General Court annuls European Commission’s 2009 €1.06 billion fine on Intel

Thirteen years after the European Commission imposed a EUR 1.06bn fine on US chipmaker Intel on charges of abusing its market dominance and seeking to exclude a competitor from the market, Intel has successfully persuaded the General Court to annul the fine in its entirety.  

In 2009, the Commission found that Intel had restricted competition by granting conditional rebates to original equipment manufacturers (OEMs) and paying those same OEMs to delay the launch of certain products containing a competitor’s chips.  The General Court only struck down the part of the Commission’s decision relating to conditional rebates, but it annulled the fine in full as it could not determine which part of the fine related to which practice.

This is the second time the General Court has reviewed the Commission’s decision against Intel. In 2014 it upheld the Commission’s findings, but that decision was struck down in 2017 by the Court of Justice which sent it back to the General Court for reconsideration on the basis it had failed to review Intel’s arguments about the “as efficient competitor” (AEC) test.  This time, the General Court found that the Commission’s economic analysis as regards the AEC test was “vitiated by errors”, and did not establish to the requisite standard that the contested rebates were capable of having, or likely to have, anti-competitive effects.  It also found the Commission had failed to consider properly the rebates’ duration, the proportion of the market affected and whether Intel had employed a deliberate strategy of exclusion.  

The General Court’s decision is a huge blow for the Commission, which will have to repay both the fine itself and potentially interest accrued over the last thirteen years.  The Commission also now has to decide whether to appeal to the Court of Justice, revisit its original investigation to assess whether the errors may be rectified (and, if so, seek to re-impose its decision on Intel) or prioritise its resources for other (ongoing) investigations.  The Commission has said it will carefully study the judgment and reflect on next steps.  While the General Court’s judgment represents a major win for Intel, the twists and turns in this long-running drama may not yet be over. 

We will shortly be publishing a fuller briefing looking in greater detail at the General Court’s judgment and its wider implications.