Intel loses fight against €1bn EU antitrust fine

Intel has lost its challenge to Europe's 1.06 billion fine for locking rival AMD out of the market.
Written by Liam Tung, Contributing Writer
Chipmaker Intel has lost its appeal against a fine for violating European competition law. Image: Intel

US chip giant Intel has lost its bid to fight off a €1.06bn fine levied by Europe's competition regulator in 2009 after the company was found to be muscling out rival AMD.

Intel launched its appeal in 2012 at the Luxembourg-based European General Court hoping to overturn the record-breaking fine for violating European competition law.

In its 2009 decision, Europe's competition commission fined Intel, which had a market share of around 70 percent at the time, for impeding AMD's ability to compete between October 2002 and October 2007.

Intel had offered rebates to Dell, Lenovo, HP, and NEC in exchange for a commitment by them to buy almost all of their x86 CPUs from Intel. Among several programmes the commission believed reduced consumer choice, Intel had also awarding payments to HP, Acer, and Lenovo on the condition they cancel or delay AMD CPU-based products or by restricting their distribution.

Intel and AMD reached a $1.25bn settlement in 2009 over the dispute, agreeing to call off legal action against each other — including over antitrust and patent cross-licensing.

Intel's fine remains the largest ever for breaching Europe's competition laws. Microsoft was fined €561m last year ($731m) by European authorities for failing to meet obligations in a settlement that forced it to offer a choice of web browsers on Windows.

On Thursday, the European Union's General Court dismissed Intel's appeal in its entirety, which aimed at overturning the commission's decision or have the fine substantially reduced.

The court found that Intel's rebates to Dell, HP, NEC, and Lenovo were "exclusivity rebates" that, given its market dominance, were capable of restricting competition and foreclosing competitors from the market.

"The General Court finds that the commission showed to the requisite legal standard the existence of the exclusivity rebates and the naked restrictions at issue in its decision. It rejects Intel's arguments seeking to call into question the findings made in that regard by the commission," the court said today.

"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."

It also rejected all of Intel's arguments that the fine impose was disproportionate, noting the penalty at the "lower end of the scale" and equivalent to 4.15 percent of Intel's annual 2008 turnover — and well below the 10 percent ceiling fines can reach.

ZDNet has contacted Intel for comment and will update the story if one is forthcoming. 

As the court notes, Intel has two months to appeal the decision at the Europe's highest court, the European Court of Justice, on points of law.

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