Intel Wins Historic Court Fight Over EU Antitrust Fine

(Bloomberg) --

Intel Corp. won a historic victory in its court fight over a record 1.06 billion-euro ($1.2 billion) competition fine, in a landmark ruling that upends one of the European Union’s most important antitrust cases.

The EU General Court ruled on Wednesday that regulators made key errors in a landmark 2009 decision over allegedly illegal rebates that the U.S. chip giant gave to PC makers to squeeze out rival Advanced Micro Devices Inc.

While the surprise ruling can be appealed one more time, it’s a stinging defeat for the European Commission, which hasn’t lost a big antitrust case in court for more than 20 years. 

The Luxembourg-based EU court said the commission provided an “incomplete” analysis when it fined Intel, criticizing it for failing to provide sufficient evidence to back up its findings of anti-competitive risks. 

Margrethe Vestager, the EU’s antitrust commissioner, said her team would “study in detail what it can learn” from the judgment on the case, which was pushed through by her predecessor Joaquin Almunia.

Intel “always believed that our actions regarding rebates were lawful and did not harm competition,” it said in an email. “The semiconductor industry has never been more competitive than it is today and we look forward to continuing to invest and grow in Europe.” 

The judgment follows a 2017 ruling from the bloc’s top court, which criticized the General Court -- the EU’s second-highest tribunal -- for not properly checking all factual and economic evidence when it previously weighed Intel’s appeal. 

The EU commission in 2009 hit Intel with what was then the bloc’s biggest antitrust fine. It represented about 4% of Intel’s $37.6 billion in sales in 2008. Since then, Santa Clara, California-based Intel has been locked in a non-stop legal dispute with the EU’s antitrust arm. 

Wednesday’s victory may now offer encouragement for other companies to go to court. Many companies under investigation for monopoly abuse have opted not to fight hard since the chances of overturning the EU at court were viewed as low.

But European consumer group BEUC said the duration of the court fight reveals a major flaw in the EU justice system.

‘Twenty Years’

“The ruling is disappointing, as we believe Intel engaged in anti-competitive behaviour which limited consumer choice,” said Agustin Reyna, BEUC’s director for legal and economic affairs.

“But it is even more striking that it has taken over twenty years for a decision on this antitrust case,” Reyna said. “What we need is an urgent, speeding up of antitrust procedures. It cannot take so long for the conclusion of a case in which there are such serious competition concerns raised.”

Following its investigation, the commission said it found evidence that Intel hindered competition by giving rebates to computer makers from 2002 until 2005 -- if they bought at least 95% of PC chips from Intel. It said Intel imposed “restrictive conditions” for the remaining 5%, supplied by AMD, which struggled to overcome Intel’s hold on the market for processors that run the devices.

The court on Wednesday said the commission had failed to show “to the requisite legal standard” that the contested rebates posed an anti-competitive risk. 

“There is finally a degree of common sense creeping in,” said Oliver Bretz, a lawyer at Euclid Law in London. In the Intel case that means “to require that rebates have to be capable or likely to have anti-competitive effects, based on the evidence.”

The case is: T-286/09 RENV - Intel Corporation v. Commission.

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