Intel loses court challenge against $1.4 billion EU fine

[June 12, 2014]  By Foo Yun Chee
 
 LUXEMBOURG (Reuters) - U.S. chipmaker Intel lost on Thursday its challenge against a record 1.06 billion euro ($1.44 billion) European Union fine handed down five years ago, as Europe's second highest court said regulators did not act too harshly.

The European Commission in its 2009 decision said Intel tried to thwart rival Advanced Micro Devices (AMD) by giving rebates to PC makers Dell, Hewlett-Packard Co, NEC and Lenovo for buying most of their computer chips from Intel.

The EU competition authority said Intel also paid German retail chain Media Saturn Holding to stock only computers with its chips.

Judges at the Luxembourg-based General Court said on Thursday they backed the Commission's decision.

"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," the court said in a near 300-page decision.

Judges said the EU watchdog had not been heavy-handed with the level of the fine, equal to 4.15 percent of Intel's 2008 turnover, versus a possible maximum of 10 percent. While Commission penalties rarely hit the top figure, the rising level of fines is a source of worry for many companies.
 

"The General Court considers that none of the arguments raised by Intel supports the conclusion that the fine imposed is disproportionate. On the contrary, it must be considered that that fine is appropriate in the light of the facts of the case," judges said.

Intel, which can take its case further to the Court of Justice of the European Union but only on points of law, declined to say whether it would do so.

"We are very disappointed about the decision. It's a complex case which is reflected in the decision. We will begin evaluating the decision," Intel spokeswoman Sophie Jacobs said.

BETTER OUT OF COURT?

The Commission welcomed the ruling, as did consumers' lobbying group BEUC.

"When large companies abuse their dominance of the market, it causes direct harm to consumers. The court's ruling issued a strong reminder that such behaviour is illegal and unacceptable," said BEUC director-general Monique Goyens.

The court's judgement suggests companies would be better off settling antitrust charges instead of fighting them, said Martina Maier, a partner at law firm McDermott Will & Emery.

"Companies under investigation by the Commission should not count on winning in court with the argument that the Commission would not have properly assessed the economic effects of an abuse of dominance," she said.

"This might well lead to a supplementary incentive for a company under investigation for an alleged abuse of dominance to settle with the Commission or to offer commitments in order to motivate the Commission to end its investigation."

Samsung recently settled EU charges while Google has also clinched a deal with the Commission.

The case is T-286/09, Intel vs Commission.

(Editing by Mark Potter)

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