Intel says flawed EU antitrust decision underpins $1.2 billion fine

FILE PHOTO: U.S. chipmaker Intel Corp's logo is seen on their "smart building" in Petah Tikva, near Tel Aviv, Israel December 15, 2019. Picture taken December 15, 2019.

Intel on Tuesday said EU antitrust regulators got it wrong when they fined the chipmaker 1.06 billion euros ($1.2 billion) more than a decade ago for thwarting a British rival in a case that could affect Google and Qualcomm.

The U.S. company set out its arguments at the General Court in a re-hearing of a case seen as testing the European Commission’s power to go after U.S. tech giants which offer incentives such as rebates to lure customers from competitors.

EU antitrust enforcers in 2009 said Intel tried to block Advanced Micro Devices by giving rebates to computer makers Dell, Hewlett-Packard Co, NEC and Lenovo for buying most of their chips from Intel.

The General Court is hearing the case for the second time after the EU Court of Justice (CJEU), Europe’s highest, in 2017 disagreed with its 2014 ruling backing the Commission’s decision, in a major setback to the EU competition watchdog.

It told the lower tribunal to re-examine the case and whether exclusivity rebates actually harmed competition.

The Commission’s decision was fundamentally flawed, Intel’s lawyer Daniel Beard told the panel of five judges.

“The Commission either took a wrong approach in its decision or it carried out an as efficient competitor (AEC) test and it got it wrong,” he said.

An AEC test is an economic analysis that determines if a dominant company knocks out competitors that are as efficient or more efficient through anti-competitive practices while pushing out a less efficient rival may not be problematic for regulators.

The Association for Competitive Technology is supporting Intel while French consumer body UFC is backing the Commission. A judgment is likely to come next year while the losing party can appeal to the CJEU.

Qualcomm has challenged a 997-million-euro EU fine for paying iPhone maker Apple to use only its chips, blocking out rivals such as Intel.

Alphabet unit Google has also challenged a record 4.34-billion euro EU antitrust fine levied for using its Android mobile operating system to squeeze out rivals.

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

Was it worth reading? Let us know.