INTEL SOUGHT to quell a rising tide of complaints over its business practices as it agreed yesterday to pay $1.25 billion (€842 million) to settle a private anti-trust lawsuit from rival chipmaker Advanced Micro Devices (AMD).

The settlement of the dispute between the two chip companies ends one of the longest-running and most heated disagreements in US business.

AMD, virtually Intel’s only rival in making the microprocessors used in PCs and many low-cost servers, has long complained that its much bigger rival uses unfair methods to prevent computer makers from buying its chips.

Those complaints, which Intel denies, have already led to regulatory action against the company in Japan, South Korea and the EU, and last week brought a lawsuit from New York attorney general Andrew Cuomo. The new US Federal Trade Commission (FTC), which has promised a more aggressive approach to anti-trust enforcement than its predecessor, has also begun an investigation.

Legal experts warned that the settlement would do little to stop regulatory action against Intel, the world’s biggest maker of microprocessors. The European Commission this year imposed a record €1.06 billion fine on the company.

Regulators on both sides of the Atlantic signalled that, while they would look at the AMD settlement, it would not change their own scrutiny of Intel’s behaviour.

As part of the settlement, Intel said it had undertaken not to engage in some of the practices it has been accused of by AMD and regulators. These include promising discounts to PC makers only if they refuse to buy chips from AMD, or hold back the launch of machines carrying AMD products.

Intel denied yesterday that it had bullied AMD in this way, and said it had only given the undertakings as a way to resolve the legal dispute. Intel chief executive Paul Otellini also said it had agreed to the massive payment to reduce the risk of the court case, which might have led to a much bigger judgment, and said Intel maintained it had done nothing wrong.

FTC chairman Jon Leibowitz said that while the agency would review the “private litigation”, he could not comment further given its own “ongoing independent investigation”. – (Copyright The Financial Times Limited 2009)