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Long-standing anti-trust litigation between Intel and the EU Commission looks set to continue as the European Court of Justice today set aside a key judgement made by the General Court. The case, which alleges that Intel paid key partners to use Intel's products exclusively, has been sent back to the General Court to be weighed up anew.
Intel's difficulties in the EU stem from accusations made by the EU Commission in 2007. The Commission alleged that from 2003 Intel engaged in anti-competitive behaviour against their competition - mainly AMD - by providing preferential pricing structures to large customers and selling below cost to ensure market share. For their part Intel claimed at the time that investigators made inaccurate assumptions of manufacturing costs, undermining their case.
In 2009, after investigations that included the raiding of Intel's Munich offices, the EU found against Intel and fined them €1.1bn (a record amount for the time):
The European Commission has imposed a fine of €1 060 000 000 on Intel Corporation for violating EC Treaty antitrust rules on the abuse of a dominant market position by engaging in illegal anticompetitive practices to exclude competitors from the market for computer chips called x86 central processing units (CPUs).
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The Commission found that Intel engaged in two specific forms of illegal practice. First, Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel. Intel also made direct payments to a major retailer on condition it stock only computers with Intel x86 CPUs.
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Second, Intel made direct payments to computer manufacturers to halt or delay the launch of specific products containing competitors’ x86 CPUs and to limit the sales channels available to these products. The Commission found that these practices constituted abuses of Intel’s dominant position on the x86 CPU market that harmed consumers throughout the EEA.
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The Commission found that Intel engaged in two specific forms of illegal practice. First, Intel gave wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel. Intel also made direct payments to a major retailer on condition it stock only computers with Intel x86 CPUs.
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Second, Intel made direct payments to computer manufacturers to halt or delay the launch of specific products containing competitors’ x86 CPUs and to limit the sales channels available to these products. The Commission found that these practices constituted abuses of Intel’s dominant position on the x86 CPU market that harmed consumers throughout the EEA.
This ruling was also seen as a watershed moment for the Commission, allowing it to be seen as an effective regulator of big business who could use deep pockets and market position to wield undue influence over the marketplace. It was later upheld in 2014 by the General Court, who also confirmed that the size of the fine was appropriate.
Today's judgement by the European Court of Justice asks the General Court to look again at the capacity for the rebates offered by Intel to customers and retailers to affect the market. In 2016 an influential advisor to the Court adopted Intel's position that rebates and payments such that those alleged may not be harmful to consumers, and hence that such a large line wouldn't be warranted.
The judgement could in tern have a major impact on other anti-trust cases currently being investigated by the Commission against the likes of Apple and Qualcomm, many of which hinge on similar rebates being deemed anti-consumer.
SOURCE: Reuters
