Intel begins battle against EU antitrust fine in court

Was the evidence used against Intel "profoundly inadequate"? The chip maker believes so.
Written by Charlie Osborne, Contributing Writer

Intel has begun an appeal against its record antitrust fine, calling the evidence against it "profoundly inadequate."

The fine was levied by EU antitrust regulators in 2009, after Intel was found to have engaged in anti-competitive behaviour in order to hinder rival Advanced Micro Devices (AMD) through the use of rebates and contract conditions.

After an eight-year investigation, Intel was fined a record €1.06 billion in 2009 -- more than 4.1 percent of its 2008 turnover. The fine, the biggest levied by the EU against a company, currently stands at $1.34bn due to economic fluctuations.

Immediately after the fine was imposed, Intel CEO Paul Otellini said:

"We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace. There has been absolutely zero harm to consumers. Intel will appeal."

Intel this week began its formal appeal process.  As part of the four-day hearing, a panel of five judges at the General Court in Luxembourg -- Europe's second highest court behind the European Union's Court of Justice -- will hear from both the EU and Intel.

Intel's lawyer, Nicholas Green, told the court that the European Commission did not have evidence strong enough to justify the ruling.  Reuters reports he told the court:

"The quality of evidence relied on by the Commission is profoundly inadequate. The analysis is hopelessly and irretrievably defective. The Commission's case turns on what customers' subjective understanding is."

According to the Commission, Dell Inc., Hewlett-Packard Co, NEC, Lenovo and Media Saturn Holding all received rebates from Intel during the period that was investigated.

Commission lawyer Nicholas Khan reportedly told the panel of judges:

"These kind of rebates can only be intended to tie customers and put competitors in an unfavourable position. Intel carefully camouflaged its anti-competitive practices."

However, there may be a silver lining for Intel: the European Ombudsman criticized the Commission for failures in procedure.

In a non-binding report issued five months after the ruling, the Ombudsman said that "maladministration" had been found in the EC, as the regulator had omitted meeting details with Dell from the record.

The General Court is expected to rule in the next few months. Should it not find in Intel's favour, the company then has the option to take the case to the highest court available -- the European Union’s Court of Justice.

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