Intel Celebrates As EU Court Strikes Down 2009 Antitrust Fine

The European Commission has been handed a significant setback, after one of its early antitrust fines against an American tech giant has been dismissed by a European court.

It was back in 2009 when the European Commission (EC) hit Intel with a €1.06 billion ($1.2 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 however has been fighting against this fine for over 12 years now. In March 2020 Intel told a European court that the 2009 European Commission antitrust decision was ‘fundamentally flawed.’

Court ruling

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.

And it seems the Luxembourg-based General Court, Europe’s second-highest court agrees, 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 judges were quoted as saying by Reuters.

The court annulled the entire article of the contested decision.

The Commission said it would study the judgement and reflect on the possible next steps.

The same court had in 2014 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 ruling is a major setback to European antitrust regulators and will offer some comfort to the likes of Alphabet (Google), Amazon and Qualcomm, which have already been stung with EU antitrust fines, as well as Apple and Meta (Facebook) that are facing EC investigations.

This week’s ruling can however be appealed to the CJEU, meaning this particular case may not be over just yet.

Antitrust fine

But what exactly does this Intel case centre around?

Over a decade ago EU officials 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.

Long running

The EC issued its fine back in 2009.

But right from the start Intel protested, and in 2012 it filed an appeal against the decision, arguing that the antitrust arm of the European Union had failed to prove that Intel unlawfully hindered AMD’s abilities to do business, and that the fine – the largest ever levied by the commission (at that time) – was “manifestly disproportionate” with other fines levied by the EC.

It is worth remembering that Intel did have an ally in the EC’s ombudsman, who in November 2009 criticised the commission for improperly recording a meeting with a Dell executive during the course of its investigation. The ombudsman accused the European regulators of “maladministration.”

It is also worth remembering that AMD had settled its own legal dispute with Intel in November 2009.

Intel paid AMD $1.25 billion and agreed to a set of business practice provisions.

But in 2014 Intel lost an appeal with the European General Court, which prompted Intel to state at the time that “we are very disappointed with the decision.”

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

Recent Posts

Google Sued For Use Of NHS Data Of 1.6 Million Brits

Lawsuit alleges Google and Deepmind Technologies used NHS data of 1.6 million Britons 'without their…

8 hours ago

Twitter Sees Three More Executive Departures

Three executives apparently jump ship. More high level departures at Twitter, ahead of Elon Musk's…

10 hours ago

Apple Delays Staff Mandate For Three Days A Week In Office – Report

Tech giant blames rising Covid cases as it again pushes back return to office deadline,…

13 hours ago

Tesla Bluetooth Locks Can Be Hacked, Warns NCC Group

Digital locks, including those fitted to Tesla vehicles, are vulnerable to being unlocked via an…

16 hours ago

Twitter Board To ‘Enforce’ Elon Musk Merger Agreement

Legal action ahead? Elon Musk's takeover agreement of Twitter will be enforced says board of…

17 hours ago