Landmark Intel judgment critical for other EU antitrust cases

08 September, 2017, 00:44 | Author: Garry Little
  • Intel was fined in 2009 for abusing its monopoly position
Credit
AFP

However, in an eagerly awaited ruling on Wednesday (6 September), the European Court of Justice sent the case back to the lower General Court so it can examine more arguments from Intel.

Intel then appealed to the General Court, second only to the European Court of Justice, but lost the case in 2014.

The Commission had imposed the fine in May 2009 claiming that the USA manufacturing giant which employs thousands of people in Leixlip, had abused its dominant position in the microchip market. The court in Wednesday's decision, however, didn't rule on three other parts of Intel's appeal, including the amount of the fine and the EU's characterization of some of the rebates.

The EU court has brought the European Commission one step closer to its first bloody nose on anti-trust fines.

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The ECJ ruled that the lower court had failed to fully examine all of Intel's arguments over the methods by which the Commission had concluded that Intel's rivals were indeed being frozen out of the market.

Not only has this move made the final status of the now $1.5 billion-plus (exchange rates and inflation) fine uncertain, it also emboldens other companies now sparring with the European Union in trade court, chief among them Google, who was recently fined around $2.5 billion dollars for antitrust activity stemming from its dominance of the search industry.

"The Commission takes note of today's ruling by the European Court of Justice (Case C-413/14 P) and will study the judgment carefully", a spokesperson for the European Commission said in an emailed statement. The original judgement centred on the company's use of an exclusivity clause, which offered rebates to computer manufacturers that purchased at least 95 percent of their chips from Intel. "The case should be referred back to the General Court for a fresh review". The EU also said Intel made payments to electronics retailer Media Saturn Holding on the condition that it only sold computers containing Intel's microprocessors.

Regulators have generally frowned upon rebates, especially those offered by dominant companies, on the theory they are anti-competitive in nature. The latest ruling by the ECJ argues the EU General Court did not fully consider whether an efficient rival could still compete fairly against Intel's exclusivity rebates.

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