Intel Agrees to Settle New York Attorney General’s Antitrust Action

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Intel Corporation announced yesterday that it had reached an agreement with the New York State Attorney General to terminate an antitrust lawsuit filed by the state in November 2009. Intel has agreed to pay $6.5 million to cover some of the costs incurred by the New York Attorney General in the litigation. The computer chip maker did not admit to any wrongdoing.

Recent Decisions

The agreement to end the litigation comes after three recent decisions of the federal district court in Wilmington, Delaware, scaling back the suit. In December 2011, the court dismissed the state’s Donnelly Act treble damages claims on behalf of New York consumers and non-state public entities; dismissed its Donnelly Act claims on behalf of non-state public entities, such as political subdivisions, local entities, and public authorities; and granted Intel’s motion for partial summary judgment on statute of limitations grounds (2011-2 Trade Cases ¶77,711, 2011-2 Trade Cases ¶77,712, 2011-2 Trade Cases ¶77,713).

The settlement agreement states that the decisions in favor of Intel “effectively eviscerated the State’s damages claims.” The settlement “releases Intel from all claims, known or unknown, including claims assigned to the State, up through the date of execution of the Settlement Agreement, that were or could have been asserted in the Action . . . .” Pursuant to the settlement, the New York Attorney General will terminate its investigation into Intel.

Exclusionary Conduct

The state filed the action in November 2009, alleging that Intel engaged in a systematic worldwide campaign of illegal, exclusionary conduct to maintain its monopoly power and prices in the market for x86 microprocessors, the “brains” of personal computers (PCs).

The state alleged violations of the Sherman Act and New York’s Donnelly Act and Executive Law. It sought monetary relief on behalf of the state as a purchaser of computers containing x86 microprocessors, as well as New York consumers and non-state public entities who purchased such computers. In addition, the state sought injunctive and other equitable relief.

“Following recent court rulings in Intel’s favor that significantly and appropriately narrowed the scope of this case, we were able to reach an agreement with New York to bring to an end what remained of the case,” said Doug Melamed, senior vice president and general counsel at Intel, in a February 9 news release.

“We have always said that Intel’s business practices are lawful, pro-competitive and beneficial to consumers, and we are pleased this matter has been resolved,” Melamed stated.

The case is State of New York v. Intel Corp., U.S. District Court, D. Delaware. No. 09-827-LPS. A copy of the settlement agreement appears here.