General Court upholds the EU Commission’s decision against Intel

By Nicole Daniel

On 12 June 2014 the General Court published its decision in the Intel case thereby upholding the Commission’s 2009 decision finding that Intel had abused its dominant position and imposed a fine of EUR 1.06 billion.

On 13 May 2009 the Commission adopted a decision under Article 7 of Regulation 1/2003 (Antitrust Regulation) prohibiting Intel’s anticompetitive conduct (for background see Newsletter No 5/2009, p. 5 and Newsletter No 3/2009, p. 4). According to the decision Intel had engaged in two types of abuse of its dominant position in the x86 CPU market (computer chips).

The first type of abuse was the grant of conditional rebates. Such rebates were granted to four PC and server manufacturers on the condition that they obtain all or almost all of their supplies from Intel. Furthermore payments to one downstream computer retailer were made conditional on the retailer’s undertaking that it only sold computers with Intel CPUs.

The second type of abuse was the use of naked restrictions. According to the Commission Intel granted direct payments to three computer manufacturers to halt, delay or limit launching specific products which incorporated chips from AMD, Intel’s only rival.

In its decision the Commission stated that Intel’s anticompetitive behaviour had undermined competition and innovation. It ordered Intel to end this anti-competitive behaviour and imposed a fine of EUR 1.06 billion. Intel appealed the Commission’s decision to the General Court.

The General Court upheld the Commission’s decision finding that it had correctly demonstrated the anti-competitive behaviour in question. It held that Intel’s attempts to conceal the anti-competitive nature of its practices and that the anti-competitive behaviour was an abuse of Intel’s dominant position. Furthermore the fine imposed by the Commission was deemed appropriate.

Regarding the rebates the General Court stated that by their very nature exclusivity rebates granted by a dominant undertaking are capable of restricting competition. Therefore – contrary to Intel’s claims – the Commission was not required to assess the circumstances of the case to show that the rebates had actually or potentially had the effect of foreclosing rivals from the market.

Similarly the General Court stated that the Commission was not required to assess whether in the light of the facts of this specific case the payments had restricted competition. The Commission was merely required evidence that Intel granted a financial incentive conditional upon an exclusivity condition.

The fine was appropriate and amounts for 4.15% of Intel’s annual turnover and is therefore well below the 10% ceiling.