Intel's Billion-Euro Fight Puts EU's Winning Streak in Jeopardy
Intel’s eight-year clash with the European Union over chip pricing has dragged on so long that the 1.06 billion-euro antitrust fine, a record at the time, now seems like a distant memory, according to Bloomberg.
But Wednesday’s ruling in the case at the EU Court of Justice could be a blast from the past if it ends the European Commission’s decades-long winning streak in cases about monopolies. Victory for Intel would encourage others. Rather than agree to settle cases with the EU’s antitrust enforcers, they would be more likely to head to court to appeal any fines.
The commission hasn’t lost a big antitrust case in court in more than 20 years. Knowing that and facing likely defeat, most companies being probed for monopoly abuse tend to cave in. They agree to a binding deal to change their behavior, shutting down the EU investigation early to avoid fines or get a reduced penalty.
Qualcomm could be the most directly affected by the ruling. The EU is probing whether the company unfairly paid Apple to only use Qualcomm chipsets in its products. Google, under investigation for inducing phone makers to use its Android software, will also be watching closely.
Intel continued its battle against the commission’s 2009 penalty for using discounts to push out AMD, and a decision by the EU’s second highest court to back the regulator. Giving hope to the chipmaker, Nils Wahl, an adviser at the bloc’s top tribunal, in October said the earlier ruling mistakenly dismissed the need for regulators to prove that Intel’s payments to manufacturers, or rebates, for buying its chips were illegal.
Intel is one of the longest-running cases in the commission’s history and one of the few to reach the EU’s top court. It’s been closely watched because it deals with one of the most common and commercially relevant issues, rebates and deals with one of the current hot-topics in competition law about the level of proof needed with infringements.
The EU’s 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. It said Intel imposed “restrictive conditions” for the remaining 5 percent, supplied by AMD, which struggled to overcome Intel’s hold on the market for processors that run PCs.