Lawyers for the chip maker claim European regulators conducted a faulty investigation into claims that Intel’s business practices harmed rival AMD.
Intel is asking a European court to overturn
a $1.33 billion fine by antitrust regulators in 2009, claiming investigators
relied on inadequate evidence and erred in their analysis.
Lawyers for Intel and the European Commission
(EC)the antitrust arm of the European Union (EU)were in Luxembourg July 3
arguing before five judges at the General Court over the fine
levied by the EC in 2009
, when regulators said that rebates given by Intel
to systems makers Hewlett-Packard, Dell, NEC and Lenovo illegally harmed
smaller rival Advanced Micro Devices and consumers.
The EC issued the fine after an eight-month
investigation, and during a time that Intel was being investigated in the
United States as well as Europe over its business practices. AMD also was suing
Intel. The allegations in the investigations and lawsuit were essentially the
samethat Intel was using rebates and similar financial incentives to convince
OEMs to limit their use of AMD processors in their systems.
European antitrust regulators said the
financial incentives hurt competition and limited product options for
consumers. Intel executives pushed back at investigations on both sides of the
Atlantic, saying that while the worlds largest chip maker competed
aggressively against AMD and others, its business practices never violated
antitrust or other laws.
According to a report
, Intel attorney Nicholas Green told the General Court
that the ECs investigation was faulty, relying on insufficient evidence and
the subjective beliefs of Intels customers.
"The quality of evidence relied on by
the Commission is profoundly inadequate, Green said. The analysis is
hopelessly and irretrievably defective. The Commission's case turns on what
customers' subjective understanding is."
EC attorney Nicholas Khan argued that the
rebates were the key to Intels illegal practices.
"These kinds of rebates can only be
intended to tie customers and put competitors in an unfavorable position,"
Khan said, according to Reuters
. Khan added that the wording in some
contracts with OEMs illustrated that "Intel carefully camouflaged its
The $1.33 billion fine drew sharp reaction in
both Europe and the United States, with some applauding the ruling as a victory
for fair competition and others saying it threatened jobs and economic growth.
Intel got a boost to its argument six months
after the fine was announced when an EU
the investigation, accusing investigators of
maladministration for failing to take notes during an interview with a Dell
executive in 2006. Intel executives said the ombudsmans report supported their
contention that ECs investigation was biased and ignored evidence that was
favorable to Intel.
The General Court is expected to rule
sometime over the next few months.
Intel over the past few years has settled
most of the investigations and lawsuits related to issues over its business
practices. In November 2009, Intel
settled their legal disputes in a 10-year agreement that included
Intel paying AMD $1.25 billion and agreeing to a list of anti-competitive
business practices that cant be used. Intel executives said that despite the
settlement, they were adamant that the companys practices were not anti-competitive.
In 2010, Intel settled with the U.S.
Federal Trade Commission
, again agreeing to a list of restrictions on its
business practices and again denying any wrongdoing in the case. In February, Intel
and the New York Attorney Generals Office
settled a lawsuit brought by
that state, with Intel agreeing to pay $6.5 million to cover some of the costs
incurred in the litigation.