In one of the European Union’s longest battles with tech giants, it has fined the computer processing unit (CPU) maker €376.36 million (roughly $400 million). This case is not as new as it may seem, however.
The fine is part of an old case that Intel has been fighting for over a decade after it was caught violating EU antitrust laws in the 2000s. The European Commission tried to fine Intel over €1 billion (worth over $1.45 billion at the time) in 2009 for various abuses of its market power.
The original finding of the commission was that Intel broke EU laws in 2 main ways. It claimed that the chip-maker was illegally using conditional rebates where it would give large rebates to PC makers like HP if they only or mostly used Intel’s x86 CPUs (and not Intel’s competitor AMD’s chip).
Furthermore, it found that Intel was also illegally using a tactic called naked restrictions where it would pay PC makers to delay or halt the release of products with AMD chips in them and limit where they could be sold.
Intel fought both of these charges tooth and nail in the courts for many years and was able to convince the EU General Court to annul the conditional rebate part of the decision in 2017. It found that the Commission simply didn’t prove that these rebates had the capability to harm competition.
This decision turned out to be a double-edged sword for Intel as the same court also found that the naked restriction charges were indeed applied lawfully. The chip-maker didn’t appeal this part of the decision so it is now final, unlike much of the rest of the case.
The EU General Court annulled the €1 billion fine to reflect the changes to the decision and left it to the EU Commission to bring a new fine based on the naked restrictions alone. Now, 6 years later, it has finally come up with a new figure of €376.36 million.
How Did Intel Break EU Antitrust Laws?
The new fine was based on 3 specific violations that include:
- Intel paid HP between 2002 and 2005 to:
- Only sell x86 AMD business desktops to small and medium-sized companies
- Only sell these desktops through direct distribution, not distributors
- To postpone the first European launch of its AMD business desktop by 6 months
- Intel paid Acer to postpone the launch of its AMD-based laptops for 6 months in 2006
- Intel paid Lenovo to to postpone its AMD-based laptops for 6 months in 2006
The commission found that these actions significantly harmed competition in the CPU industry as they removed reasonable choices from the market and AMD was Intel’s only real competitor.
Is the Legal Battle Between the EU and Intel Over?
The legal battles between the EU and Intel continue to rage on. The EU is trying to appeal the General Court’s decision to annul the conditional rebate charges but the case is still pending. Intel is also fighting the Commission in the courts but for an entirely different reason.
A recent court decision in 2021 found that the EU Commission must pay default interest on reimbursed fines from annulled antitrust cases. It even added that late payment of this interest incurs further interest. Intel filed a claim last year to secure €593 million in interest from the EU after the €1 billion fine was annulled.
Intel claimed that the EU refused to pay the default interest on the reimbursed fine and is fighting in the courts to get it. This case is awaiting a final decision from the EU Court of Justice on the Commission’s appeals before it can move forward.
If the Commission wins its appeal of the annulment of the conditional rebate charges, much (if not all) of the original fine will likely be reinstated and it won’t have to pay Intel any interest. If it loses, the chip-maker will likely be owed hundreds of millions of dollars in interest.