Intel’s Lawsuits Over Specre and Meltdown Could Usher in a New Era of Corporate Accountability
Intel’s SEC filings were recently released, and in them, the company revealed some interesting information. In it, the company revealed that they have made $62.8 billion in revenue – up 6% from 2016. They also increased their operating income, and recapped some of their biggest milestones. The introduction of the 8th generation processors, the XMM 8000 modem, the debut of Intel Optane memory, and the Stratix 10 FPGA. When it came to posting the positives for the company, they did go into a fair amount of detail with the sheer amount of good that they have had coming their way over the past year.
On the other side of the ledger came the reveal on page 124 that 30 lawsuits have been filed against the company – with the customer class-action lawsuits joining two shareholder-led class-action suits due to Spectre and Meltdown. On the consumer side, the claims from plaintiffs are that they were harmed by Intel’s actions in regards to security vulnerabilities and are seeking monetary damages. The securities lawsuit plaintiffs came to acquire stock in the company over the past seven months and allege that Intel violated securities laws by making statements about the company’s products that were revealed to be false due to the disclosure of the security vulnerabilities.
The company stated that due to how many variables there are in the cases, including how they are proceeding, whether damages have been claimed in a particular case, and the uncertainty of whether or not the suits will succeed that they are not going to estimate potential losses as a result of the suits. The consumer-side lawsuits had to be expected, but the shareholder lawsuits are a surprise to see given that they also name names on who is being sued within the company. The lawsuits could have widespread ramifications for the company. If the class-action suit on behalf of consumers succeeds, then it could mean that a court order would force Intel to pay customers to those who purchased computers with Intel microprocessors inside.
Intel had a rough 2017 thanks to all of these security issues. The company itself knew about them in July, but didn’t announce much about them until January of 2018. They did release a series of software and firmware updates to help consumers, but that also led to issues with systems being slowed down and suffering from major performance issues. Intel seems to know, based on all of these lawsuits, that they need to do the best job possible in both the short and long-term to resolve these issues. From a lawsuit perspective, they could opt to settle all of the lawsuits and hope to cut their losses as they exist today. They would certainly lose money – but might wind up regaining some trust from the public. The amount to settle for would be tough to determine, but going through over 30 lawsuits at one time is going to be a financial drain.
If Intel chooses to see all of the lawsuits out to their conclusion, then they would be spending quite a bit of time and money to hopefully win some of the cases. Odds are, with 32 suits against them, they would lose at least a couple of them and that would also hurt their reputation. Settling most, if not all of the lawsuits, would cost them money – but they wouldn’t admit any wrongdoing. The less time they go on, the less information is revealed during the course of each suit as well. It’s a definite balancing act because even if they settle, there would be a presumption of some measure of guilt from the public even if the nature of settling means that legally, Intel isn’t admitting guilt.
Intel’s 2018 should be focused on rebuilding the brand’s name – and their partnership with AMD should do a bit to help them out. The key to that being the case is that the co-developed processors also need to launch as problem-free as possible. If an AMD-Intel chipset has issues, people will be far more likely to blame Intel given their recent troubles instead of AMD – whose nose as a company has been pretty clean. Intel has shown a commitment to providing better-quality products and improving the end user experience with their upgraded processors – so hopefully, they wind up without any issues as the 8th generation processors become more widely available and are used over the long haul by users in OEM systems.
Intel as a company needs to make sure that they do more detail work with everything they’re doing. Whether it’s a new corporate partnership or most importantly, ensuring that their products are well-made for the long haul, it’s going to be a key for them going forward. 2018 looks like it will be a year of transition for them as they try to put the past mistakes behind them, but they have to be willing to admit to consumers that they have made mistakes and will work as hard as they can to regain their trust. So far, the company has done that to some extent by being so open about patches and why they are needed – but it’s only a good first step. The follow-through needs to be there and they can’t just go this far above and beyond what is expected for only this. Extending that level of care to everything will help them a lot.
If they can get things together, they should be able to rebound from a rough 2017. I wouldn’t expect a complete turnaround in 2018 alone though, but they should turn a bigger profit this year than last if only due to the AMD partnership. While they will no doubt have to split profits made with those chipsets, if they sell in a higher volume at a faster rate of speed and have a low failure rate, they could help the company out in a major way. It they can’t rebuild their reputation in 2018, then 2019 is going to be a tough year. For the good of the industry, having multiple companies offering up a particular product. It enables lower prices when you have healthy competition, and with AMD having a smaller piece of the pie than Intel, Intel definitely wants to maintain its lead for as long as possible.