The European Commission has imposed a fine of €376.36 million ($400 million) on Intel for its anticompetitive practices, marking the conclusion of one part of the company’s long-standing antitrust battle with the European authority. This development follows a previous record-breaking fine of €1.06 billion ($1.13 billion) levied against Intel in 2009. At that time, the European Commission found that Intel had abused its dominant position in the market.
Background on Previous Fine
In 2009, the European Commission determined that Intel had engaged in anticompetitive behavior by offering hidden rebates and incentives to manufacturers such as HP, Dell, and Lenovo. These incentives were aimed at encouraging these manufacturers to purchase a significant portion or all of their processors from Intel. Additionally, Intel allegedly paid manufacturers to delay or halt the launch of products powered by rival CPUs, a practice referred to as “naked restrictions.” The European Commission concluded that these actions constituted antitrust violations.
Long-Running Legal Battle
The antitrust case has traversed multiple European courts over the years, with both Intel and the European Commission lodging appeals based on the court decisions. In 2017, the highest court in the European Union ordered a re-examination of the fine, citing the Commission’s failure to conduct an economic assessment of how Intel’s activities impacted its competitors’ ability to compete.
General Court’s Ruling
Last year, the General Court of the European Union determined that the European Commission had indeed failed to perform a thorough analysis of Intel’s rebate scheme. As a result, it could not ascertain how the incentives offered by Intel affected its competitors. While the General Court overturned Intel’s €1.06 billion fine, it upheld the previous courts’ decision that the company’s “naked restrictions” violated EU laws.
Examples of Anticompetitive Behavior
The European Commission provided examples of how Intel impeded the sales of competing products. It was revealed that Intel had paid HP between November 2002 and May 2005 to exclusively sell AMD-powered business desktops to small- and medium-sized enterprises through direct distribution channels. Additionally, Intel paid Acer to delay the launch of an AMD-based notebook from September 2003 to January 2004. Lenovo was also incentivized by Intel to postpone the release of AMD-based notebooks for six months.
Current Fine and Appeal Status
The European Commission’s recent decision imposes a fine of €376.36 million on Intel specifically for its “naked restrictions” practice. This fine does not relate to Intel’s conditional rebate practice. The amount of the fine is based on parameters similar to the 2009 Commission decision and reflects the narrower scope of the infringement compared to the initial ruling. Importantly, the part of the case related to the rebates offered by Intel to its clients is still under appeal, indicating that Intel may potentially face additional penalties in the future.
