Intel appeals $1.33bn antitrust fine to EU's second highest court

By Lee Kaelin on July 5, 2012, 9:30 AM

Intel has appealed a record antitrust fine against it, labeling the evidence used in the case by European antitrust regulators as "profoundly inadequate". The company was ordered to pay a €1.06 billion ($1.33bn) fine for anti-competitive practices against competitor Advanced Micro Devices (AMD).

In 2009, EU regulators found Intel guilty of engaging in ant-competitive behavior in a bid to hinder competitor AMD with the use of rebates and contract conditions resulting in its products being favored more kindly by OEMs like Dell, HP and Lenovo. The eight-year investigation resulted in Intel receiving a fine equal to 4.15-percent of its 2008 annual turnover, the largest ever levied by the Commission. However, due to economic fluctuations the amount now stands at $1.34 billion.

This week Intel started the formal appeals process at a four-day hearing in which the regulators and Intel will be heard by five judges overseeing proceedings at Europe's second highest court, the General Court in Luxemburg.

"The quality of evidence relied on by the Commission is profoundly inadequate. The analysis is hopelessly and irretrievably defective. The Commission's case turns on what customers' subjective understanding is," Intel's lawyer, Nicholas Green said when addressing the court. He argued that the European Commission lacked strong enough evidence to justify the ruling.

In response, the Commission's lawyer Nicholas Khan explained "these kind of rebates can only be intended to tie customers and put competitors in an unfavorable position. Intel carefully camouflaged its anti-competitive practices."

It's possible a separate ruling will work in Intel's favor after a non-binding report published by the Ombudsman five months following the original ruling in 2009 highly criticized the Commission for failures in procedure, and claimed "maladministration" had been found in the EC. The Ombudsman also found that the details of meetings with Dell had been omitted from the records.

The General Court will make a ruling in the next few months. Should the ruling be unfavorable for Intel they have the final option of taking the case to the highest EU court, the European Union's Court of Justice.

User Comments: 5

Got something to say? Post a comment
Per Hansson Per Hansson, TS Server Guru, said:

"He argued that the European Commission lacked strong enough evidence to justify the ruling."

How about the fact that Intel already paid AMD $1.25 billion for the equivalent case in the US.

Or was that just out of charity and goodwill?

TJGeezer said:

I wonder, if this sticks, whether the commission will then apply it to big software vendors like SAP, which has of late kicked several longtime "partners" out of its formal ecosystem and relabeled them as competitors. I saw an analyst report that noted this happening and it looked to me like what Microsoft used to do to its small Windows utility vendors, anticompetitive in the extreme. SAP is German and sells only to huge corporations, so I wonder if the same rules about fair play would be applied by an EU court to them. Just sayin'.

Guest said:

I don't see anything wrong with INTEL paying Dell and all the other manufacturers HUNDREDS OF MILLIONS in rebates on the condition that they don't use AMD products - or face Intel paying massive predatory subsidies to their competitors as punishment.

Most Americans don't even know how MONOPOLIES steal from them by blocking out competition and healthy pricing.

We should let Intel get away with it, so that Intel can continue to monoplize and get richer.

Mantrhax Mantrhax said:

Looks like European antitrust regulators are out of money and are trying to cash.

Ranger1st Ranger1st said:

if they are going to do business with a lack of morals and ethics then I'm happy to see Intel get stuffed.

Load all comments...

Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.