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

By Lee Kaelin on

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.

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