There are wide-ranging reports, including this one from the San Jose Mercury News, that Intel and the Federal Trade Commission are in settlement talks and a resolution may be imminent.
Given the history of the FTC and technology companies, this is not surprising. They aim for settlement and wrist-slaps as opposed to brack-beaking fines, unlike the Euro trade commission, whose goal is often to slow down as many American technology companies as possible with gigantic fines. Intel was fined $1.5 billion by the EU last year.
The basic claim is that Intel used customer rebates and discounts, as well as other tactics, to unfairly compete with competitors AMD and Nvidia.
Gleacher & Company is out with a report today saying they do not expect any big fireworks in the settlement, but rather a consent degree that is already priced into Intel’s stock. Gleacher says a settlement could be more of a “tailwind” for AMD than Nvidia.
“The FTC is unlikely to issue a fine in the same way the EU did. It is likely to issue a consent decree, whereby INTC is required to comply with certain practices as outlined by the FTC; non-compliance could result in criminal prosecution,” says the Gleacher note, issued by analysts Doug Freedman and Ian Eng.
Overall, Gleacher expects the market to react favorably to a settlement for AMD, negatively for NVDA. It has a favorable opinion of Intel going forward.