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Intel pays AMD $1.25 billion to settle antitrust suits

Scales

By Stuart Turton

Posted on 12 Nov 2009 at 14:34

Intel has settled its antitrust dispute with AMD, agreeing to pay the smaller chip maker $1.25 billion.

AMD has taken Intel to court in the US and Japan claiming that the chip giant used illegal tactics to "lock AMD out of as many customers and market segments as possible."

However, in a brief joint statement the companies have announced that AMD "is to withdraw all of its regulatory complaints worldwide" in return for some significant concessions from Intel.

"AMD and Intel obtain patent rights from a new five-year cross license agreement, Intel and AMD will give up any claims of breach from the previous license agreement, and Intel will pay AMD $1.25 billion. Intel has also agreed to abide by a set of business practice provisions," the statement reads.

This agreement enables the companies to focus all of our efforts on product innovation and development

There's no further information on what "business practice provisions" Intel has agreed to, though we've put the question to the company and await a response.

Speaking on a conference call, Intel chief executive Paul Ottelini admitted the company had been wary of been taken before a court. "Antitrust cases are incredibly complex and and it's a jury trial, which has its own vagaries."

"While it pains me to write a cheque at any time, in this case, I think it made for a practical settlement. It was a good compromise between the two companies. In many ways, it was a small multiple of the potential damages that could be awarded in a jury trial," he adds.

The deal brings to an end five years of legal wrangling between the companies, and follows the EU's decision to fine Intel a record $1.45 billion for antitrust violations.

Korea's Fair Trade Commission has also hit Intel with an $18.6 million fine. Intel is appealing both rulings.

Responding to the deal, AMD chief executive Dirk Meyer claimed the companies were now "competing on a level playing field".

"Intel doesn't have an obligation to help us, they do have an obligation not to do things that are intended to hurt us," he added.

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User comments

"Guilty as Charged" then?

It would appear that Intel realised they were guilty as charged in the case otherwise would never have agreed to such a lucrative deal regarding patents, money and discontinuing the dispute over the Foundry.

By skarlock on 12 Nov 2009

AMD better put that money straight into their research department or next time Intel will not need to play dirty...

By Josefov on 12 Nov 2009

You seem somewhat mistaken Josefov.

AMD currently lead the graphics market and as far as CPU's go they offer the best value to power you can get.

By skarlock on 12 Nov 2009

@skarlock

AMD currently lag Intel in raw power.

AMD tend to give better performance for the same price point.

Intel tend to give better performance for the same power consumption.

(In most cases.)

Intel's Core i5 and Core i7 sare simply better CPUs in just about every way in comparison the AMDs PhenomII, etc. AMD are a generation behind. It's only price point that AMD compete on. If AMD keep slipping in the 'generation game' I really do see their market share going in the same direction.

So, yes, AMD -do- need to spend (wisely) on R&D, in my opinion.

By matbailie on 12 Nov 2009

Guilty as Charged !

.... and are afraid of further court action... settling up now is better - but will the Public now believe AMD were telling the truth - I sincerely do hope so.

AMD are behind - true - Intel put them there, Intel starved them of vital revenue that 'could have' given them the necessary funds to have produced better chips today, is giving them 1.25 billion enough to level the playing field - I think not. If Intel had behaved more professionally and played fair then AMD could have been the ones producing chips on a par with intel latest tech.

By nicomo on 12 Nov 2009

AMD sold out too soon and too cheaply

Mark

By mprltd on 12 Nov 2009

Its always surprised me that people/magazines say the fastest CPU is the only one that matters. i7 can be hundreds of pounds; Phenom can be under £100. Unless you are a gamer, the choice is obvious.
Do AMD lose out by 'only' being able to compete on price? Not if they are where the bulk of sales/profits are.

By davidsoap on 13 Nov 2009

Speed = Profit

Given that a processor 20% faster commands a price premium of up to 200%, speed does matter. Intel's tick-tock strategy is driving up performance more consistantly then AMD have managed. By separating Fabrication and chip design AMD are better able to concentrate on one half of the strategy but they now need their fab partners to drive the other half and it does appear on fabrication they may be 2 years behind Intel.

By milliganp on 13 Nov 2009

@skarlock - Sackcloth n' ashes...

... not this time though.
AMD can hardly take the credit for 'the lead in the graphics market' may I remind you. They did not establish and develop ATI, they bought it. If I had enough money I could buy Ferrari but would that make me responsible for the design and performance of their F1 engines?

The fact that AMD is cheaper is the only factor that still keeps them afloat but in terms of technology, innovation, technical progress they've been wheezing and coughing for years now trying to catch up with Intel, whose processors run faster, cooler and drawing less electricity. I'm happy to pay the premium for that at the minute, but if AMD can pull a trick out of their hat, I'll go with them. And that's what my comment was about, processor-wise in terms of technology, without that trick there's hardly any competition.
Would that be clear enough this time?

By Josefov on 13 Nov 2009

I think you should check facts regarding ATI's strength before and following being acquired by AMD. You'll see that ATI were struggling and had very poor driver development. Following AMD's take-over, a number of new GPU design features, which had previously been developed by AMD, were integrated into the 4000 series which is why they suddenly leaped ahead in performance. In addition, the software development side made gigantic strides forward for driver development. Combined this moved ATI from a poor second place to a very strong first place in the graphics market.

It's interesting you claim AMD have lacked innovation. If you take a look at the i5 and i7 chips from Intel, you'll see quite a few features have been used from AMD under their cross-licencing agreement, arguably the most important of which for improved Intel performance is the on-chip memory controller.

By skarlock on 13 Nov 2009

Right now I'm more looking at i3 and i9 coming out next year if I'm not mistaken.

And yes, ATI did gain from that marriage but it still didn't make AMD's processors much better and definitely not competing with Intel's in performance.

And is that cross-licencing agreement working only in one direction? But that's nit-picking now. I'll go back to my original comment ONCE MORE and say: There's no way you could stand up and say out loud that AMD right now is a better processor manufacturer than Intel without looking silly to say the least.

By Josefov on 13 Nov 2009

Right now I'm more looking at i3 and i9 coming out next year if I'm not mistaken.

And yes, ATI did gain from that marriage but it still didn't make AMD's processors much better and definitely not competing with Intel's in performance.

And is that cross-licencing agreement working only in one direction? But that's nit-picking now. I'll go back to my original comment ONCE MORE and say: There's no way you could stand up and say out loud that AMD right now is a better processor manufacturer than Intel without looking silly to say the least.

By Josefov on 13 Nov 2009

Tit for tat arguments about who is better are childish.

The issue is Intel are bang to rights and are guilty as charged. They have stifled the market and have created a robust anti-competitive environment which AMD probably considered the settlement will bring them up to par. But I don't think it is enough. Intel will continue their tricks and the market will remain uncompetitive because theat is the nature of big organisations like Intel and Microsoft. The consumer will always lose out.

By Manuel on 13 Nov 2009

Tit for tat arguments about who is better are childish.

The issue is Intel are bang to rights and are guilty as charged. They have stifled the market and have created a robust anti-competitive environment which AMD probably considered the settlement will bring them up to par. But I don't think it is enough. Intel will continue their tricks and the market will remain uncompetitive because theat is the nature of big organisations like Intel and Microsoft. The consumer will always lose out.

By Manuel on 13 Nov 2009

Right now I'm more looking at i3 and i9 coming out next year if I'm not mistaken.

And yes, ATI did gain from that marriage but it still didn't make AMD's processors much better and definitely not competing with Intel's in performance.

And is that cross-licencing agreement working only in one direction? But that's nit-picking now. I'll go back to my original comment ONCE MORE and say: There's no way you could stand up and say out loud that AMD right now is a better processor manufacturer than Intel without looking silly to say the least.

By Josefov on 13 Nov 2009

Right now I'm more looking at i3 and i9 coming out next year if I'm not mistaken.

And yes, ATI did gain from that marriage but it still didn't make AMD's processors much better and definitely not competing with Intel's in performance.

And is that cross-licencing agreement working only in one direction? But that's nit-picking now. I'll go back to my original comment ONCE MORE and say: There's no way you could stand up and say out loud that AMD right now is a better processor manufacturer than Intel without looking silly to say the least.

By Josefov on 13 Nov 2009

Right now I'm more looking at i3 and i9 coming out next year if I'm not mistaken.

And yes, ATI did gain from that marriage but it still didn't make AMD's processors much better and definitely not competing with Intel's in performance.

And is that cross-licencing agreement working only in one direction? But that's nit-picking now. I'll go back to my original comment ONCE MORE and say: There's no way you could stand up and say out loud that AMD right now is a better processor manufacturer than Intel without looking silly to say the least.

By Josefov on 13 Nov 2009

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