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By | John Oates 12th November 2009 16:41

AMD squeezes promises from Intel

And it is 'still obliged to follow the law'

AMD and Intel's agreement to settle legal disputes around the world includes a provision which would stop Intel fighting action from any regulator which tries to change its discount and pricing regime.

The $1.25bn settlement sees AMD cease all legal action and withdraw all complaints to national regulators - although of course those regulators may continue their own investigations.

Speaking on a conference call AMD's chief exec Dirk Meyer said the deal marked a pivot between war and peace and "will create freedom of action for resellers and OEM partners. Intel will no longer be allowed to condition not doing business with AMD as a condition of doing business with Intel."

Meyer said: "If asked [by a regulator] we will say that the agreement resolves disputes between us. There are some practices we think are unfair which we will continue to ask regulator to address."

Pressed on exactly what these practices were, Meyer said: "The agreement has provisions on how Intel structures pricing. But we don't have agreement on Intel's retroactive discounts and rebates rather than volume discounts. The agreement says that if Intel enters settlement negotiations with a regulator that includes provision against these bans then Intel won't challenge them.

So it appears, in part at least, that Intel has been forced to accept the provisions laid down by the recent European Commission verdict, despite strongly objecting to it at the time.

The Commission found in its verdict that Intel was making deals conditional on computer makers agreeing not to stock or sell AMD-based computers. It also offered more generous marketing funds to Intel-only shops.

AMD believes the deal will transform the market, but not instantly. "It will take some time for market to operate in more open fashion. But then AMD will have the chance to succeed based on products which in the past wasn't always the case."

Intel is still facing legal action in New York on anti-trust charges. The European Commission hit it with the largest ever fine in May. European Commission spokesman Jonathan Todd told SJMercury News that the agreement was noted but did not change Intel's obligation to follow European law.

The deal also includes a five-year cross licensing deal and agreement on Global Foundries - the structure of which was at the centre of Intel's patent fight with AMD. ®

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