Intel finds a friend in fight against $1.2B EU antitrust fine

Advocate general kicks holes in some of the European Commission's arguments about ancient rebate program

An advisor to Europe’s General Court has torn into the legal logic behind the EU's €1.06 billion ($1.2 billion) antitrust fine levelled against chip giant Intel.

Intel has fought the fine, which was imposed by the European Commission (EC) in 2009 over rebates awarded to major computer makers, including Dell, HP, and Lenovo, in exchange for prioritizing its Chipzilla’s CPUs over AMD’s.

In 2014 the General Court dismissed Intel's attempt to escape the fine. A subsequent appeal to the European Court of Justice saw that tribunal, Europe’s mightiest, send the case back to the General Court for reconsideration in 2017.

In January 2022, the General Court reached a new conclusion, calling the Commission’s analysis incomplete and arguing it failed to establish a legal standard that the "rebates at issue were capable of having, or were likely to have, anticompetitive effects."

The EC obviously wasn't happy with this ruling and quickly launched an appeal of their own. However, Court of Justice advocate general Laila Medina took issue with some of the arguments raised by the Commission in its latest attempt to hold Intel accountable for what it sees as an abuse of market position.

The advocate general's job is to serve as an independent voice that proposes impartial advice as to how the General Court should proceed.

In the opinion [PDF] Media skewered the Commission’s arguments that the General Court erred in its assessment of Intel's dealings with HP and non-cash advances provided to Lenovo in exchange for exclusive use of its CPUs. In the first case, Medina concluded that the Commission failed to adequately support the claims. And, with regard to Lenovo, the advocate general affirmed the General Courts 2022 findings, which took issue with Commission's application of the as-efficient-competitor (AEC) test.

The test is a framework for establishing to what extent certain business practices, like rebates, are harmful to competition. According to Medina, "the court should confirm that the Commission erred in applying the AEC test with respect to HP and Lenovo."

While Medina's opinion doesn't bode well for Brussels’ antitrust case against Intel, it is non-binding: the General Court can take it or leave it. It's also worth noting that Medina's opinion only addresses two of six grounds for appeal raised by the Commission.

Intel may not get away entirely unscathed either. The Commission early last fall hedged its bets against Intel, re-imposing a fine of €376.36 million (about $400 million) on the basis that the General Court had found Intel's use of rebates amounted to abuse of market dominance. ®

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