Intel Corporation Contests EU’s $1.2 Billion Antitrust Fine

Intel LogoBy The original uploader was VD64992 at English Wikipedia [Public domain], via Wikimedia Commons

Intel says that the fine handed down in 2009 by the European Union was wrong, unfair and unrealistic. The chip making giant attacked the European Commission for being unfair in the probe that led to a record $1.2 billion (€1.06 billion) fine, reports Bloomberg. The chip maker is making a final attempt to overturn the 2009 penalty for unfairly squeezing out Advanced Micro Devices (AMD). No date for a ruling has been set yet.

EU failed to consider “all relevant circumstances”: Intel

On Tuesday, Daniel Beard, a lawyer for Intel, told the European Union’s Court of Justice in Luxembourg that the key issue in the investigation was the loyalty rebates to lower retail prices. Beard said the European Commission, however, failed to analyze “all relevant circumstances” to see if the rebates shut out competitors.

On Tuesday, the commission’s lawyer, Nicholas Khan, told the court that the main concern in Intel’s case is whether a company with a very large market share can pursue a “commercial strategy, the focus of which is the marginalization or even the elimination of its only competitor.” Khan said the evidence shows that the rebates prevented computer makers from seeking out lower prices that might have been available.

Intel’s first appeal was rejected by the EU General Court two years ago. To the Brussels-based European Commission, which is embroiled in lengthy probes of chip designer Qualcomm and search giant Google, the ruling was a timely boost. The search engine giant gave financial incentives to phone makers and telecommunications operators to install its search app, say regulators. Also regulators allege that Qualcomm paid a tablet and smartphone manufacturer to use its chips, the report says.

Unfair practices

From 2002 until 2005, Intel had allegedly obstructed competition by giving rebates to computer makers on the condition that they buy at least 95% of their PC chips from it, said the EU’s antitrust regulator in its decision. For the remaining 5%, supplied by AMD, the chip maker imposed “restrictive conditions.”

In 2009, the commission said computer makers that were persuaded not to use AMD’s chips included NEC, Dell, Acer, Lenovo, and Hewlett-Packard. In addition, the European Union told the court that the chip making giant made payments to electronics retailer Media Markt on the condition that it would sell only Intel-based PCs.

Intel was ordered by the EU to stop using illegal rebates to thwart competitors, but the chip maker complained that this instruction was not clear, says Bloomberg.

For exclusive info on hedge funds and the latest news from value investing world at only a few dollars a month check out ValueWalk Premium right here.

Multiple people interested? Check out our new corporate plan right here (We are currently offering a major discount)



About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com

Be the first to comment on "Intel Corporation Contests EU’s $1.2 Billion Antitrust Fine"

Leave a comment

Your email address will not be published.