EU court: judge must again consider 1 billion euros fine for Intel

The European Court of Justice has ruled that the General Court should reconsider the fine imposed on Intel in 2009 for abusing its dominant position. The rejection of Intel’s appeal has now been quashed for failure to address all of Intel’s objections.

The Court of Justice notes that when rejecting Intel’s appeal against the fine imposed, the General Court did not address all of Intel’s arguments. Specifically, this concerns the so-called legal AEC criterion. This is a hypothetical test to determine whether there is an undue restriction of competition by foreclosure of a competitor that is as efficient in the market as the dominant party. This criterion examines whether a hypothetical competitor of the dominant company would find itself in an untenable situation, such as a possible bankruptcy, if the competition would charge the same prices as the dominant party.

According to the General Court, this was the case: if AMD had charged the same prices as Intel, this would have been unsustainable for AMD, allowing Intel to indirectly push its competitor out of the market. However, according to the Court of Justice, the General Court has not dealt with all of Intel’s arguments relating to the application of this criterion. Intel, for example, argued that the European Commission, which imposed the fine in 2009, had made mistakes in the application of this criterion.

Since the General Court did not address this, the Court of Justice now refers the case back to the General Court to reassess the file. This means that it can be judged that the fine must ultimately still be upheld. In the light of Intel’s arguments which need to be reconsidered, it can also be considered that competition is not restricted and that therefore Intel is not to blame. In that case, the previously imposed fine may be crossed out.

In 2009, the European Commission fined Intel EUR 1.06 billion for abusing its dominant position. According to the then European Commissioner Neelie Kroes, Intel provided high discounts in the period from October 2002 to December 2007 to hardware manufacturers who did not purchase x86 processors from competitor AMD.

Intel challenged the fine in the Court of First Instance, but in 2014, the company received zero on its appeal, when none of its arguments were accepted by the Court. Intel found that the fine was disproportionate to the offenses and that there was too little evidence. Intel then decided to challenge the fine with the European Court of Justice, the highest European court.

In October 2016, Advocate General Nils Wahl of the European Court of Justice already found that the fine could not be upheld, because the General Court would have made several errors. According to Wahl, the judges could not fully demonstrate that the discounts provided by Intel actually had a negative effect on competition. The Advocate General’s opinion, in the form of an opinion, is not binding on the EU Court, but is often followed by the Court.