EU Intel Decision Bolsters Tech Cos.' Antitrust Defenses

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The lower court "was required to examine all of Intel's arguments" regarding a test to check whether the rebates used by the company was capable of harming competition, the EU Court of Justice in Luxembourg said Wednesday.

The European Court of Justice has delivered its much anticipated judgment in the case of Intel v Commission,[1] rejecting the controversial finding of the General Court that exclusivity rebates are per se abuses of dominance.

The Commission had imposed the fine in May 2009 claiming that the United States manufacturing giant which employs thousands of people in Leixlip, had abused its dominant position in the microchip market. Intel then brought a further appeal to the European Court of Justice (ECJ). Intel claimed that the General Court erred in law when reaching its decision to uphold the fine imposed by the Commission. "The case should be referred back to the General Court for a fresh review".

Commenting on today's ECJ's ruling, Assimakis Komninos, partner at global law firm White & Case, suggested it is encouraging for other big corporations that are also embroiled in EC antitrust actions and investigations.

"The court therefore sets aside the judgment as a result of that failure in its analysis", it said...

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Intel declined to immediately comment, saying it needed to study the ruling first.

The commission said Intel foreclosed one of its competitors, Advanced Micro Devices Inc., from the market by granting rebates to four major computer manufacturers on the condition that they purchased all, or nearly all, of their x86 CPUs from Intel.

It has also fined Google €2.4 billion for fiddling online shopping searches and has threatened to fine it €5 billion more on the way it sells its Android operating system.

The CJEU concluded that the General Court had erred in law by failing to examine the rebates Intel had provided "in the light of all the relevant circumstances".

Firstly Intel gave rebates to computer vendors on the condition that they bought their x86 processors from the chip maker and made direct payments to one major retailer on the condition that only stocked PCs with Intel chips. The court turned it down, arguing that the exclusivity rebates were by nature "incompatible with the objective of undistorted competition within the common market".