Intel, AMD Strike $1.25 Billion Antitrust Pact

Agreement settles multiple claims AMD filed against chip industry competitor.
Intel said Thursday it reached an antitrust settlement with Advanced Micro Devices under which it will pay its chip making rival $1.25 billion.

The pact puts an end to all outstanding legal actions, including patent disputes, between Intel and AMD, the companies said.

"While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development," Intel and AMD said in a joint statement.

Under terms of the deal, Intel and AMD obtain patent rights from each other through a 5-year technology cross-licensing arrangement.

Intel also agreed to modify its business practices.

AMD had accused Intel of using its market heft to extract favorable terms from computer makers and coerce some OEMs to shy away from using AMD processors in their systems. AMD filed lawsuits against Intel in several jurisdictions, including Delaware and Japan.

Those suits have been withdrawn. AMD also agreed to drop regulatory actions it filed against Intel in the U.S. and worldwide.

What's still in question is whether authorities that filed antitrust claims against Intel independently of AMD will drop their cases in light of the agreement. The European Union in May levied a record $1.5 billion antitrust fine against Intel after finding the company used monopolistic tactics to bolster its market position.

An EU spokesman said Thursday that the fine still stands.

Earlier this month, New York attorney general Andrew Cuomo filed an antitrust lawsuit against Intel. Cuomo alleged Intel bribed some PC manufacturers, and threatened others with supply constraints, in an effort to force them to use in Intel chips over AMD components.

Cuomo's office did not immediately respond to an inquiry on the status of the lawsuit in light of agreement.

Intel shares were up 1.42%, to $20.12, in early trading Thursday. AMD shares soared 22.6%, to $6.52.

Register for Interop New York and see the full range of IT solutions to position your organization for growth. At the Jacob Javits Center, Nov. 16-20, 2009. Find out more and register.

Editor's Choice
Brandon Taylor, Digital Editorial Program Manager
Jessica Davis, Senior Editor
Cynthia Harvey, Freelance Journalist, InformationWeek
Terry White, Associate Chief Analyst, Omdia
John Abel, Technical Director, Google Cloud
Richard Pallardy, Freelance Writer
Cynthia Harvey, Freelance Journalist, InformationWeek
Pam Baker, Contributing Writer