compilers or libraries for the costs associated with 
recompiling their software using non-Intel compiler or library 
products. A customer seeking to use the Intel Compiler Reimbursement 
program must describe an Intel statement on which it relied to ensure 
that the program is used by customers who were misled by Intel's 
disclosures.
    Section VII.E of the Proposed Consent Order prevents Intel from 
making claims about the performance of its compiler unless Intel has 
substantiated that those claims are true and accurate using accepted 
analytical methods. This prohibition seeks to prevent Intel from 
claiming, without substantiation, that its compiler and libraries are 
superior to other available compilers and libraries. Intel may not 
claim to have superior compilers and libraries for AMD CPUs, when other 
products, such as the GNU C Compiler (GCC) or AMD's Core Math Library 
(ACML) have better performance in some circumstances. This prohibition 
is particularly important regarding Intel's representations about 
performance of its compilers on non-Intel CPUs. This section ensures 
that Intel will provide the appropriate disclosures when it makes 
performance claims about its compilers and libraries.

I. Benchmark Disclosures

    Section VIII would require Intel to make disclosures concerning the 
reliability and relevance of performance claims based on benchmarks. 
The provision requires Intel to notify any customers, whether hardware 
manufacturers or end consumers, that the performance tests may have 
been optimized only for Intel CPUs. Intel must make disclosures 
whenever it makes performance claims comparing its CPUs to competitors' 
processors and whenever it relies on a benchmark. The provision 
requires disclosures in all advertising or marketing materials that 
include performance claims, including presentations, audio-visual 
advertisements, and in prominent locations regarding performance on 
Intel's web site. The required disclosure will inform consumers and 
OEMs that certain benchmarks may not provide accurate performance 
comparisons with non-Intel CPUs. The provision will encourage consumers 
and OEMs to use benchmark results carefully and rely on multiple 
benchmarks in order to get accurate performance information about CPUs. 
The provision will thus help provide for more informed purchasing 
decisions.

J. Compliance Terms

    Sections IX through XIII of the Proposed Consent Order contain 
reporting, access, and notification provisions that are common in the 
Commission's orders, and are designed to allow the Commission to 
monitor compliance with the Proposed Consent Order. Section IX permits 
the Commission to appoint Technical Consultants to assist in assessing 
Intel's compliance with several provisions of the Proposed Consent. 
Such consultants are warranted in light of the technical nature of the 
products at issue and the potential complexity of some compliance 
issues, including cost accounting, microprocessor design, and software 
design. Intel would be required to pay for the Technical Consultants, 
up to a total of $2 million during the ten-year period of the Proposed 
Consent Order.
    Section X would require Intel to submit to the Commission a written 
plan explaining what Intel has done and will do to ensure compliance 
with the Proposed Consent Order. Intel would also be required to submit 
annual reports for six years explaining how it has complied with the 
Proposed Consent Order. Intel would be required, in these reports, to 
submit to the Commission any communications Intel receives from its 
customers regarding compliance with the Proposed Consent Order, 
including complaints that it is violating the Proposed Consent Order.
    Sections XI and XII would require Intel, for the next five years, 
to retain its written sales contracts and to allow the Commission 
access to Intel's records and employees. Section XIII would require 
Intel to notify the Commission at least thirty days prior to changes in 
corporate structure that would impact Intel's compliance provisions, 
such as Intel being purchased by another company or Intel creating or 
purchasing corporate subsidiaries.
    Paragraph XIV provides that the Proposed Consent Order shall 
terminate ten (10) years after the date it becomes final.
    By direction of the Commission, Commissioner Kovacic recused.

Donald S. Clark
Secretary.
[FR Doc. 2010-19694 Filed 8-9-10; 7:10 am]
BILLING CODE 6750-01-S