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FTC Launches Inquiry into Generative AI Investments and Partnerships

The Federal Trade Commission announced today that it issued orders to five companies requiring them to provide information regarding recent investments and partnerships involving generative AI companies and major cloud service providers. The agency's 6(b) inquiry will scrutinize corporate partnerships and investments with AI providers to build a better internal understanding of these relationships and their impact on the competitive landscape. The compulsory orders were sent to Alphabet, Inc., Amazon.com, Inc., Anthropic PBC, Microsoft Corp., and OpenAI, Inc.

"History shows that new technologies can create new markets and healthy competition. As companies race to develop and monetize AI, we must guard against tactics that foreclose this opportunity, "said FTC Chair Lina M. Khan. "Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition."

NVIDIA's China-only GeForce RTX 4090D Launched with Fewer Shaders than Regular RTX 4090

NVIDIA today formally launched the China-specific GeForce RTX 4090D graphics card for gaming and creator applications, after it was banned this October by the United States Federal Trade Commission from exporting the RTX 4090 (among other AI GPUs) to China. The RTX 4090D comes with a reduced AI inference performance than the RTX 4090 to comply with the US-FTC limits, and measures are put in place to prevent end-users from modifying it into a regular RTX 4090. Besides firmware and driver-level performance limiters, the card gets a completely different ASIC code, a different device ID (which prevents BIOS transplants from the RTX 4090); and a different core-configuration of the 5 nm "AD102" silicon itself.

The "AD102" silicon physically has 72 TPCs (144 SM), from which NVIDIA carved out the original RTX 4090 by enabling 64 TPCs (128 SM). The new RTX 4090D only gets 57 TPCs (114 SM), which reduces the counts of the CUDA cores, Tensor cores, and RT cores. While the original RTX 4090 has 16,384 CUDA cores, 512 Tensor cores, and 128 RT cores; the new RTX 4090D is configured with 14,592 CUDA cores, 456 Tensor cores, and 114 RT cores. The GPU clocks are the same, both boost up to 2.52 GHz, although the power limits are reduced, with the TGP lowered by 25 W. The memory sub-system appears untouched. We are also hearing that overclocking of the RTX 4090D will be limited, with lower slider limits—all to prevent end-users from regaining AI inference performance levels comparable to an RTX 4090. NVIDIA is pricing the RTX 4090D at a baseline price of RMB ¥12,999 ($1,840), which was the launch price of the original RTX 4090 in China, before it was scalped out of existence there.

Nerfed GeForce RTX 4090D for China to Launch Today

NVIDIA this October was barred by the US Federal Trade Commission from selling the GeForce RTX 4090 in the Chinese domestic market. The company scampered to create a China-specific variant of the RTX 4090 that would comply with the FTC's limits on the AI inference performance, while mostly being as fast as the regular RTX 4090 at gaming. The resulting product is the RTX 4090D. This card has significantly lower AI inference performance, probably due to a lower Tensor core count as VideoCardz reports, or a firmware based performance limiter similar to LHR (lite hashrate) GPUs during the peak of the crypto-scalping GPU shortage. This card goes on sale today. To prevent modding of this GPU back to a regular RTX 4090, it probably comes with a different device ID, and other barriers that prevent video BIOS from regular RTX 4090 from being transplanted over; and overclocking of the GPU is disabled beyond the maximum boost frequency advertised. The TGP has been lowered to 425 W, too.

Microsoft Closer to Finalizing Activision Blizzard Merger - FTC Injunction Request Rejected by US Judge

Microsoft is closing in on its proposed $69 billion acquisition of Activision Blizzard—the company is celebrating another victory, following the conclusion of a crucial court case against the US Federal Trade Commission (FTC). Both parties were recently engaged in five days of arguments and deliberation—yesterday Judge Jacqueline Scott Corley's final ruling stated: Microsoft's acquisition of Activision has been described as the largest in tech history. It deserves scrutiny. That scrutiny has paid off: Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox. It made an agreement with Nintendo to bring Call of Duty to Switch. And it entered several agreements to for the first time bring Activision's content to several cloud gaming services."

The lady justice continued: "This Court's responsibility in this case is narrow. It is to decide if, notwithstanding these current circumstances, the merger should be halted—perhaps even terminated—pending resolution of the FTC administrative action. For the reasons explained, the Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition. To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content. The motion for a preliminary injunction is therefore DENIED."

US Judge Temporarily Blocks Microsoft's Acquisition of Activision Blizzard

The US Federal Trade Commission (FTC) filed an injunction earlier this week, in a renewed effort to temporarily block Microsoft's $69 billion bid for full ownership of the Activision Blizzard group. A judge has today granted the regulatory body's request. The court has issued a temporary restraining order—in which it states the legal measure "is necessary to maintain the status quo while the complaint is pending." The FTC proposes that the acquisition has the potential to "substantially lessen competition" within North America's gaming sector. Microsoft and Activision are required to attend a two-day hearing—scheduled for 22 June in San Francisco, California.

The FTC had previously penciled in an August 2 session with an internal administrative judge, following the expiration of Microsoft's proposed deadline (July 18) for the merger. A company spokesperson (commenting to Eurogamer) expressed that leadership was happy about the FTC's decision to bring proceedings forward in time: "Accelerating the legal process in the US will ultimately bring more choice and competition to the gaming market. A temporary restraining order makes sense until we can receive a decision from the Court, which is moving swiftly." The legal document outlines terms including the prevention of "any of their officers, directors, domestic or foreign agents, divisions, subsidiaries, affiliates, partnerships, or joint ventures from closing or consummating, directly or indirectly, the proposed transaction or a substantially similar transaction."

Microsoft Outlines New Xbox Safety Measures for Children

At Xbox, we have the fundamental commitment to provide all players with a safe and secure experience on our platform - and this is especially true for our youngest players. We frequently iterate on our safety measures, in collaboration and with feedback from the community, regulators and partners. We recently entered into a settlement with the U.S. Federal Trade Commission (FTC) to update our account creation process and resolve a data retention glitch found in our system. Regrettably, we did not meet customer expectations and are committed to complying with the order to continue improving upon our safety measures. We believe that we can and should do more, and we'll remain steadfast in our commitment to safety, privacy, and security for our community.

Our two decades of safety experience has taught us that all players want, and need, safety and privacy protections. Since 2005, when we launched the first console that could connect players online, we've continued to invest in tools and technologies to protect our community. That work evolved into a multifaceted safety strategy. Our suite of safety, privacy and security measures are designed to respect player privacy and safety, and empower players, as well as parents and caregivers, to have control over their gaming experiences.

Epic Games to Pay $520 Million for Using Deceptive Patterns on Children

Fortnite maker, Epic Games, has on Monday reached a settlement in court in an investigation by the US Federal Trade Commission (FTC), to pay a total of 520 million US Dollars in fines. This fine is because Epic deployed shady tactics of manipulating children into purchasing Fortnite V-bucks, skins, etc., without proper consent forms and purchase order confirmations. Even with millions of complaints from parents, Epic decided to proceed with its tactics and used dark patterns that deceived the original intent. Thus, the FTC has made a case that this violates the Children's Online Privacy Protection Act (COPPA) rule, and Epic Games will have to pay the fine.

The fine is consists of two separate causes. The $275 million monetary penalty for violating the COPPA Rule—the largest penalty ever obtained for violating an FTC rule, and the $245 million to refund consumers for its dark patterns and billing practices. The refund fine is FTC's most considerable refund amount in a gaming case and its most significant administrative order in history. Epic said, "Over the past few years, we've been making changes to ensure our ecosystem meets the expectations of our players and regulators, which we hope will be a helpful guide for others in our industry. " The official statement is far longer, and you can read about it here.

FTC Seeks to Block Microsoft's Acquisition of Activision Blizzard

The Federal Trade Commission is seeking to block technology giant Microsoft Corp. from acquiring leading video game developer Activision Blizzard, Inc. and its blockbuster gaming franchises such as Call of Duty, alleging that the $69 billion deal, Microsoft's largest ever and the largest ever in the video gaming industry, would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business.

In a complaint issued today, the FTC pointed to Microsoft's record of acquiring and using valuable gaming content to suppress competition from rival consoles, including its acquisition of ZeniMax, parent company of Bethesda Softworks (a well-known game developer). Microsoft decided to make several of Bethesda's titles including Starfield and Redfall Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.

EU Pauses Investigation Into NVIDIA's ARM Acquisition as They Await Further Information

EU antitrust regulators have paused their probe into NVIDIA's proposed $40 billion acquisition of ARM as they await further information. This takeover which would be the largest chip merger in history is now "highly unlikely" according to analysts as regulators from the FTC in the US are suing to block the deal. The UK's Competition and Markets Authority (CMA) is also undergoing an in-depth investigation to discover potential national security risks and competition concerns. These competition concerns are shared by the FTC who state that the acquisition would stifle innovation in next-generation technologies and would distort Arm's incentives to benefit NVIDIA by undermining rivals. NVIDIA has originally hoped to complete the deal within 2 years however this timeline is now unachievable as noted by CEO Jensen Huang in August.

FTC Sues to Block $40 Billion Semiconductor NVIDIA and Arm Chip Merger

The Federal Trade Commission today sued to block U.S. chip supplier Nvidia Corp.'s $40 billion acquisition of U.K. chip design provider Arm Ltd. Semiconductor chips power the computers and technologies that are essential to our modern economy and society. The proposed vertical deal would give one of the largest chip companies control over the computing technology and designs that rival firms rely on to develop their own competing chips. The FTC's complaint alleges that the combined firm would have the means and incentive to stifle innovative next-generation technologies, including those used to run datacenters and driver-assistance systems in cars.

"The FTC is suing to block the largest semiconductor chip merger in history to prevent a chip conglomerate from stifling the innovation pipeline for next-generation technologies," said FTC Bureau of Competition Director Holly Vedova. "Tomorrow's technologies depend on preserving today's competitive, cutting-edge chip markets. This proposed deal would distort Arm's incentives in chip markets and allow the combined firm to unfairly undermine Nvidia's rivals. The FTC's lawsuit should send a strong signal that we will act aggressively to protect our critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations."

Console Makers, Publishers Agree to Disclose Loot Box Odds for "Ethical Surprise Mechanics"

We've been covering the loot box controversy for a while on TechPowerUp now. Independently of which side of the fence you're on - that loot boxes are akin to gambling and thus unethical in some of their implementations, or just cold to the entire issue - it's likely good news for everyone that these so-called "surprise mechanics", as they've been called, will now see their odds being disclosed by console makers and publishers.

FTC to Launch Investigation on Loot Boxes

This has been a long time coming for sure: the Federal Trade Commission (FTC) is looking to launch an investigation into the practice of introducing loot boxes in video games. The issue has already been brought up numerous times in other countries around the globe (Belgium and the Netherlands being the most prominent ones against its implementation). Only now will the FTC investigate openly into this, though, following an official request by Senator Maggie Hassan during a Senate Commerce, Science, and Transportation subcommittee hearing.

FTC Gives Manufacturers 30 Days to Remove Warranty Void Stickers

Remember that time where the FTC announced they were cracking down on illegal, predatory warranty conditions? You know, such as those "warranty void if removed" stickers that don't really have any legal base towards their implementation - and eventual refusal of an actual warranty claim? Well, the gong has now sounded, and it will reverberate some 30 times: the amount of days the FTC has given companies to cease and desist on putting those stickers in newly shipped products.

United States FTC Cracks Down on Predatory Warranty Conditions

The Federal Trade Commission staff has sent warning letters to six major companies that market and sell automobiles, cellular devices, and video gaming systems in the United States.

The letters warn that FTC staff has concerns about the companies' statements that consumers must use specified parts or service providers to keep their warranties intact. Unless warrantors provide the parts or services for free or receive a waiver from the FTC, such statements generally are prohibited by the Magnuson-Moss Warranty Act, a law that governs consumer product warranties. Similarly, such statements may be deceptive under the FTC Act.
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