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Intel Wins Court Appeal Of $1.2B EU Antitrust Fine

The European Union’s second highest court annulled the European Commission’s $1.2 billion fine against Intel on Wednesday, saying that the antitrust authority failed to prove that an OEM rebate scheme by Intel was anti-competitive. However, one Intel partner says he doesn’t think the chipmaker will revisit the program because rival AMD has much greater influence in the market today.

Intel has won its appeal of a fine worth $1.2 billion that was levied by the European Union’s antitrust regulators more than 10 years ago for anti-competitive behavior against rival AMD.

The General Court, the E.U.’s second highest court, annulled the European Commission’s fine against Santa Clara, Calif.-based Intel on Wednesday, saying that the antitrust authority failed to prove that an OEM rebate scheme by Intel was anti-competitive.

[Related: Nvidia May Bail On $40B Arm Deal As SoftBank Ponders Arm IPO: Report]

“The Commission’s analysis is incomplete and does not make it possible to establish to the requisite legal standard that the rebates at issue were capable of having, or likely to have, anticompetitive effects,” the General Court said in a press release.

The General Court’s decision can be appealed within two months and 10 days.

In a statement, Intel general counsel Steve Rodgers commended the court’s decision.

“We welcome today’s ruling by the General Court as we have always believed that our actions regarding rebates were lawful and did not harm competition,” he said. “The semiconductor industry has never been more competitive than it is today and we look forward to continuing to invest and grow in Europe.”

The European Commission fined Intel 1.06 billion euros in 2009 for giving what the regulatory body said were illegal rebates to OEMs Acer, Dell, Hewlett-Packard, Lenovo and NEC as well as German retail group Media Saturn Holdings on the condition that they buy most of their processors from Intel. That, the European Commission said, effectively blocked AMD from competing.

Intel challenged the case in 2020 after the Court of Justice, the E.U.’s highest court, threw out the General Court’s original 2014 ruling that sided with the European Commission. The chipmaker argued that the European Commission’s decision was based on an improper economic analysis of whether the rebates to OEMs were anti-competitive.

On Wednesday, the General Court said it agreed with Intel’s contention, calling the European Commission’s analysis “incomplete.” Among the issues it found, the General Court said the antitrust authority did not provide adequate evidence that Intel’s rebates to the OEMs would have had “foreclosure effects” on competitors.

Randy Copeland, president and CEO of Velocity Micro, Richmond, Va.-based system builder that sells gaming PCs and professional workstations, told CRN that he doesn’t think Intel’s victory against the E.U. fine will cause the chipmaker to revisit this particular OEM rebate program because AMD’s products are significantly more competitive than they were more than a decade ago.

“Intel was in a position of much stronger power from a product perspective. Today, AMD has competitive products,” he said.

This has increased AMD’s influence in the market over the past few years and, as a result, means that OEMs likely wouldn’t have the appetite for such a rebate program now, Copeland argued.

“Consumers want AMD, so this kind of a program wouldn’t really fly today because consumers want AMD a lot,” he said.

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