EU court upholds Intel’s record-breaking €1.06 billion fine (Wired UK)


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Ars Technica In a ruling issued Thursday, the European Union’s General Court
rejected Intel’s appeal of a €1.06 billion (£850 million) penalty
for antitrust violations. Instead, the EU General Court upheld
the record-breaking penalty against the US computer chip
giant, which had been  issued in 2009 by the EU Commission.

Intel had been seeking annulment of the large penalty for
what the EU Commission previously ruled to have been the
company’s antitrust infringement actions.

But the General Court determined that Intel, the predominant
player in the computer microchip market — holding a market share
of roughly 70 percent or more — had acted anticompetitively in
attempting to squeeze out AMD, its main rival, between 2002
and 2007.

Specifically, the Court explained that Intel paid bribes to a
large German retail chain called Media-Saturn, so that it only
stocked computers with Intel chips, rather than those using AMD’s
microprocessors. This, the Court argued, constituted clear
antitrust abuse. “The General Court finds that those payments were
capable of making access to the mark more difficult for AMD,” and
that Intel strategically chose this approach to achieve such an
effect.

The Court explained that the exclusivity rebates Intel “granted
to Dell, HP, NEC and Lenovo… are, when applied by an undertaking in
a dominant position, incompatible with the objective of undistorted
competition within the common market.” The Court found such
exclusivity rebates, in light of Intel’s market dominance, “by
their very nature, capable of restricting competition and
foreclosing competitors from the market.”

While Intel appealed the EU decision on the grounds that the
fine was disproportionate, the General Court found that the penalty
was reasonable in light of the facts at hand. The General Court
explained that the EU Commission penalty, which amounted to
approximately 4.15 percent of the company’s annual turnover in
2008, could have legally been as large as 10 percent.

“The judgment is significant because it confirms that the
Commission was fully justified in pursuing the anticompetitive
conduct in question in a major worldwide market,” the EU Commission
responded in a statement
issued Thursday.

“We are disappointed in this outcome,” Intel Spokesman Chuck
Mulloy told Ars on Thursday. “We have said all along that we
believe the EC erred in many areas. After we’ve studied the
decision, we will evaluate our options and decide what to do
next.”

Mulloy also noted that the company retains the option to
appeal the decision to the EU’s highest court, the European Court
of Justice, within seventy days of the present ruling. He
further explained that the computer chip giant paid the fine
in full back in 2009, claiming that, as a result, “there is no
material financial impact on our business due to today’s
ruling.”

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This article originally appeared on Ars Technica

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13 June 2014 | 11:48 am – Source: wired.co.uk
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