Intel will pay $1.2B to settle dispute

SAN FRANCISCO (AP) — Intel Corp. will pay $1.25 billion to make peace with Advanced Micro Devices Inc., as the companies whose microprocessors run nearly all personal computers finally found common ground in a bitter and colorful dispute that caused international antitrust trouble for Intel.

The settlement announced Thursday sent AMD stock soaring and ended a 4-year-old lawsuit in which AMD accused Intel of abusing its dominance of the chip market to keep a lid on AMD's share. Intel has about 80 percent of the microprocessor market, and AMD has about 20 percent.

According to the lawsuit, Intel penalized computer makers for using AMD's chips or offered them financial incentives — payments that a Toshiba Corp. manager likened to "cocaine." Executives from Gateway complained that Intel's threats of retaliation for working with AMD beat them "into guacamole."

Intel has defended its practices, saying it simply offered rebates to big customers, which allowed them to pass lower PC prices to consumers.