Settlement looks likely in AMD-Intel civil case

The word on the chip strasse is that Intel and AMD may well reach a settlement before the long-running civil case between the companies comes to court in spring 2010.

Let’s quickly go back to the beginnings of this case. AMD sued Intel in a Delaware district court in June 2005 in a very long filing that alleged all manners of misbehavior by the chip giant.

Since then, the case has developed legs greater than a million millipedes, with filing upon filing constituting a veritable K2 of documents and no doubt filling lawyers’ pockets with endless dollars.

A number of other things has happened too – the most recent being a European Commission filing a week ago and one, moreover, that Intel’s CEO Paul Otellini swiftly rubbished in a Q&A at its Developer Forum last week.

Many of the  documents are redacted, that is to say edited, so we’ll never know the complexities of the case, alas.

But talking to both parties off the record, it appears that it’s in both AMD’s and Intel’s interests that the case never comes to trial. Say the trial begins in front of a jury in Spring next year and the jury finds in Intel’s favor. AMD will appeal immediately. Say the trial begins in front of a jury in Spring next year and the jury finds in AMD’s flavor. Intel will appeal immediately.

Intel stands to be fined something like $9 billion – that’s about twice as much as two fabs cost to build, or nine times the cost of moving from one process technology to another.

Sources close to both companies told us last week that there was every indication that the case will never come to trial and there is likely to be a settlement. If and when that happens, all we’ll ever see is a press release saying both companies have come to an agreement, with financial terms not disclosed.

There is, however, a complicating factor. After AMD filed the original civil antitrust suit, 80 other class actions started – these were consolidated some time ago. While it’s definitely in AMD and Intel’s interests to come to a settlement and put the past behind them, they cannot dispose of the class actions so simply.

Unless the ways and means committees at the chip companies come up with some cunning plan, that means both may be forced to continue shelling shedloads of dollars into the pockets of lawyers already grown fat on the surfeit of documents.

Is it in the interests of consumers – that is to say people – that this case be heard? Yes. Will this case be heard despite the best efforts of Intel and AMD and because of the class action suits? On that, the jury remains out.

See Also

Intel’s Otellini categorically denies EU antitrust allegations