Intel settles government antitrust suit

August 4, 2010 7:02:09 PM PDT
Intel has agreed to a major antitrust settlement with the government -- a deal that requires the computer chipmaker to change its business in several key ways.

Intel was accused of using strong-arm tactics to keep its customers from buying chips from competitors.

Intel chips are found inside about 80 percent of all computers and servers. Its customers include Apple, Dell, HP and IBM.

"Evidence shows that Intel refused to sell chips to some buyers unless they agreed to limit, or in a few cases, entirely stop buying chips from the company's competitors. In fact, Intel paid some customers not to buy competing chips, even when those chips were the superior product," John Leibowitz from the Federal Trade Commission said.

Intel agreed to a settlement with the FTC to change certain practices. The company says it didn't do anything illegal or wrong.

"One of the allegations is that we would hinder our competitors by making changes in our products just to hinder them without any real benefit. But we really didn't do that. But what we agreed to do is guarantee that we'll never do that again," Intel spokesperson Chuck Mulloy said.

Two Silicon Valley rivals, NVIDIA and Advanced Micro Devices, are expected to benefit from the settlement.

"AMD has pretty much been restricted to a 20 percent market share, and that is sort of the essence of the case because that market share?It has varied somewhat, but it's been pretty steady throughout the years," CNET.com tech blogger Brooke Crothers said.

AMD did not respond to a request for an interview.

NVIDIA, which makes graphics cards designed for video and gaming, issued this statement: "Any steps that lead to a more competitive environment for our industry are good for the consumer."

Intel's relationship with its chip making rivals has been strained. Intel paid AMD $1.25 billion to settle a lawsuit late last year. NVIDIA expects its lawsuit against Intel will be heard in Delaware before the end of the year.


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