AMD and Intel announced that they’ve settled a long-running legal battle. AMD and Intel are the only two companies that manufacture the processors required to run Microsoft Windows operating systems in high volume. AMD had accused Intel of unfair business practices that discouraged manufacturers from choosing its processors over Intel’s.
Intel will be writing AMD a check for $1.25 billion as part of the settlement. Intel and AMD were also arguing over technology licensing deals and have put those arguments behind them.
Here’s a copy of what AMD’s public relations department sent out today:
Excerpts of Form 8-K Filed November 12, 2009
BUSINESS PRACTICES
As part of the overall resolution of the Actions, and without conceding expressly or by implication that any of the following business practices are required by the laws of any jurisdiction, or any order issued by any regulatory or adjudicative body, anywhere in the world, or that contrary business practices would violate any such laws or orders, the Parties agree to adhere to the Business Practices set forth in Section 2.0 for the term, and subject to the conditions, set forth in Section 6.0.
2.1 SALES AND MARKETING PRACTICES: CUSTOMERS
2.1.1 Intel shall not award, offer, grant, pay or extend (hereinafter, collectively, Award â€) any discount, rebate, or other financial or non-financial benefit, inducement or consideration of any kind (hereinafter, collectively, Benefit â€), that is conditioned orally, in writing or through some other express or implied mutual understanding between Intel and the customer, on the customer limiting or restricting, or agreeing to be limited or restricted in, its freedom to satisfy any or all of its demand for microprocessors for Computer Products through the customer’s:
a. exclusive use of x86 Intel Microprocessors, or platforms for Computer Products that include Intel Microprocessors, in all of its business, or in any geography, market segment, product segment, or distribution channel; or
b. limiting or delaying its purchase or use of Specified AMD Products on a geographic, platform, market segment, distribution channel, volume, share of purchase, or any other basis.
PROVIDED, HOWEVER, that nothing in this Section 2.1.1 shall limit Intel’s right (i) to lawfully compete on the merits for selection by the customer for any then-current design award or for satisfaction of any or all of the customer’s then-current demand for microprocessors in a manner consistent with this Agreement or (ii) to condition a Benefit on the exclusive use of Intel microprocessors in a segment or channel where (a) Intel is making a significant, bona fide investment to enable the customer’s entry into such segment or channel, (b) the period of exclusivity is no longer than necessary for Intel to receive a reasonable commercial return on its customer-specific investment in such entry and (c) all of the terms and conditions of such exclusive arrangement, including without limitation its duration and all related consideration, are set forth in a written instrument executed both by Intel and the customer. Nothing in this Section 2.1.1 or any other term in this Agreement shall be construed to constitute AMD’s acquiescence in Intel’s right to engage in any of the conduct described as contested in Section 3.5, and AMD reserves all rights to seek redress for any such conduct occurring after the Effective Date.
2.1.2 Intel shall not Award any Benefit that is conditioned orally, in writing or through some express or implied mutual understanding, on a customer’s:
a. limiting, depositioning or delaying its marketing, promotion, launch, advertising, production, distribution, sale or branding of any product containing an AMD Microprocessor; or
b. forbearance, delay or abstention from participating in, or allowing its products to be featured or exhibited in, any AMD promotional activity, product launch, trade show exhibit, advertising, or public relations campaign.
2.1.3 Intel shall not withhold or threaten to withhold any Benefit, nor impose or threaten to impose any penalty, on the basis of a customer’s refusal to accede to a condition precluded by, or to enter into an understanding prohibited by, Sections 2.1.1 or 2.1.2.
2.2 SALES AND MARKETING PRACTICES: RETAILERS, DISTRIBUTORS, ODMs AND END USERS
2.2.1 Intel shall not Award any Benefit that is conditioned, orally, in writing, or through some other express or implied mutual understanding, on a non-customer Third Party (including without limitation any retailer, distributor, original design manufacturer (” ODM “), original equipment manufacturer (” OEM “), system integrator and value added reseller, but excluding any direct customer and any end user (hereinafter, collectively, ” Non-Customer Third Party “) limiting or restricting, or agreeing to be limited or restricted in, the Non-Customer Third Party’s freedom to satisfy any or all of its demand for microprocessors for Computer Products through the Non-Customer Third Party’s:
a. exclusive use of Intel Microprocessors, platforms for Computer Products that include Intel Microprocessors, or Computer Products containing Intel Microprocessors in all of its business, or in any geography, market segment, product segment, outlet or distribution channel; or
b. limiting, depositioning or delaying its purchase or use of Specified AMD Products on a geographic, platform, market segment, distribution channel, volume, share of purchase, or any other basis.
PROVIDED, HOWEVER, that nothing in this Section 2.2.1 shall limit Intel’s right (i) to compete on the merits for selection by a Non-Customer Third Party for any design win or for satisfaction of any of Non-Customer’s Third Party’s then-current demand for microprocessors or (ii) to condition such a Benefit on the exclusive use of Intel Microprocessors in a segment or channel where (a) Intel is making a significant, bona fide investment to enable the Non-Customer Third Party’s entry into a segment or channel, (b) the period of exclusivity is no longer than reasonably necessary for Intel to receive a reasonable commercial return on its Non-Customer Third Party-specific investment in such entry and (c) all of the terms and conditions of such exclusive arrangement, including without limitation its duration and all related consideration, are set forth in a written instrument executed both by Intel and the Non-Customer Third Party.
2.2.2 Intel shall not Award any Benefit that is conditioned orally, in writing or through some other express or implied mutual understanding, on a Non-Customer Third Party’s:
a. limiting, depositioning or delaying its purchase, sale, design, development, marketing, promotion, launch, production, distribution, branding, advertising, exhibition, offer or display of any Specified AMD Product; or
b. forbearance, delay or abstention from participating in, or allowing itself or its products to be featured or exhibited in, any AMD promotional activity, product launch, trade show exhibit, advertising or public relations campaign.
2.2.3 Intel shall not withhold or threaten to withhold any Benefit on the basis of a Third Party’s refusal to accede to a condition precluded by, or enter into an understanding prohibited by, Sections 2.2.1 and 2.2.2.
2.3
TECHNICAL PRACTICES
Intel shall not include any Artificial Performance Impairment in any Intel product or require any Third Party to include an Artificial Performance Impairment in the Third Party’s product. As used in this Section 2.3, Artificial Performance Impairment †means an affirmative engineering or design action by Intel (but not a failure to act) that (i) degrades the performance or operation of a Specified AMD product,
(ii) is not a consequence of an Intel Product Benefit and (iii) is made intentionally to degrade the performance or operation of a Specified AMD Product. For purposes of this Section 2.3, Product Benefit †shall mean any benefit, advantage, or improvement in terms of performance, operation, price, cost, manufacturability, reliability, compatibility, or ability to operate or enhance the operation of another product.
In no circumstances shall this Section 2.3 impose or be construed to impose any obligation on Intel to (i) take any act that would provide a Product Benefit to any AMD or other non-Intel product, either when such AMD or non-Intel product is used alone or in combination with any other product, (ii) optimize any products for Specified AMD Products, or (iii) provide any technical information, documents, or know how to AMD.
Other Issues Related to Administrative Actions.
a. AMD has challenged as illegal certain alleged Intel pricing practices for Intel Microprocessors and platforms for use in Computer Products by which a price, discount, rebate or other financial benefit ( Discount â€) was conditioned on a customer’s volume or share of such Intel microprocessor purchases from Intel and on the customer’s achieving the qualifying threshold, and was then applied to purchases below the volume level qualifying the customer for the Discount ( Retroactive Discount â€).
b. AMD has challenged as illegal certain alleged Intel pricing practices by which a fund for defraying the cost of Intel Microprocessors for use in Computer Products was established to allow a customer to make bids such that, after accounting for the use of such fund, the cost of the Intel Microprocessor would be below the appropriate measure of variable cost ( Accused Bid Bucket â€).
c. AMD has challenged as illegal certain alleged Intel pricing practices by which a Discount was provided to an end user purchaser of any Computer Product containing an Intel Microprocessor that when combined with any other Discount provided by Intel with respect to the Intel Microprocessor included in the purchased Computer Product, results in an effective Intel Microprocessor price below the appropriate measure of variable cost ( Accused End-User Discount â€).
d. Intel and AMD do not have any understanding or agreement regarding Intel’s freedom to enter into Retroactive Discounts, Accused Bid Buckets and/or Accused End-User Discounts and this Agreement in no way affects or limits Intel’s decisions regarding pricing and discounting or restricts or limits in any way Intel’s complete freedom in setting prices and discounts and in devising and implementing any and all related policies and procedures.
e. Intel agrees that in the event it enters into voluntary settlement discussions with a government authority in the EC Litigation, New York Litigation or the FTC Investigation, and if such government authority proposes to include in a consent judgment or other governmental order a prohibition against Retroactive Discounts, Accused Bid Buckets or Accused End-User Discounts, Intel will not challenge such a prohibition as a general matter, although it may challenge the scope or specific
language of the prohibition. It is expressly understood, however, that Intel remains completely free to litigate and oppose the EC Litigation, New York Litigation and the FTC Investigation to finality and to reject any proposed settlement.
f. Intel understands that AMD will contend to the European Commission, the New York Attorney General and to the U.S. Federal Trade Commission that any Intel Retroactive Discounts, Accused Bid Buckets or Accused End-User Discounts are anticompetitive and unlawful and that they should be prohibited by any consent order or remedial injunction entered in the EC Litigation, New York Litigation and/or the FTC Investigation. In the course of contending for the prohibition of Intel Retroactive Discounts, Accused Bid Buckets or Accused End-User Discounts in accordance with this Section 3.5.d, AMD may disclose to the respective authorities the terms of Sections 2.0 and 3.5 hereto.
3.7 Execution of Contemporaneous Agreements .
a. Intel and AMD shall enter into the New Patent Cross License, and the entry into such agreement is a condition precedent to the effectiveness of this Agreement.
b. Intel and GF shall enter into the GF Agreement, and the entry into such agreement is a condition precedent to the effectiveness of this Agreement.
7.0 DISPUTE RESOLUTION; ENFORCEMENT OF AGREEMENT & FUTURE
RELATIONSHIP
7.1 Claims Subject to Dispute Resolution Processes . The dispute resolution process contained in this Section 7.0 shall apply to and govern the resolution of any and all Disputes that arise in any way from any Post-Effective Date Conduct. For purposes of this Section 7.0, Dispute †shall mean any and all acts, actions and/or Claims by AMD against Intel and all acts, actions and/or Claims by Intel against AMD that a Party suspects, believes, or contends violates or may violate the competition, antitrust, unfair competition, or similar laws of any jurisdiction, and all Claims by any Party arising out of or in any way related to this Agreement or its performance. Each and every Dispute shall be resolved in accordance with the procedures specified in this Section 7.0, which shall constitute the sole and exclusive procedure for the resolution of any such Dispute. The Parties agree to resolve each and every such Dispute through an escalation process as follows: Informal, Private Dispute Resolution Process, followed if necessary by Non-Binding Mediation, followed if necessary by Non-Binding Arbitration, followed if necessary by Litigation, as described in this Section 7.0.