Intel Corp. fined €1.06 billion for abuse of dominant position and ordered to cease anticompetitive practices in Europe

On 13 May 2009, the European Commission imposed the highest fine ever for an abuse of dominant position on US chips manufacturer Intel Corporation. The European antitrust watchdog’s decision stems from several complaints by AMD, Intel’s main competitor, back in 2000, 2003 and 2006 relating to Intel practices in the worldwide market for computer chips (x86 central processing units or x86 CPUs). The decision is not public yet (see press releasememospeech).

According to the Commission, Intel’s illegal practices consisted in, first, granting rebates to computer manufacturers on condition that they acquired all, or almost all, their x86 CPUs needs from Intel and, second, in direct payments to computer manufacturers to delay or halt the launch of products containing competitors x86 CPUs  and to limit the distribution channels for those products.

Dominant companies are not prevented to provide customers with discounts, but the Commission found that the conditions attached to Intel’s rebates and payments are abusive insofar as the discounts could only be obtained by buying less of a rival’s products, or not buying them at all, unless the dominant company could put forward specific reasons to justify their application in the specific circumstances, which appears not to be the case here.

The decision is based on the traditional EC case-law, whereas the recent Guidance Paper on Article 82 did not apply because the proceedings started before it was issued. The Commission clarified though that its approach is in line with the orientations set out in the guidance paper, and includes a rigorous effects-based analysis which demonstrated that Intel’s conduct reduced consumer choice and limited innovation in the market. [Gabriele Accardo]

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