After a much publicised legal battle, the USA’s Federal Trade Commission and tech giants Intel have announced that they have agreed to settle charges of anticompetitive behavior that the agency claimed “stifled competition” in the market for computer processing and graphics chips.

AMD should benefit heavily from today's ruling.

The New York Times reveals that the settlement prohibits Intel from the practice of paying customers to buy its computer chips exclusively or to refuse to buy chips from other manufacturers. It also prohibits Intel from redesigning its chips purely to harm a competitor. Intel also agreed not to retaliate against computer makers if they do business with non-Intel suppliers.

Jon Leibowitz, the chairman of the FTC, said that the settlement “provides ‘fencing-in’ protection to ensure that Intel doesn’t come up with new ways to undermine competition”. He added that, “Just as important, it provides this relief right away, so it helps consumers now, which is critical in a dynamic industry such as this one.”

AMD – Intel’s main competitor in the chips market – also released a statement after the ruling. It commented that the FTC has acted firmly in the interest of American consumers to safeguard the competitive process in the “critically important microprocessor and graphics markets”.

The statement continued, “In our settlement with Intel, AMD’s critical remaining concern was Intel’s use of all-or-nothing discounts to deny competitors’ access to the marketplace. The FTC’s order clearly and firmly prohibits such abuse and guarantees ongoing monitoring of Intel’s conduct. A level playing field is AMD’s goal, and we are confident that our world-class computing and graphics processors will deliver great value and benefit to consumers in a fair and open marketplace.”

The far reaching settlement also requires Intel to modify agreements with other chipmakers giving them the freedom to merge or form joint ventures without the threat of being sued by Intel for patent infringement.

The NY Times also report that under the terms agreed today, “Intel is also required to maintain for at least six years a feature that will not limit the performance of graphics processing chips made by others, and to disclose that its computer compilers might discriminate between its chips and those of other companies, and therefore not might register all of the features of non-Intel chips.”

The trade commission brought its suit in December, claiming that Intel, the world’s leading computer chipmaker, for at least a decade has illegally used its dominant market position to stifle competition and strengthen its monopoly.