Intel Gets Support to Overturn $1.16 Billion EU Antitrust Fine

Intel Gets Support to Overturn $1.16 Billion EU Antitrust FineIntel Corp.’s fight to overturn a record 1.06 billion-euro ($1.16 billion) European Union antitrust fine received a boost from an adviser to the bloc’s top court in a case that could have ramifications for a growing list of disputes involving US tech giants from Google to Apple Inc.

Intel’s appeal should be totally reviewed by a lower court, which was wrong to rule against the company’s system of rebates, Advocate General Nils Wahl of the EU Court of Justice said in a non-binding opinion Thursday. The top court will decide whether to back his views in a ruling expected within about six months.

The lower tribunal was wrong to single out “exclusivity rebates” paid to customers who bought most or all of their chips from Intel, he said. The General Court’s analysis failed to show that the rebates harmed competition. The European Commission in Brussels declined to comment.

Rare Setback
A victory for Intel would be rare setback for EU antitrust regulators facing a court clash with Ireland and Apple over the fairness of a probe that culminated in the iPhone maker’s 13 billion-euro tax bill. The Intel ruling may also have affect the EU’s handling of probes into Google and Qualcomm Inc. that could ultimately lead to fines.

Intel’s 2009 antitrust fine was the EU’s biggest, more than double the 497 million-euro penalty against Microsoft Corp. in 2004. It represented about 4 percent of Intel’s $37.6 billion in sales in 2008, below the maximum penalty of 10 percent of yearly sales regulators can impose.

While urging a review of the case, Wahl didn’t criticize the size of the fine, saying Intel failed to prove the amount was disproportionate.

The EU’s eight-year investigation found that Intel impeded competition by giving rebates to computer makers from 2002 until 2005 on the condition that they buy at least 95 percent of chips for PCs from Intel.

The EU regulator said Intel imposed “restrictive conditions” for the remaining 5 percent, supplied by Advanced Micro Devices Inc., which struggled to overcome Intel’s hold on the market for processors that run PCs.
Dell Meeting
Acer Inc., Dell Inc., Hewlett-Packard, Lenovo Group Ltd. and NEC Corp., were among computer firms coaxed to use Intel chips, the commission said in 2009. The ordered Intel to stop using illegal rebates to thwart competitors, an instruction that Intel complained was unclear.

Qualcomm will be watching the Intel case as it battles EU allegations that it paid an unidentified phone manufacturer to use its chipset. It will defend itself next month at a closed-door hearing examining a second set of charges that it sold chips below-cost to harm a smaller rival.

Wahl was critical of the EU’s handling of evidence it gathered against Intel, saying the lower court was wrong to say regulators could add details of a meeting with a Dell executive long after the fact.

Any ruling on this point may echo challenges that Ireland and Apple are preparing against the process leading up to the EU’s tax decision in August. The appeals may argue that EU regulators unfairly kept them in the dark during the probe and neglected to flag a shift in emphasis in the investigation, people with knowledge of their case have said.

Sunnyvale, California-based AMD, which initiated the EU antitrust case, is no longer involved in the case and didn’t intervene in the EU court hearings.

Sourav

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