Intel's appeal over €1.06 billion EU court fine is rejected

by Mark Tyson on 13 June 2014, 13:45

Tags: AMD (NYSE:AMD), Intel (NASDAQ:INTC)

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Microchip giant Intel has lost its challenge against a large antitrust fine. The European Union's second-highest court has upheld the record €1.06 billion ($1.43 billion) fine against the chip maker, for abuse of market dominance and breaching competition rules.

The EU's General Court based in Luxembourg rejected Intel's attempt to appeal, that the penalty was disproportionate, "in its entirety." It is judged that Intel breached competition rules when it tried to impede rival AMD back in 2009, by giving rebates to PC makers Dell, HP, NEC and Lenovo for buying most of their computer chips from Intel.

"The Commission demonstrated to the requisite legal standard that Intel attempted to conceal the anti-competitive nature of its practices and implemented a long term comprehensive strategy to foreclose AMD from the strategically most important sales channels," the General Court said, reports Reuters.

The Commission also discovered that Intel had paid three OEMs to delay, cancel or restrict the launch of computers containing CPUs made by AMD, whilst being involved in attempts to try to mask its infringing activities. Furthermore the EU competition authority accused Intel of paying a German retail chain, Media Saturn Holdings, to stock only computers with its chips.

"None of the arguments raised by Intel supports the conclusion that the fine imposed is disproportionate. On the contrary, it must be considered that that fine is appropriate in the light of the facts of the case, " the court said, whilst adding that the size of the EU penalty "is at the lower end of the scale" for possible fines. "The fine is equivalent to 4.15% of Intel's annual turnover, which is well below the 10% ceiling provided for."

During Intel's appeal, it argued that the regulator had ignored evidence that AMD wasn't harmed and that the decision was based on mistakes. Also false conclusions, reliant on market speculation in emails, were drawn. Intel argues that its payment of rebates to some OEMs constituted actions of "normal competition" and did not infringe competition rules, according to Out-law.com.

However, its arguments were knocked back by the court as it said that "restricting customers’ freedom to source from the dominant undertaking’s competitors falls outside the scope of competition on the merits," whilst adding that the rebates offered could be classed as 'exclusivity rebates' and are almost always anti-competitive when paid by a company with market dominance.

Intel can take its case further, to the Court of Justice of the European Union, but only on points of law. Intel declined to comment on whether it would do so, after expressing that it is "very disappointed about the decision." Another option Intel could take is to attempt to reduce the fine with an out-of court settlement with the Commission.

"It's a complex case which is reflected in the decision. We will begin evaluating the decision," said Intel spokeswoman Sophie Jacobs.



HEXUS Forums :: 21 Comments

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Intel still trying to get out of this? I would hope that there is scope for adding on additional interest for delaying the payment of the fine for several years. I don't think there is anybody left that doesn't think Intel engaged in anti competitive behaviour when it had the inferior product.

I think the results of this are still being felt now in that the lost financial revenue for AMD past and present has meant that they have not been able to maintain strong competition to Intel in most areas and they still struggle to get big OEM's to push their products.
In fairness the EU should now hand over that money to AMD, you know, rather than just distributing among all the greedy politicians !

And Intel arguing that no long term harm was done, from my perspective is an utter lie. AMD's R&D department must be miniscule now because of the lasting damage Intel did.
Intel actually paid the fine years ago - they've just been trying to get it back, and have not been delaying any part of the process, other than some regulator or another padding his pocket. If this commission had any credibility, they would turn the fine over to AMD - although that might look bad, considering AMD already successfully sued Intel for the same thing, and was already paid.

AMD's problems at that time weren't anti-competitiveness. It had a LOT more to do with them buying a struggling GPU company, and a couple of dead end processors of their own. Yes, they had the edge on Intel on parts of the consumer market, but they squandered that advantage, and still haven't made it up. And please don't try to say that some exclusivity deals in Germany destroyed their business.
Pretty shoddy behaviour by Intel, and personally, the “defence” stated in the article is at best paper thin.

Given that - as pointed out elsewhere yesterday - Dell are pretty much an Intel-only shop these days, I've got to wonder if some “incentives” are still being offered.

Of course, AMD could help matters by giving us a proper replacement to the FX series. I'll be looking to - finances permitting - replace my ancient PhenomII at the end of the year and it looks like Intel is the only game in town. I've only still got it because of the help given by Cat-The-Fifth earlier in the year!
GuidoLS
AMD's problems at that time weren't anti-competitiveness. It had a LOT more to do with them buying a struggling GPU company, and a couple of dead end processors of their own. Yes, they had the edge on Intel on parts of the consumer market, but they squandered that advantage, and still haven't made it up. And please don't try to say that some exclusivity deals in Germany destroyed their business.
While I agree to an extent with that second sentence, I don't agree at all with that last line. Did you read the part in the article that said:
It is judged that Intel breached competition rules when it tried to impede rival AMD back in 2009, by giving rebates to PC makers Dell, HP, NEC and Lenovo for buying most of their computer chips from Intel.
As I understood it, these deals were not limited to Germany, but covered the EU (might even have been global deals). I suppose if you take a very strict view then perhaps the PC makers could be accused of accepting bribes - but that's pushing the point to ridiculous extremes.