HERAKLION, Greece — A European court turned down Intel's appeal of a 2009 antitrust case in which it levied a €1.06 billion (US$1.43 billion) fine against Intel, its largest fine ever in an anti-competition case.
Intel can still appeal the decision to Europe's highest court, the European Court of Justice, according to The New York Times. Intel did not immediately comment on a statement from the General Court of the European Union, which rejected the appeal June 12.
The original case concluded in May 2009 that Intel made payments to computer makers Dell, Lenovo, Hewlett-Packard, and NEC on the condition that they purchased from Intel all or almost all of their x86 CPUs. In addition, Intel gave European PC retailer Media-Saturn payments for exclusively selling PCs using Intel processors, the court said.
The original case also found Intel paid Acer, HP, and Lenovo to postpone or cancel the launch of AMD CPU-based products or to put restrictions on how the AMD-based PCs were distributed.
The US government also conducted separate investigations against Intel and Microsoft for similar practices. AMD sparked both the US and European cases against Intel. Intel settled its case in the US.
At the time of the original cases, some OEMs told EE Times at least some of the payments came as part of joint marketing agreements broadly used by Intel and Microsoft. The payments would often be substantial and come just before quarterly earnings, making them more attractive to PC makers operating on razor-thin profits, one HP source told EE Times.
In a 2013 interview a former Intel executive described how some of those payment programs got their start with deals between Intel and IBM.
Intel argued on several points in its European appeal that the fine should be eliminated or reduced.
The European court rejected Intel's argument that the court needed to prove on a case-by-case basis that the so-called rebates hurt competition. It pointed in part to Intel's 70% or larger share of the x86 processor market.
In its statement, the European court detailed reasons it denied Intel's arguments. For example, it said:
Exclusivity rebates granted by an undertaking in a dominant position are, by their very nature, capable of restricting competition and foreclosing competitors from the market. It is thus not necessary to show that they are capable of restricting competition on a case by case basis.
Intel attempted to conceal the anti-competitive nature of its practices and implemented a long term comprehensive strategy to foreclose AMD from the strategically most important sales channels.
Regarding the fine it said:
The fine is appropriate in the light of the facts of the case... the Commission set the proportion of the value of sales at 5% which is at the lower end of the scale which can go up to 30%. Moreover, the fine is equivalent to 4.15% of Intel's annual turnover, which is well below the 10% ceiling provided for.
— Rick Merritt, Silicon Valley Bureau Chief, EE Times