Intel Scores Victory (For Now) In Fight Against $1.3 Billion Fine

Tabitha Dunn
September 8, 2017

It boosts Intel's hopes of overturning a €1.06bn fine and will also buoy the hopes of other USA tech firms including Apple, that have been in sights of the Competition Commission, now headed by Margrethe Vestager.

The CJEU has now ruled that the General Court was obliged to consider Intel's arguments on the point and to determine whether the Commission had applied the "as efficient competitor" (AEC) test correctly.

The Commission had imposed the fine in May 2009 claiming that the United States manufacturing giant which employs thousands of people in Leixlip, had abused its dominant position in the microchip market. Google has said it is considering an appeal.

The European Court of Justice, which previously had upheld a €1 billion fine against Intel imposed in May 2009, has ruled that a lower court of EU judges failed properly to analyse the key question of loyalty rebates offered by the chipmaker to Dell, Hewlett-Packard, NEC and Lenovo.

"The Commission takes note of today's ruling by the European Court of Justice (Case C-413/14 P) and will study the judgment carefully", a spokesperson for the European Commission said in an emailed statement.

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That could make it more hard for small dominant businesses to engage in competition suits, since they couldn't rely on presumptions and would need more proof. But when the General Court denied Intel's appeal of the European Union fine in 2014, it (as was the de facto standard at the time) chose to ignore the application of the AEC test - and by extension Intel's complaints - altogether in its decision-making process.

The General Court had backed the Commission and rejected Intel's initial appeal in its entirety.

In 2009 Intel was slammed with a €1bn ($1.26bn) fine for allegedly urging computer makers to use its chips over rival AMD processors through exclusivity incentives.

Steven R. Rodgers, Intel's general counsel, said: "While this case concerns events that happened more than a decade ago, we have always believed that our actions were lawful and did not harm competition. The case should be referred back to the General Court for a fresh review".

While the commission argued the company's rebates were by their nature anticompetitive, it also carried out an in-depth analysis of the circumstances, proving the rebate scheme was capable of shutting out a rival.

Other reports by Guamnewswatch

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