Intel Back in Court to Fight EU's 2009 $1.4 Billion Fine

By Jeffrey Burt  |  Posted 2016-06-22 Print this article Print
Intel chip

Intel lawyers told the European Union's Court of Justice that antitrust regulators erred in their decision and that the fine is unfair.

Intel is continuing to fight the $1.4 billion fine levied seven years ago by European regulators who said the giant chip maker used its dominant position in the market to illegally try to keep PC makers from using processors from rival Advanced Micro Devices.

Two years after the company lost its bid in the European Union General Court to have the fine overturned or lowered, Intel lawyers are back in court arguing that the European Commission (EC)—the antitrust arm of the European Union—was wrong when it ruled that Intel acted improperly in offering loyalty rebates to PC makers like Dell, Hewlett-Packard, Acer, Lenovo and NEC between 2002 and 2005 to buy 95 percent of the chips for their systems from Intel.

In addition, Intel was accused of putting stringent restrictions on the other 5 percent of PCs not using its processors, and of paying Media-Saturn, a retail chain in Germany, to only sell systems powered by Intel chips.

Regulators argued that Intel's business practices effectively shut out AMD from participating in the European PC market and deprived PC makers and end users of being able to take advantage of lower prices that may have been available had the competitive playing field not been tilted in favor of Intel. Along with the fine, antitrust regulators also ordered Intel to stop offering illegal rebates.

Intel officials have been vocal in disputing the claims, saying that the company competed aggressively against AMD and others, but that its business practices never violated antitrust or other laws. It is an argument they've continued to make during the appeals process, which started three years after the initial EC decision and fine was announced.

The EU General Court in 2014 ruled that regulators were correct in their assessments and that the fine was legitimate. The court "considers that none of the arguments raised by Intel supports the conclusion that the fine imposed is disproportionate," officials with the EU's second-highest court said in a statement at the time. "On the contrary, it must be considered that that fine is appropriate in the light of the facts of the case."

Intel appealed that decision to the EU's Court of Justice in Luxembourg, During a hearing June 21 in front of the court, Intel lawyers reiterated prior arguments that the commission relied on inadequate information and erred in their analysis of the data, according to a report by Bloomberg. At the hearing, commission lawyer Nicholas Khan argued to the court that the crux of the argument is whether a company with a dominant market share like Intel "can pursue a commercial strategy, the focus of which is the marginalization or even the elimination of its only competitor," according to Bloomberg.

No timeline for a ruling has been released.

The EC investigation was one of several conducted by government agencies worldwide against Intel for what they said were anti-competitive business practices to unfairly depress the use of AMD chips in PCs, which harmed consumers by limiting choice and competition.

Intel several years ago settled the bulk of the investigations and lawsuits related to the unfair practices allegations. Intel and AMD in 2009—after the European Commission issued its fine—settled their legal disputes in a 10-year deal that included Intel paying AMD $1.25 billion and agreeing not to use a range of anti-competitive business practices. Intel executives reiterated that the company had done nothing wrong.


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