Intel to Pay AMD $1.25 Billion to Settle Disputes

Intel Corp. said it will pay Advanced Micro Devices $1.25 billion to resolve one of the computer industry’s most acrimonious disputes.

AMD accused Intel of impeding competition for computer chips by using its monopoly power to hamper sales of AMD’s chipsets, charging that it intimidated system makers by threatening to withdraw rebates and shrink marketing support.

A key element of the settlement is a five-year cross licensing agreement that could pave the way for computer makers to build equipment employing the technology of both companies.

Under terms of the settlement, AMD will drop all pending litigation, including anti-trust and patent cross license disputes. The agreement resolves an anti-trust case pending in U.S. District Court in Delaware and two cases in Japan.

AMD also has agreed to withdraw any and all regulatory complaints worldwide. Intel said it will comply with a pre-determined set of business practices, the details of which were not made known.

In a joint statement, Intel and AMD said, “While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development.”