Intel Corp (INTC)

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Intel Settles Pentium 4 Lawsuit by Paying $15 to Customers

http://finance.yahoo.com/news/intel-settles-pentium-4-lawsuit-223707959.html

Chipmaker Intel Corporation (INTC) has agreed to settle a 10 year old Pentium 4 Benchmark Manipulation Class Action Lawsuit by offering $15 to Pentium 4-powered PC owners. The eligible buyers will need to show proof that they bought the PC/PCs between Nov 2000 to Dec 2001 or between Jan 2002 and Jun 2002.

A lawsuit was filed against Intel in California on behalf of those who purchased Intel Pentium 4-based PC in the U.S. from Nov 20, 2000 to Jun 30, 2002. The lawsuit claimed that the chipmaker manipulated benchmark scores for its first-generation Pentium 4 processors in 2000 by using its considerable resources in the computing world.

Intel’s Pentium-4 processor series was based on a new microarchitecture called Netburst. But Pentium-4 processors were not as famous as its predecessors Pentium-3, nor were they as competitively priced as Advanced Micro Devices’ (AMD) Athlon Thunderbird.

Therefore, Intel tried to mislead customers by misrepresenting the performance capabilities of the Pentium 4-processor to show that it was better than AMD Athlon Thunderbird. The lawsuit claims that Intel cheated on customers by introducing benchmarking tests called WebMark 2001 and SYSmark 2001, which showed that Pentium-4 processors were superior than Pentium III and Athlon Thunderbird.

The lawsuit also alleges that Hewlett-Packard (HPQ) was privy to the matter and had helped Intel in this misconduct. Though neither company admitted any wrongdoing, they have agreed to settle the lawsuit.

Though $15 is minimal, it’s better than nothing. Intel will also donate $4 million in educational charities as a part of the settlement.