Simran Joshi
The European Court of Justice has delivered a significant ruling in favor of Intel, marking the end of a protracted legal battle with EU regulators that spanned nearly two decades. The court upheld a previous judgment by the General Court, dismissing the European Commission’s appeal regarding Intel’s rebate practices with major computer manufacturers. The Commission had initially fined Intel over 1 billion euros for allegedly using these rebates to hinder competition from rival chipmaker Advanced Micro Devices (AMD). This decision highlights the ongoing debate over the interpretation of anti-competitive practices within the EU.
Court Ruling in Favor of EU Case against Intel
In a historic judgment, the EU Court of Justice decided in favor of Intel, bringing to a close nearly two decades of protracted litigation. The court ordered the dismissal of an appeal by the European Commission and thus upheld the order of the General Court that had earlier decided in favor of the chipmaker. The ruling is a significant victory for the US chipmaker against EU regulators who indicted the company for anti-competitive practices.
The ruling has highlighted the complexity of competition law cases but posed challenges to those who were supposed to prove the anti-competitive behavior by regulators. Intel’s brainy lawyers managed to convincingly argue that rebates accorded to major manufacturers of computers were simply mundane business practices that could not be qualified to be anticompetitive.
This decision may have far-reaching implications in the way regulators will handle such types of cases going forward.
Implication for Competition Law
The move has raised questions about the efficacy of the European Commission in handling its policies related to controlling the mighty tech companies. At one point, it had levied a heavy 1.06 billion euros fine on Intel for virtually countering competition by giving rebates to certain manufacturers. But in that decision, also, it returned in its favor as a lower tribunal ruled out the penalty, clearly suggesting the requirement of some fine economic analysis in the matter.
But experts believe the judgment could lead to a review of the treatment of rebates and discounts under EU competition law. As such, in practice, companies frequently argue that proof should be established that an action by regulators is anti-competitive in its effects before they impose restraints. There may be a precedent here that will make regulators not only look more closely at allegations but also actually apply rigorous economic analysis in determining whether actions constitute similar practices.
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