Intel FTC Settlement Ends Exclusive Deals, Payouts For PC Makers


Intel Wednesday agreed to not pay PC makers and system builders to "exclusively" use its processors or chips -- avoiding products from rivals like AMD -- as part of a sweeping antitrust settlement with the Federal Trade Commission (FTC).

The prohibition on those exclusive deals was one of many restrictions that the chip giant agreed to as part of a "consent decree" that will govern its actions for the next 10 years.

Intel also agreed not to pay PC makers to avoid products from competitors or to retaliate against computer makers if they do business with non-Intel suppliers. What's more, the settlement prohibits Intel from redesigning its chips to harm competitors.

In the intensely competitive graphics chips market, Intel is required for at least six years to not limit the performance of graphics processing chips made by competitors.

But it's the exclusive deal arrangement that potentially could send the biggest shock waves through the technology industry.

The settlement comes only two weeks after computer giant Dell paid a $100 million penalty to settle a Securities & Exchange Commission (SEC) investigation that it received billions of dollars from Intel over the course of several years as a “rebate” for not selling PCs and servers powered by AMD processors.

The SEC alleged that “Intel effectively paid Dell not to use processors manufactured by Advanced Micro Devices.”

Dell, in fact, allegedly repeatedly sought more and more cash from Intel to cover earnings shortfalls. It was a habit that former CEO Kevin Rollins referred to as a “drug” that Dell needed to “get off” of, according to the SEC.

 

Next: The Slippery Technology Exclusivity Slope