Intel's US$1.4b antitrust verdict should be reviewed, top EU judge says

An EU court erred in rejecting Intel's appeal of a record antitrust fine, a top EU judge advised Thursday

Intel's hope of recovering a record antitrust fine have improved with a recommendation from a top European Union judge on Thursday that the case be reviewed.

The company paid the €1.06 billion (then US$1.4 billion) fine in 2009 after the European Commission found it guilty of abusing its dominant position in the market for x86 processors. Since then, it has been seeking to have the judgment overturned, first by the EU's General Court and then, since 2014, by the EU's highest legal authority, the Court of Justice.

The CJEU heard that appeal in June, and now Advocate General Nils Wahl has issued his recommendation to the court. The opinions of the court's advocates general are not binding, but it often follows them.

Wahl recommended Thursday that the case be referred back to the General Court for review. He disagreed with the lower court's findings on a number of points of law raised by Intel.

Those points concerned the Commission's treatment of rebates Intel paid to four computer manufacturers, Dell, Lenovo, Hewlett-Packard and NEC on condition that they purchased almost all of their x86 CPUs from it, and payments it made to electronics retailer Media-Saturn on condition it sold only computers containing Intel’s x86 CPUs. The rebates and payments, the Commission said, made it harder for Intel’s competitors to compete on the merits of their x86 CPUs, reducing consumer choice and lowering the incentive to innovate.

In his analysis of the General Court's handling of Intel's appeal, Wahl found the court's treatment of the rebates and payments as "exclusivity rebates" led it to overlook the capability of such rebates to restrict competition. Further, he wrote, in the case of HP and Lenovo, there was no question of exclusivity because they were still allowed by their agreements with Intel to purchase significant quantities of x86 processors from AMD.

Wahl also doubted whether Intel's market position was dominant enough to be abused. By averaging Intel's market share between 2002 and 2007, he wrote, the court failed to take into account that the company's share was shrinking and by 2007 was no longer sufficient for it to restrict competition.

The Commission's failure to record an interview with a Dell executive in accordance with EU law was another point on which Wahl found fault with the lower court's ruling.

He even went so far as to question whether the Commission had jurisdiction over some of Intel's alleged market abuse. The lower court failed to assess whether certain agreements between Intel and Lenovo had immediate and foreseeable anticompetitive effects within the European Economic Area, of which the EU is part, he wrote.

Intel failed to win Wahl's support on one point, however: the size of the fine. Although it was a record for the EU at the time, that alone doesn't make it disproportionate, and Intel did not point to any legal errors on the part of the General Court in its assessment of the fine.

"I agree with the Commission that the arguments put forward by the appellant in relation to the proportionality of the fine must be declared inadmissible," he wrote.

The company will now have to wait until next year for the Court of Justice to determine whether to refer the matter back to the lower court.

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