Intel Pays AMD $1.25 Billion, Following That $1.5 Billion Fine

By: Chris Crum - November 12, 2009

Update: Intel has now updated its Fourth-quarter financial expectations:

As a result of the legal settlement announced today with Advanced Micro Devices (AMD), Intel Corporation adjusted its fourth-quarter financial expectations to reflect the impact of the $1.25 billion settlement payment. Intel now expects spending (R&D plus MG&A) in the fourth quarter to be approximately $4.2 billion, up from $2.9 billion. In addition, the effective tax rate is expected to be approximately 20 percent, down from 26 percent. All other expectations are unchanged.

Original Article: According to reports, technology giant Intel has agreed to pay $1.25 billion to settle multiple disputes with rival chip manufacturer Advanced Micro Devices or AMD. These two companies have been feuding for years. Actually, decades. The Wall Street Journal notes that the two companies have had disputes as far back as the 1980s.

In 2005, AMD filed a suit against Intel, claiming that Intel was engaging in unfair competition by offering rebates to Japanese PC makers, who in turn would eliminate or limit purchases of microprocessors made by AMD or Transmeta. Here’s a little more history about the current dispute (via Wikipedia):

Intel InsideThe complaint was filed in the U.S. District Court in Delaware in June 2005. The court date, originally scheduled for April 2009, has been pushed back to February 2010. One delay was due to the Korea Fair Trade Commission issuing Intel a fine of US$25.4 million. Some of the manufacturers involved in the case are Dell, HP, Gateway, Acer, Fujitsu, Sony, Toshiba, and Hitachi.

In February 2009 it was reported that Intel had spent at least US$116 million to date on legal representation on the antitrust suit. This was inferred from a US$50 million lawsuit filed by Intel against one of its insurers; the lawsuit disclosed that Intel had already exhausted US$66 million in coverage from two other insurers while fighting the antitrust lawsuit.

It appears that everything is now square between Intel and AMD, at least financially. The New York Times reports that the $1.25 billion settlement will resolve all of AMD’s regulatory complaints worldwide as well as suits in Delaware and Japan. In addition to the hefty sum of money, Intel has also agreed to abide by certain terms with regards to business practices.

Earlier this year, the EU fined Intel a record $1.5 billion. According to the NYT, the EU’s commissioner says the company’s settlement with AMD will not affect the EU’s decision on that fine.


Related Articles:

> EU Fines Intel A Record $1.45 Billion

> NY AG Hits Intel With Antitrust Suit

> Intel Apparently A Google Chrome OS Partner, Too

Chris Crum

About the Author

Chris CrumChris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.

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  • Texx

    That 1.25 billion dollar fine sounded like a lot of money at first, but after you see the figures mentioned in the article it seems like Intel might not even notice.

    Maybe they need more realistic fines for these mega-corps that stymie competition, like 20% of revenue for the next 5 years?

    Or something like that?

  • Guest

    I agree.

    AMD has had some significantly “ahead of the competition” processors over the years. None have found the traction that they should have. Intel has undercut and used their power over vendors to ensure AMD and many other companies have not recieved their just reward for thei labor. I want innovation and a meritocracy. Intel is a predator. I will not buy Intel. All of my machines have been AMD. They will continue to be.

    IMO the fine and penalty is an insult to AMD, all computer consumers and humanity at large.

  • tski

    Two fines totalling $2.75billion dollars won’t even dent the corperate savings account.