Intel settles with AMD. What's next?

The chipmaker still faces the New York attorney general, foreign trade regulators, and about 80 consumer class-action lawsuits.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Roger Parloff, senior editor

16 portraits: The players of tech
These tech-world luminaries - photographed during our recent Brainstorm Tech conference - aren't just changing the game; they've defined it. Photographs by Robyn Twomey.
Who should be the business leader of the decade?
  • Steve Jobs
  • Warren Buffett
  • Google’s Larry Page and Sergey Brin
  • Bill Gates

NEW YORK (Fortune) -- In yesterday's settlement of AMD's worldwide antitrust claims against Intel, Intel agreed to pay $1.25 billion to AMD. In addition, the two companies renewed a longstanding patent cross-licensing deal, but with Intel agreeing to delete language from it that -- as Intel interpreted it -- was restricting AMD's ability to outsource fabrication of its semiconductors to nonsubsidiaries.

The new agreement will, thus, free AMD (AMD, Fortune 500) to realize its longstanding strategy of going "fab-less," i.e., contracting out all of its semiconductor production, rather than relying on its own fabrication plants, or fabs. Under the deal, Intel (INTC, Fortune 500) also agreed to refrain from a variety of exclusionary conduct that Intel has always denied -- and still denies -- ever having engaged in.

The settlement will still leave Intel facing about 80 class-action consumer antitrust suits -- each seeking treble damages -- which have been consolidated in the same federal court in Delaware where the AMD case had been filed.

Though AMD also agreed to drop complaints it filed against Intel with regulators around the world, the gesture will have no binding impact on what those regulators will do.

Thus, Intel will certainly have to continue to fight the Cuomo complaint, also filed in the Delaware federal court, and may yet face a set of fresh charges now being weighed by the Federal Trade Commission. (The FTC is believed to be focusing on Intel's conduct in the burgeoning new market for netbook computers, including controversies that have already led to litigation between Intel and chipset designer NVIDIA (NVDA).)

In addition, Intel will continue to pursue appeals of final decisions rendered against it by the European Commission in May and by the Korea Fair Trade Commission in June 2008.

The EC hit Intel with its largest fine in history -- $1.46 billion -- after finding, among other things, that it made illegal payments to Dell (DELL, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), NEC, Acer, and Lenovo in exchange for their agreement to limit or bar their use of AMD chips in some or all lines of computers. It also found that, for more than a decade, Intel had paid the largest computer retailing chain in Europe, Media Saturn Holdings, to bar it from selling any AMD-powered computers.

Similarly, the Korean FTC found that Intel had paid Korean computer makers Samsung and Sambo to cap their usage of AMD chips.

Earlier, in March 2005, the Japan Fair Trade Commission found Intel had done the same thing with five unidentified Japanese manufacturers, believed to be Sony (SNE), Toshiba, NEC, Fujitsu, and Hitachi. Intel settled the Japanese charges. To top of page

Company Price Change % Change
Facebook Inc 60.87 -0.49 -0.80%
Bank of America Corp... 16.34 -0.03 -0.18%
Microsoft Corp 39.86 0.17 0.43%
Verizon Communicatio... 46.28 -1.15 -2.42%
Micron Technology In... 26.16 -0.09 -0.34%
Data as of 4:01pm ET
Index Last Change % Change
Dow 16,501.65 0.00 0.00%
Nasdaq 4,148.34 21.37 0.52%
S&P 500 1,878.61 3.22 0.17%
Treasuries 2.69 0.00 0.07%
Data as of 9:15pm ET
More Galleries
Don't give my job to Staples Hundreds of U.S. Postal Service workers protested against experimental mini post offices at Staples. Here's why some Washington, D.C. workers don't like the deal. More
Tools to make your money grow You've started saving and built a financial base. Time for a few new strategies and tools to get your money to grow even more. From real estate to IRAs, here are some tips. More
Ready to start saving? Here's how to do it right When you are just starting out or finally starting to get serious about saving, the basics will get you far. Here are more than a dozen tips that will help you lay the base for building your net worth. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.