Intel to change practices to settle FTC charges of antitrust abuses in CPU, GPU markets

By Jordan Robertson, AP
Wednesday, August 4, 2010

Intel to change practices in FTC settlement

SAN FRANCISCO — Intel has agreed to change some of its practices to settle a federal antitrust lawsuit alleging a decade of abuse.

The changes mandated in the settlement with the Federal Trade Commission represent the deepest penalties yet to the way Intel Corp. does business. There was no fine.

The truce allows Intel to extinguish one of its last major antitrust disputes over its behavior in the market for computer chips. Its tussles with regulators that has dragged out for years and played out around the world.

The FTC’s lawsuit was the harshest Intel has faced yet from government regulators, which have accused the world’s biggest semiconductor company of illegally bullying computer makers and sabotaging rivals to protect its dominance.

As part of the deal, Intel has agreed not to pay computer makers for avoiding rivals’ chips or retaliate against them when they do pick competing products — things Intel has long maintained it wasn’t doing anyway.

Those were essentially the terms of a $1.25 billion settlement Intel struck last year with Advanced Micro Devices Inc., a key rival whose complaints piqued regulators’ interest. The aftershocks of AMD’s campaign still reverberate: Intel is still fighting a $1.45 billion antitrust fine in Europe and separate cases in South Korea and New York state.

Where the FTC deal goes further than previous cases is in mandating that Intel needs to be friendly to its rivals in other significant ways.

Those include modifying its intellectual property agreements with AMD and Nvidia Corp. and Via Technologies Inc. so that they can more easily do mergers and joint ventures with other companies without the threat of a lawsuit from Intel.

That is important because AMD’s recent decision to spin off its factories into a separate company — which AMD needed to avert financial ruin — triggered a showdown with Intel over the legality of that move. Intel’s leverage over AMD in that matter likely played a key role in its settlement negotiations with AMD.

Doug Melamed, Intel’s general counsel, said the agreement “provides a framework that will allow us to continue to compete and to provide our customers the best possible products at the best prices. The settlement enables us to put an end to the expense and distraction of the FTC litigation.”

Shares of Intel, which is based in Santa Clara, Calif., fell 20 cents, or nearly 1 percent, to $20.52 in morning trading Wednesday.

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