Intel’s EU Appeal Denied; Must Pay $1.44 Billion Fine

Intel’s EU Appeal Denied; Must Pay $1.44 Billion Fine
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The General Court of the European Union announced today it was upholding a fine of 1.06 billion euros imposed on Intel Corporation (NASDAQ:INTC) four and a half years ago by the EU’s antitrust authority.

The European Commission announced the $1.44 billion fine back in 2009, after claiming the chipmaker had abused its dominance in the processor market by offering large rebates to computer makers who used its chips to keep their business.

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The huge fine against Intel Corporation (NASDAQ:INTC) represents the highest single antitrust penalty that the European Comission ever levied on one firm.

Statement from the court against Intel

“Intel’s action against the Commission’s decision is dismissed in its entirety,” read a summary of the court’s ruling released Thursday.

The summary continued to say the court “considers that none of the arguments raised by Intel supports the conclusion that the fine imposed is disproportionate.”

The ruling also stated that exclusivity rebates “are, by their very nature, capable of restricting competition.”

Antoine Colombani, a spokesman for the commission, provided further color at a news conference following the announcement of the decision. “This is of course a significant judgment. It confirms that the commission was fully justified in pursuing the anticompetitive conduct in question in a major worldwide market.” The commission “will continue to vigorously pursue abuses of dominant positions,” he continued.

EU seeing results from decade of anti-trust enforcement

EU regulators began stepping up their pursuit of antitrust right after the turn of the century when U.S. regulatory authorities backed away from tough penalties in a landmark case against Microsoft Corporation (NASDAQ:MFST), and eventually decided to settle.

Intel Corporation (NASDAQ:INTC)’s punishment with a big fine is another reminder of how European regulators have become staunch enforcers of antitrust laws, and it can be seen as a sign that various types of regulators are gearing up to go after the biggest technology companies.

The recent court ruling fully endorses the commission’s approach. Regulators had claimed that the way Intel Corporation (NASDAQ:INTC) used so-called exclusivity rebates to keep manufacturers such as Dell Inc. (NASDAQ:DELL) and Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992) was clearly anticompetitive and no other proof was required, and the court agreed.

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