Intel heads to court to appeal record EU antitrust fine

The chip giant has taken to the EU's second-highest court to appeal a record antitrust fine, following a European Commission ruling that Intel engaged in anticompetitive behavior.

Intel has begun an appeal against its record antitrust fine, calling the evidence against it "profoundly inadequate."

The fine was levied by EU antitrust regulators in 2009, after Intel was found to have engaged in anticompetitive behavior in order to hinder rival Advanced Micro Devices through the use of rebates and contract conditions.

After an eight-year investigation, Intel was fined a record $1.06 billion in 2009, or more than 4.1 percent of Intel's 2008 turnover. The fine, the largest ever levied by the EU against a company, currently stands at $1.34 billion due to economic fluctuations.

Immediately after the fine was imposed, Intel CEO Paul Otellini said Intel would appeal, adding:

"We believe the decision is wrong and ignores the reality of a highly competitive microprocessor marketplace. There has been absolutely zero harm to consumers. Intel will appeal."

It took three years, but the appeal is according to Reutersnow in full swing, with Intel stating in court that EU antitrust regulators relied on "profoundly inadequate" evidence.

As part of a four-day hearing, a panel of five judges at the General Court in Luxembourg -- the second highest court in Europe behind the European Union's Court of Justice -- will hear from both the EU and Intel.

Intel's lawyer Nicholas Green told the court that the European Commission did not have evidence strong enough to justify the original ruling. He said:

"The quality of evidence relied on by the Commission is profoundly inadequate. The analysis is hopelessly and irretrievably defective. The Commission's case turns on what customers' subjective understanding is."

According to the Commission, Dell, HP, NEC, Lenovo, and Media Saturn Holding all received rebates from Intel during the period that was investigated.

Commission lawyer Nicholas Khan told the panel of judges:

"These kind of rebates can only be intended to tie customers and put competitors in an unfavorable position. Intel carefully camouflaged its anti-competitive practices."

However, there may be a silver lining for Intel: the European Ombudsman criticised the Commission earlier this year for failures in sticking to procedure.

In a non-binding report issued five months after the ruling, the Ombudsman said that "maladministration" had been found in the EC, as the regulator had omitted meeting details with Dell from the record.

The General Court is expected to rule in the next few months. Should it not find in Intel's favor, the company still has the option to then take the case to the European Union's Court of Justice.

This post was first published on ZDNet.

 

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