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NOW THAT IT'S ALL SETTLED and Intel and AMD aren't at daggers drawn in court any longer, what went into the deal settling their various legal disagreements and litigation? The full settlement agreement has not yet been published but reportedly will be shortly.Both AMD and Intel held conference calls this afternoon, or rather this morning at their headquarters on the US Pacific coast, going over what's in the deal, the terms of the settlement and how both companies 'are winners'.AMD was first with CEO Dirk Meyer going over the three components to the agreement. First, Intel has agreed to a set of ground rules that both companies are to abide by to "ensure an open and free market". There's a new patent cross licensing agreement using multiple foundries, with Global Foundries agreeing to continue as a foundry under the new terms. Finally Intel has agreed to pay AMD $1.25 billion, which is to be paid in cash within thirty days.In return AMD will drop nearly all of the regulatory complaints it has made against Intel throughout the world. However it was quick to point out that there are some practices that are exclusionary and "a narrow set of complaints" will be addressed to the regulators.One of the matters that will still go through the courts is the lawsuit filed against Intel last week for threatening computer makers and paying billions of dollars in kickbacks, filed by New York Attorney General Andrew Cuomo. The State of New York is not one of the parties to the settlement agreement.AMD and Intel also don't have agreement on retroactive rebates and discounts, so that will be one of the ongoing areas for discussion between the two companies.Speaking for AMD about the business practices guidelines that were agreed upon, Meyer said, "Intel will no longer be allowed to condition not doing business with AMD as a condition of doing business with Intel."Intel's response to the settlement was rather, 'we never did anything anyway'. Speaking on Intel's conference call, CEO Paul Otellini said, "They believe we conduct business in a way that we don't believe we do. What made sense is that we all agree what shouldn't be done so let's write it down and sign it and agree to it."The patent cross licensing agreements, Otellini revealed, will be in force for the next five years, then there will be the option to renew them. Otellini said, "There will also be quarterly meetings to discuss whether there have been any breaches. If [there are] any violations they can come to us and have a discussion as business people rather than taking it through the courts." With regard to the $1.25 billion he'll be handing over to AMD in cash, Otellini explained that an antitrust case in front of a jury means that costs could be trebled. In many ways, he feels, the $1.25 billion was a small proportion of what Intel could have been paying in front of a jury. When asked whether this was an admission of guilt, he snapped that 98 per cent of people settle in private antitrust cases in the US and that Intel will continue to do business the same way it has been.AMD said that the spun-off manufacturing division of AMD, Global Foundries, is well positioned to establish itself as a leading player in the industry and also said that the settlement "paves the way towards Global Foundries and Chartered for a merger"."The end of the legal wrangling is good news for both companies," said the CEO of Context, Jeremy Davies. "The $1.25 billion Intel will pay AMD is certainly a welcome cash boost for the company. With AMD withdrawing its regulatory complaints worldwide, hopefully both Intel and AMD will now be able to focus more of their efforts on providing support to their channel in Europe."AMD CEO Dirk Meyer said, "We look forward to healthy competition with the mutual respect one would expect between world-class competitors."That was quite different from Intel CEO Paul Otellini's stance of, "No changes at all in Intel's behaviour. Full stop."But those differing statements and the attitudes they suggest are just reflections of the two companies' respective strategic positions going into this settlement, and as such, are not at all surprising.
