Tech battle cools after settlement

A lobbying battle between two tech companies is expected to cool in the wake of a billion-dollar settlement.

Intel reached a $1.25 billion agreement with Advanced Micro Devices (AMD) on Nov. 12. Many lobbyists throughout the tech industry predict that will lead to a cease-fire between the two chipmakers on the lobbying front.

The two companies had beefed up their lobbying budgets over the past year, hoping to influence the Obama administration in a four-year legal tussle that began when AMD accused Intel of paying computer makers not to use the rival company’s chips.

As part of the settlement, AMD, the Sunnyvale, Calif.-based company, will withdraw all of its regulatory complaints worldwide against the company. In addition, its antitrust litigation will be dropped, though AMD still has concerns about Intel’s pricing practices.

Both companies were bracing for a new era in antitrust enforcement after the 2008 elections. President Barack Obama has promised a more diligent Justice Department and Federal Trade Commission (FTC) to stop anti-competitive practices by companies.

Accordingly, Intel and AMD both sought some of Washington’s most influential lobbyists in preparation.

The agreement could prompt other suers that had also taken issue with Intel to settle their complaints. One tech trade association that has campaigned against Intel for what it considers its anti-competitive behavior is considering what to do next.

In a statement on Nov. 12, Ed Black, president and CEO of the Computer and Communications Industry Association (CCIA), applauded Intel for reaching an agreement with AMD. His trade association has sponsored a print and Web ad campaign decrying Intel since May after the European Union fined the Santa Clara, Calif.-based company $1.45 billion for its alleged illegal business practices. Intel is appealing that decision.

“We intend to carefully review Intel’s follow-on actions, the reactions of other companies and the various enforcement agencies involved,” Black told The Hill regarding his trade group’s ad campaign.

The campaign was already put on hold, though, because New York State Attorney General Andrew Cuomo (D) sued Intel earlier this month over allegedly paying computer manufacturers not to use its rivals’ chips.

AMD is a member company of CCIA; Intel is not. Black said not just AMD but other companies within and outside of his association were worried by Intel’s business practices.

“A number of our members and companies in the industry have had great concern about Intel’s actions, and their reaction to the settlement needs to be fully understood,” Black said.

CCIA has a history of confronting tech companies over alleged anti-competitive behavior. The trade group jousted with Microsoft when the software company was dealing with the Justice Department’s antitrust division in the late 1990s. In addition, the trade association called out IBM for its market domination of mainframe computers in a report released earlier this month regarding the Social Security Administration’s aging IT infrastructure.

The settlement could help Intel in resolving other outstanding legal issues confronting the company. Chuck Malloy, a company spokesman, said Intel executives plan to meet this week with the FTC, which has opened an investigation into the company, to discuss its settlement with AMD.

In addition, Intel believes the agreement will give it impetus to end more than 80 class-action lawsuits filed in Delaware against the company that were based on AMD’s complaints. Intel, however, plans to litigate the antitrust suit brought by Cuomo in New York.

Bracing for its antitrust battles, the chipmaker upped its lobbying in Washington this year. Intel has spent close to $2.9 million on lobbying in 2009 so far, already beating its 2008 total by roughly $700,000, according to lobbying disclosure records.

Its K Street roster has included powerful and well-connected firms, such as American Continental Group and Cassidy & Associates. It also hired Peter Cleveland, former chief of staff to Sen. Dianne Feinstein (D-Calif.), after the November 2008 elections to run its in-house lobbying team.

Overall, Intel has 10 outside lobbying groups working for it this year, including five firms, like Franklin Square Group and Capitol Hill Strategies, that signed up for the company in this year alone.

AMD is no slouch either on the lobbying front, though it is not quite in the same league as its rival. The company could outpace its 2008 lobbying total of $650,000, spending close to $600,000 thus far this year. Along with its own lobbyists, AMD has several outside firms, including the Glover Park Group, Navigators Global and Potomac Counsel working for it.

Those on K Street outside of the battle between Intel and AMD said they believe the billion-dollar settlement will end the dispute. But others suggested it was only a stalemate until the companies run afoul of each other again.

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