No escape. After successfully overturning last year its 2009 antitrust fine of €1.06 billion, European Commission re-imposes fine of €376.4m
Chip giant Intel has once again been hit with a huge antitrust fine from the European Commission (EC) – 18 months after it successfully overturned an even larger antitrust fine.
It was back in 2009 when the EC had slapped Intel with a €1.06 billion ($1.13 billion) antitrust fine, after officials accused Intel of abusing its market position by trying to block rival Advanced Micro Devices (AMD) by giving rebates to Dell, Hewlett-Packard Co, NEC and Lenovo to buy Intel chips.
Intel fought against this fine for over 13 years. For example in March 2020 Intel told a European court that the 2009 European Commission antitrust decision was ‘fundamentally flawed.’
At the time Intel said that the EC either took a wrong approach in its decision, or it carried out an efficient competitor (AEC) test and got it wrong.
An AEC test is an economic analysis that determines if a dominant company forces out competitors that are as efficient or more efficient through anti-competitive practices.
The Luxembourg-based General Court, Europe’s second-highest court agreed with Intel in January 2022, after it criticised the EU competition enforcer’s analysis, and annulled the fine.
“The (European) Commission’s analysis is incomplete and does not make it possible to establish to the requisite legal standard that the rebates at issue were capable of having, or likely to have, anticompetitive effects,” the court had stated last year.
This was despite the same court in 2014 having upheld the Commission’s 2009 decision but was subsequently told in 2017 by the EU Court of Justice, Europe’s highest, to re-examine Intel’s appeal.
The Commission had appealed the other parts of the General Court’s ruling last year related to conditional rebates offered by Intel at the EU Court of Justice, Europe’s top court.
Now the European Commission has decided to issue a fine against Intel once again, but at a lower level.
“The European Commission has re-imposed a fine of around €376.36 million on Intel for a previously established abuse of dominant position in the market for computer chips called x86 central processing units (‘CPUs’),” it stated.
“Intel engaged in a series of anticompetitive practices aimed at excluding competitors from the relevant market in breach of EU antitrust rules,” EC said on Friday.
Over a decade ago EU officials had alleged Intel had engaged in “illegal anticompetitive practices to exclude competitors from the market for computer chips”.
Essentially, the EC based its case on complaints – in 2000, 2003 and 2006 – from rival chip-maker AMD. It said that Intel “interfered directly in the relations between computer manufacturers and AMD”.
EC officials concluded in 2009 that Intel’s alleged illegal activity took two forms.
Firstly, Intel gave rebates to computer vendors on the condition that they bought their x86 processors from the chip maker and made direct payments to one major retailer on the condition that only stocked PCs with Intel chips.
Secondly, the EC also claimed that Intel made payments to computer makers to delay the release of products using alternative x86 processors.
The EC noted that when the General Court partially annulled the 2009 Commission’s decision in 2022, the court did however confirm that Intel’s naked restrictions amounted to an abuse of dominant market position under EU competition rules.
The EC said that following this judgement, the Commission is today adopting a new decision imposing a fine on Intel only for the naked restrictions,.
It said these restrictions took place between November 2002 and December 2006 and consisted in payments made by Intel to three computer manufacturers (i.e., HP, Acer and Lenovo) to halt or delay the launch of specific products containing competitors’ x86 CPUs and to limit the sales channels available to these products.
“With today’s decision, we are re-imposing a €376.36 million fine on Intel for having abused its dominant position in the computer chips market,” stated Commissioner Didier Reynders, in charge of competition policy.
“Intel paid its customers to limit, delay or cancel the sale of products containing computer chips of its main rival,” said Reynders. “This is illegal under our competition rules. Our decision shows the Commission’s commitment to ensure that very serious antitrust breaches do not go unsanctioned.”
Intel told Reuters it was assessing its options.
“We are analysing the decision and the amount of the fine to determine the possible grounds and prospects of success of an appeal to the European Courts,” the company said in a statement.