Intel Reaches Antitrust Accord with FTC

Intel, the US chipmaker, is close to settling a long-running antitrust suit with the US Federal Trade Commission, bringing to a close a legal battle that has dogged the world’s largest chipmaker for more than 10 years.

The settlement will include concessions on its business practices, according to a person familiar with the deal, but will not include fines because the FTC does not have the authority to issue civil penalties.

Intel Core 2 Extreme Quad-core processor
Intel Core 2 Extreme Quad-core processor

The FTC accused Intel of abusing its dominant position in the chip market over the past 10 years, including using tactics to dissuade customers from buying PC microprocessors (CPUs) from its main rival Advanced Micro Devices . The FTC also saod Intel had blocked competition in the graphics chip market.

Intel faced similar scrutiny in Europe, Japan and Korea, and last year regulators in Brussels imposed a record €1.06bn ($1.44bn) fine on the company for breaking competition law.

Last November Intel Intel paid AMD $1.25 billion to settle the dispute between the two companies, although regulators on both sides of the Atlantic said this would not change their own investigation of Intel’s behaviour.

Intel had denied the allegations and called the FTC’s case “misguided”.

The case was controversial in antitrust circles because it was brought under a rarely used legal statute which allowed the FTC to charge the company for “unfair methods of competition … and unfair or deceptive acts”. The FTC’s move sent a strong message to the companies it regulates: that it was willing to enforce antitrust authority with all of its legal tools.

Antitrust experts said the case represented a bid by the FTC to push back against restrictions on antitrust enforcement following a slew of court decisions that cracked down on enforcement actions.

While no fine is being levied by the FTC, antitrust issues have cost Intel around $3bn in penalties to date. In addition to thed European authorities, the South Korean FTC has also fined the chipmaker last year to settle a civil action over its business practices.

Intel last week reported the best quarter in its history as corporate customers increased spending on information technology, boosting hopes that businesses are undertaking a long-awaited “refresh” of both hardware and software in the aftermath of the financial crisis.

Intel said talks between the chipmaker and the FTC were continuing. The FTC declined to comment.

Additional reporting by Chris Nuttall