Intel wins court backing to fight €1bn European Union antitrust fine

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This article is being republished as part of our daily reproduction of articles that also appeared in the USA print edition of The Wall Street Journal (September 7, 2017). "While the Intel case is about rebates, all major corporates being investigated by the European Commission can take this as a positive sign".

The case targeted on claims that Intel had abused their dominant position in the microchip market.

The ECJ's ruling that the Commission must consider whether exclusivity rebates are capable of producing anti-competitive effects is welcome confirmation that the European Union antitrust rules seek to sanction practices based on their effect on competition rather than their form.

The lower court "was required to examine all of Intel's arguments" regarding a test to check whether the rebates used by the company was capable of harming competition, the EU Court of Justice in Luxembourg said Wednesday.

The Register notes that the fine itself was not kicked out, but a decision made by the lower court is being called into question. That could make it harder for the commission when it seeks to lodge another such antitrust case.

The ruling raises the bar for regulators when it comes to proving wrongdoing, said Rein Wesseling, a partner at law firm Stibbe."It forces the Commission to be as economic in its approach in other cases as it did in Intel".

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The Commission had imposed the fine in May 2009 claiming that the USA manufacturing giant which employs thousands of people in Leixlip, had abused its dominant position in the microchip market.

The initial penalty, which represented around 4.15 percent of Intel's 2008 revenues, was record-breaking at the time, but has recently been overtaken by a €2.4 billion ($2.7 billion) penalty against Google in June. Google has said it is considering an appeal.

Today's ECJ ruling could mean dominant companies feel they have more flexibility in offering rebates to high-volume buyers, suggested Komninos - adding that that could ultimately lead to cheaper priced products for consumers. As a result, it may also unintentionally make rules for compliance murkier. Intel appealed the Commission's decision to the General Court (GC) but the GC dismissed the appeal in 2014.

Ioannis Lianos, a competition law professor at University College London, tells us the reality of the Intel case's effects on future proceedings is not clear since the wording in the ECJ ruling is "ambiguous".

In 2009 Intel was slammed with a €1bn ($1.26bn) fine for allegedly urging computer makers to use its chips over rival AMD processors through exclusivity incentives.