A 2009 European Union antitrust decision that hit Intel with an at-the-time record fined for — as the Commission saw it — abusing its No.1 position in the market for computer chips has been dealt a blow by the region’s top court. The European Court of Justice (ECJ) has now ruled that the case should be sent back to a lower court to be re-examined.
“The Court of Justice sets aside the judgment of the General Court, which had upheld the fine of €1.06 billion imposed on Intel by the Commission for abuse of a dominant position,” the ECJ said today.
“The case is referred back to the General Court in order for it to examine the arguments put forward by Intel concerning the capacity of the rebates at issue to restrict competition.”
In 2014 the EU’s General Court had upheld the earlier antitrust decision — but, according to Bloomberg, the ECJ said the judges failed to properly analyze the economic aspects of the case.
The lower court will need to examine whether rebates used by the company could have restricted competition — likely meaning there are years more left in a legal saga that has already clocked up more than eight years of appeals.
The activity by Intel that was deemed by the Commission to have breached EU competition law dates back to between 2002 and 2007. The EC takes that view that Intel had tried to block rival chipmaker AMD by giving rebates to PC makers for buying most of their computer chips from Intel.
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.
“This is certainly a defeat for the European Commission and indicates a certain relaxation of the formalistic case law on abuse of dominance,” he said in a statement.
“This is a very short judgment, just 20 pages long despite taking three years to produce. Short judgments signal a ruling based on a matter of principle, especially if rendered by the Grand Chamber of the ECJ like here, which means this is particularly encouraging for other big companies facing competition investigations. While the Intel case is about rebates, all major corporates being investigated by the European Commission can take this as a positive sign.”
Google, for instance, was issued with a record $2.7BN fine in June after the Commission decided — after a multi-year-long investigation — that its search comparison service, Google Shopping, had broken the bloc’s competition rules by squeezing the visibility of rival price comparison services in organic search results while simultaneously foregrounding its own service.
The EC has two more outstanding investigations into other areas of Google’s business, including its mobile operating system Android which is focused on the conditions the company places on mobile device makers to bundle other Google services onto devices in order to also be able to offer the Google Play app store.
While mobile chipmaker Qualcomm is facing EC charges that it used anti-competitive methods to squeeze out British phone software maker Icera, with an investigation ongoing.
Both Google and Qualcomm deny they have engaged in anti-competitive behavior in Europe.
Today’s ECJ ruling could mean dominant companies feel they have more flexibility in offering rebates to high-volume buyers, suggested Komninos — adding that it could ultimately lead to cheaper priced products for consumers.