Can Intel Fight Off This RECORD Punishment?
Intel (NASDAQ:INTC) is hoping to reverse a record 1.06 billion euro ($1.33 billion) fine in Europe after telling an appeals court that regulators used “profoundly inadequate” evidence in making a judgment. The chipmaker was fined by the EU three years ago after an eight-year investigation found it had unfairly hindered rival Advanced Micro Devices (NYSE:AMD).
European Union antitrust regulators imposed the biggest-ever fine for a company, which represented 4.15 percent of Intel’s 2008 turnover versus a possible maximum of 10 percent. Intel is now appealing the fine and its conviction in front of a panel of five judges at the General Court in Luxembourg. Europe’s second highest court will hear arguments from both the EU watchdog and Intel during a four-day hearing.
“The quality of evidence relied on by the Commission is profoundly inadequate,” Intel lawyer Nicholas Green told the court. “The analysis is hopelessly and irretrievably defective. The Commission’s case turns on what customers’ subjective understanding is.”
The EU found fault in Intel’s practice of offering device manufacturers Dell (NASDAQ:DELL), Hewlett-Packard (NYSE:HPQ), NEC, Lenovo, and retail chain Media Saturn Holding rebates, calling it an illegal business practice. According to the commission lawyer Nicholas Khan, Intel camouflaged anti-competitive practices. “These kind of rebates can only be intended to tie customers and put competitors in an unfavourable position,” Khan told judges.
Intel has received support from the Association for Competitive Technology, a lobby group representing 3,000 small software developers and information technology firms, as well as the European Ombudsman, which censured the Commission for procedural errors. The General Court is expected to rule in the coming months, and the appeal can further be taken to the EU Court of Justice, Europe’s highest court.
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