EU Court Chucks $1.2B Antitrust Fine Against Intel

(CN) – A reversal Wednesday from Europe’s highest court upended a $1.2 billion fine against Intel for cornering the market on a certain central processing unit.

The European Commission imposed the fine in 2009, finding that the U.S.- based microchip manufacturer abused its dominant position for the x86 CPU.

Intel’s anticompetitive conduct occurred between October 2002 and December 2007, the commission found.

The commission said Intel foreclosed one of its competitors, Advanced Micro Devices Inc., from the market by granting rebates to four major computer manufacturers on the condition that they purchased all, or almost all, of their x86 CPUs from Intel.

The four computer customers were Dell, Lenovo, HP and NEC, but Intel also was also found to have manipulated Media-Saturn-Holding, a European retailer of microelectronic devices.

Intel apparently made payments to Media-Saturn on the condition that it sell only computers containing Intel’s x86 CPUs.

Because Intel held at least 70 percent of the market share, the commission found that it qualified as having a dominant market position.

Its efforts to exclude competitors from the market led to a reduction of consumer choice and in lower incentives to innovate, regulators found.

Though Intel challenged the commission’s fine, the European General Court dismissed Intel’s appeal in 2014.

The chipmaker fared better before the European Court of Justice, which ruled out of Luxembourg on Wednesday that the General Court neglected to examine all of Intel’s arguments concerning what is known as the efficient competitor test.

In conducting the AEC test, as it is abbreviated in the ruling, the commission determined that Intel’s customer rebates meant that a competitor could not offer viable prices if it wanted to be as efficient as Intel.

On remand, the General Court must consider Intel’s argument about whether the rebates were capable of restricting competition.

The Court of Justice sidelined two other arguments by Intel, namely that the commission lacked territorial jurisdiction to penalize it, and that procedural irregularities affected its rights of defense.

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