Intel antitrust fine to be re-examined

US technology giant Intel received a boost on Wednesday morning in their long-running battle with the EU over a 1.06-billion-euro ($1.26 -billion) antitrust fine, with Europe's top court setting aside the record penalty and referring the case back to a lower court.

The case, which has gone on for eight years now, deals with a 2009 European Commission decision that determined that Intel had abused its market dominance in the computer chip and CPU industry by paying so-called "fidelity rebates" — payments made with the intention of inducing manufacturers to exclusively buy their products — to PC makers such as Dell, Hewlett-Packard, NEC and Lenovo.

Competition rules violated?

On Wednesday, the European Court of Justice (ECJ) told the General Court — a lower EU chamber — to re-examine Intel's appeal against the antitrust fine and set aside its earlier judgement that had upheld the initial 2009 decision.

"The Court of Justice sets aside the judgment of the General Court, which had upheld the fine of 1.06 billion euros imposed on Intel by the European Commission for abuse of a dominant position," the Luxembourg-based ECJ said.

"The case is referred back to the General Court in order for it to examine the arguments put forward by Intel concerning the capacity of the rebates at issue to restrict competition," the ECJ said.

The ECJ's decision means the case is likely to drag on for quite a while longer, with there still being a possibility that Intel will strike a rare blow against EU antitrust enforcers, long used to winning and settling cases of this kind.

The decision to refer the case back to the lower court for re-examination is not entirely surprising given that in October 2016, Nils Wahl, an advisor at the ECJ, backed some of Intel's arguments, saying that the earlier ruling had been mistaken in dismissing the need for regulators to prove that Intel's payments to PC makers were illegal.

A litmus test for others

When the fine was initially imposed more than eight years ago, it was a record at the time (Google's €2.4 billion fine over manipulated search results eclipsed it earlier this year). The original EU investigation found that Intel's payments to PC makers had the intention of cementing the world’s largest computer chipmaker's dominant market position and edging out its rival, Advanced Micro Devices Inc.

The news that Intel's long-running battle against the fine has achieved some partial success will intrigue others facing similar EU antitrust cases, such as Google, which faces a possible antitrust judgement and fine over claims that it induced phone makers to use its Android software.

Experts, such as Brussels-based lawyer Georg Berrisch, have suggested that a positive result against the EU for Intel could encourage other firms to "switch to a fighter mode."

aos/hg (Reuters, AFP)