Intel, who have been labelled a corrupt organisation has agreed to a legal settlement with the US Federal Trade Commission over charges that it engaged in a decade-long campaign to stifle competition and strengthen its dominant position in the microchip market.
Under the deal Intel, who have already been fined millions of dollars, will have to abide by the following conditions.
– Is prohibited from retaliating against computer makers if they do business with non-Intel suppliers;
– Cannot give financial benefits to makers in exchange for a promise to source all their chips from Intel; and
– Must modify intellectual property agreements with rivals AMD, Nvidia and Via Technologies, so they can undertake mergers or joint ventures with other companies without the threat of being sued by Intel for patent infringement.
The deal struck with the FTC appears to bring to a conclusion multi-pronged investigations into the biggest scandal in the IT industry, in which some of top brands – and top personalities – in the industry were found to have been deeply involved in secret anti-competition deals and accounting fraud.
Intel has already paid billions of dollars to settle threatened lawsuits over the allegations, and is being forced to mend its ways. Among other things Intel was secretly paying computer makers like Dell not to use chips made by its No. 1 rival AMD.
The FTC sued Intel last December, seeking an order that would prevent the chipmaker from engaging in a variety of such actions. It claimed Intel used anticompetitive tactics that “stifled innovation and harmed consumers in the market for computer microprocessors, graphics processing units, and chipsets”.
The FTC action followed a complaint by AMD – which launched its own civil suit – that Intel had stifled competition by threatening and rewarding OEMs like Dell, Hewlett-Packard and IBM.
Intel paid AMD US$1.25 billion to settle that lawsuit and agreed not to induce OEMs to block sales of AMD products in the market – an agreement repeated in the FTC settlement.
It also paid a $1.45 billion fine to the European Union last year but is appealing.
Dell last week agreed to pay $100 million to settle charges brought by the US Securities and Exchange Commission concerning the secret payments by Intel and other alleged accounting fraud, without admitting or denying guilt. Michael Dell agreed to pay a $4 million fine, also without admitting or denying guilt.
Intel said in a statement that while it has agreed to the FTC settlement, it does not admit either any violation of law or that the facts alleged in the FTC complaint are true.
