Talk about old news: The European Union has reimposed a fine (totaling €376.36 million) on Intel for antitrust violations dating back decades.
Veteran technology watchers may recall that the chipmaker was slapped with a much larger fine, more than €1 billion, by the European Union in 2009, as Intel was found to have abused its chip market dominance to exclude rival AMD by pushing PC makers… and retailers to Intel. Delay, cancel, or simply not sell products containing AMD chips.
The huge penalty kicked off years of legal challenges. Some are still ongoing (yes, in the year of our Lord 2023). But Intel no longer appealed one of its components, and so the EU re-imposed a (significantly less hefty) fine on that specific component.
Today’s development follows a ruling by the EU’s General Court last year – following a 2017 decision by the bloc’s top court to refer the case back to the lower court for review – which overturned part of the Commission’s original decision on so-called “conditional rebates” (known as Also in the name of its claim that Intel granted full or partial rebates to PC manufacturers on the condition that they purchase all/almost all of their x86 CPUs from Intel); But it confirmed the illegality of Intel’s “bare restrictions” (aka paying PC manufacturers to halt or delay the launch of specific products containing competing x86 CPUs and limiting the sales channels available for those products).
At the same time, the General Court annulled the entire fine imposed by the Commission in 2009 because it was unable to determine the amount of the penalty relating to bare restraints alone. And so we arrive at a figure of €376.36 million (about $400 million) today – which, according to the Commission, reflects the “explicit restrictions” that EU judges asserted Intel had applied unlawfully.
What exactly are the restrictions that Intel has been (re)fined at the moment? here Collapse of the committee:
- Between November 2002 and May 2005, Intel made payments to HP on the condition that HP sell business desktop computers based on competitor AMD’s x86 CPUs (i) only to small and medium-sized enterprises; (2) only through direct distribution channels (rather than through distributors); (3) HP postponed the launch of the first AMD processor-based business desktop in Europe by 6 months
- Intel made payments to Acer conditional on Acer delaying the launch of an AMD-based laptop from September 2003 to January 2004.
- Intel made payments to Lenovo conditional on Lenovo delaying the launch of AMD-based laptops from June 2006 to the end of 2006
“As a result of these restrictions, computer manufacturers halted, delayed, or imposed restrictions on the marketing of products based on a competitor’s chipsets, which they had actively planned and for which there was demand by consumers. Intel’s clear restrictions thus had a detrimental impact on competition in market, by depriving customers of the choice they would otherwise have had.
The amount of the fine Intel will be reimposed is based on the same criteria as in its 2009 decision, according to the panel — the reduction reflecting the “narrower scope of the violation” compared to that decision.
The EU is still appealing the General Court’s other ruling last year that the Commission’s assessment of Intel’s conditional rebates was incomplete and that the decision did not sufficiently establish that the rebates have the potential to restrict competition. Therefore, you did not give up the possibility of recovering more of the previous fine amount. But this appeal is still pending.
The Commission Question and Answer The latest case development includes a question asking why a fine would be imposed for a violation that “may have limited effect in the European Economic Area (EEA) and 15 years after the violation has ended”?
“The Court of Justice confirmed that the infringement amounts to a serious breach of EU competition rules, with significant impact in the European Economic Area. (C-413/14 p). The Commission is committed to enforcing EU competition rules and ensuring that such anti-competitive practices do not remain unsanctioned.
Interest payments battle
The memo also states that the Commission repaid Intel in full the “provisionally paid” fine and “applicable interest” last year. But this aspect of the saga is also the target of legal action.
This stems from A Resolution 2021 By the bloc’s Supreme Court which ruled that the Commission must pay default interest on fines recovered in canceled antitrust cases which must be the rate set by the European Central Bank for major refinancing operations, plus 3.5 percentage points.
last summer Intel duly filed a claim for €593 million in benefits from the EU, which allegedly refused to pay the default interest on the canceled penalty. Although these proceedings have been suspended in the General Court pending the final decision of the Court of Justice of the European Union on the Commission’s appeals in two cases before the European Court of Justice.
Last year the European Union Executive also The European Union has approved a proposal for a targeted amendment to the bloc’s financial regulation that includes a proposal that fines paid temporarily that are later canceled or reduced by the European Court of Justice be compensated with interest at the rate the European Central Bank applies to its major refinancing operations, which is 1.5 percentage points higher.