THE 11th-hour deal this week between Intel and US antitrust officials marked an abrupt and surprising end to litigation which neither side appeared keen to pursue.

Central to the case were allegations that the world's largest chip maker sought to bully its customers into handing over their technology rights. In the run-up to the monopoly trial - which was due to start on Tuesday - both Intel and the Federal Trade Commission attempted to play down the confrontational nature of the lawsuit.

In particular, they made strenuous attempts to highlight contrasts between their dispute and the long-running and acrimonious trial of Microsoft, Intel's long-time software partner, in the federal courthouse across the street from the FTC's headquarters.

Similar last-minute negotiations between Microsoft and antitrust officials at the US Justice Department in May served only to deepen the rift between the world's largest software company and the government.

The more reasoned approach of both Intel and the FTC has avoided long and expensive litigation. It also means that, unlike Microsoft, Intel will not face the embarrassment of having its executives cross-examined by US government lawyers and its actions scrutinised in a public forum.

Intel insisted on Monday it had not conceded that it held a monopoly in the market for microprocessor chips, although the company dominates the field. Details of the settlement will not be released until it is voted on by members of the Commission.

Yet to emerge is how far both sides were forced to compromise. An important issue is whether Intel will be precluded, in future, from giving preferential access to its technology to favoured customers.

At issue in the case was Intel's treatment of three companies - Intergraph, Compaq Computer and Digital Equipment (now part of Compaq) - with which it had legal disputes over intellectual property rights. The FTC accused Intel of abusing its monopoly power by withholding new chips and technical information from these customers. The alleged victims were all ready to testify in court against Intel.

However, Intel said on Monday it was satisfied that the agreement "gives us value for our intellectual property rights".

Legal experts said the FTC's case stretched antitrust law to new limits in policing the computer industry and the requirements placed on companies with alleged monopoly power.

Mr Tom Campbell, a Republican congressman from California and former competition director at the FTC, said: "Under antitrust law, a monopolist has been held to have obligations to his competitors. But the FTC says that in addition to that, a monopolist has an obligation as to how to deal with its customers, that there should be a code of conduct - which is without precedent."

The FTC was on shaky ground, Intel insisted in a pre-trial brief. The government agency was attempting to intervene in private disputes, Intel said, and had not demonstrated any harm to competition.

Even the government's own economic expert had found no direct evidence of harm to competition, Intel noted.

The FTC had also been attempting to prove that Intel's dominance in the chip market had a chilling effect on innovation, but Intel produced plenty of evidence to the contrary.

While the principles of the case may be wide ranging, the direct result of the settlement is likely to be fairly limited. The FTC originally asked the court to order Intel simply to "cease and desist" from such discriminatory conduct.

But FTC officials said their lawsuit was partly designed as a shot across the bows of Intel. They said the case aimed to discourage further antitrust abuses and establish confidence in the wider industry that the FTC was prepared to take action against the chip industry giant.

Moreover, the Commission is continuing a broader investigation of Intel's conduct. This is understood to be focused on the company's moves to expand into different segments of the chip market, such as personal computer chip sets and graphics processors.

Intel insists its behaviour has been lawful, but any charges to the contrary could land the company back in Washington facing a case that could be remarkably similar to that against Microsoft.