Intel Settles New York Antitrust Lawsuit

Chip giant Intel and the New York Attorney General Eric Schneiderman have both agreed to end a lawsuit, which alleged that Intel violated antitrust laws.

The lawsuit was filed by the attorney general’s office in November 2009.

The agreement includes a payment of $6.5 million (£4.1m) from Intel that is intended to cover some of the costs incurred by the litigation, according to a copy of the settlement.

Lawsuit Background

The lawsuit, filed in November 2009, accused Intel of anti-competitive behaviour, claiming that the chip maker used its money and dominant position in the global processor market to persuade computer makers such as Hewlett-Packard and Dell to limit their use of chips from Intel rival Advanced Micro Devices (AMD).

The lawsuit followed an investigation that began in 2007 by the attorney general’s office into the conduct of Intel in the x86 microprocessor market.

The 9 February agreement follows a December 2011 court ruling that greatly reduced the scope of the lawsuit and questioned the state’s role in suing the giant chip maker on behalf of computer buyers and saying the statute of limitations had run out on some of the charges. The settlement agreement stated that Intel does not admit either any violation of law or that the allegations in the complaint are true, and it calls for no changes to the way Intel does business.

“Following recent court rulings in Intel’s favour that significantly and appropriately narrowed the scope of this case, we were able to reach an agreement with New York to bring to an end what remained of the case,” said Doug Melamed, senior vice president and general counsel at Intel. “We have always said that Intel’s business practices are lawful, pro-competitive and beneficial to consumers, and we are pleased this matter has been resolved.”

In filing the lawsuit, prosecutors alleged that Intel obtained exclusive or near-exclusive agreements from large computer makers “in exchange for payments totalling billions of dollars, and threatening retaliation against any company that did not heed its wishes.” The attorney general’s office further accused Intel of “bribing or coercing OEMs either not to offer, or severely limit, AMD CPUs.”

Rulings Disappointment

The December ruling also dismissed claims that involved PC purchases before November 2006, saying that while they would have been allowed under New York’s statute of limitations, it is the three-year statute of limitations in Delaware that takes precedence. The New York prosecutors filed the lawsuit at a time when Intel was hearing similar accusations from federal and European regulators, as well as from AMD.

“While we were disappointed by the rulings of the Delaware federal judge handling the matter, it’s important to note that our claims were dismissed on procedural, not substantive grounds,” Jennifer Givner, a spokeswoman for Schneiderman, wrote said in an emailed statement.

“We continue to believe that those claims, which were asserted under the previous administration, had merit, but in light of the court’s decision believe that no purpose is served by pursuing the matter further.”