Intel settles disputes with AMD for $1.25b

Dylan Bushell-Embling
13 Nov 2009
00:00

Bitter rivals Intel and AMD have resolved their long-standing legal disputes, with Intel agreeing to pay a $1.25 billion settlement.

Intel has also agreed to drop the business practices at the heart of their dispute – practices which AMD had long complained of as anti-competitive.

“While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables [us] to focus all of our efforts on product innovation and development,” the chipmakers said in a joint statement.

The parties struck a new five-year cross-licensing deal, and agreed to drop any claims from breaches of the previous contract.

AMD will drop all its lawsuits against Intel - including one in a US district court and two pending in Japan – and withdraw its regulatory complaints worldwide.

In return, Intel has agreed not to offer inducements to entice customers to source a disproportionate number of chips from the dominant chipmaker. Nor will it use any financial penalties to reduce the number of AMD chips purchased.

US trade regulator FTC said it would review the settlement, but would also continue its independent investigation into Intel's alleged anti-competitive practices.

Neither is the settlement likely to halt the US attorney general's ongoing antitrust suit against Intel.

European antitrust regulators this year fined Intel a record €1.06 billion ($1.57 billion), and ordered it to cease its “illegal practices.”

These practices included offering hidden rebates for manufacturers that bought the vast majority of their CPUs from Intel, and even paying retail outlets to stock only Intel-powered PCs, the commission said at the time.

In the wake of the settlement, Intel has updated its outlook for Q4, saying it now expects spending of $4.2 billion, up from $2.9 billion. But the company has yet to update its profit forecast.

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