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Intel has surprise “win” against the EU

by on07 September 2017

Lower courts have to review huge fine

The highest court in the European Union has ruled that Intel’s $1.3 billion antitrust fine should be reviewed in a move which could end a sweeping crackdown on US tech companies antics in Europe.

The move to fine Intel was supposed to stop companies like Intel, Apple, Amazon, Google and Facebook playing fast and footloose with EU anti-trust laws.

The move by the Court of Justice of the European Union raises the prospect that the 1.06 billion euro fine on Intel in 2009, equivalent to $1.26 billion at current exchange rates, could be reduced or scrapped entirely. The penalty — at the time the largest of its kind — was upheld by a lower court in 2014 and is likely to be the subject of legal battles for years.

The case being considered on Wednesday centred on claims that Intel had abused its dominant position in the microchip market. The European Commission, the European Union’s executive arm, found in 2009 that the company had offered rebates and incentives to computer makers to favour its products over those of rival  AMD.

The commission said that such rebates, offered to manufacturers like Dell, Lenovo, HP and NEC, were anticompetitive. That argument raised questions about whether some common practices in the digital world, such as the bundling of products or services, could violate antitrust rules.

However, the Court of Justice said that a lower court would have to “examine, in the light of the arguments put forward by Intel, whether the rebates at issue are capable of restricting competition”.

Unfortunately for Chipzilla, it did not strike down the original ruling, so the courts still think it is guilty. They just think that the courts need to factor in how much damage it thinks these sorts of deals do to competitive environments. Experts think the decision to send the case back to a lower court was a good sign for businesses looking to offer rebates to customers in exchange for exclusivity deals.

Steven R. Rodgers, Intel’s general counsel, said: “While this case concerns events that happened more than a decade ago, we have always believed that our actions were lawful and did not harm competition. We look forward to the next step in this process.”

The United States, say Europe’s antitrust officials, have too much power to levy fines and to force companies from doing what they like, no matter who it hurts – something which has made US companies great at the expensive of smaller local rivals.

The European Commission gave a cautious response when asked what the latest ruling would mean for other technology companies under investigation in Europe, and whether it would give those firms confidence to pursue legal challenges rather than to reach financial settlements.

A commission spokesman said the EU was looking closer at the judgment.


Last modified on 07 September 2017
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