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EU advisor backs Intel in €1.06bn antitrust fine fight

Advisor said the case should be sent back to lower court for review.

By CBR Staff Writer

US chipmaker Intel’s legal tussle against the EU in a record €1.06bn ($1.17bn) antitrust fine case has received backing from an adviser to the bloc’s top court.

Advocate General of the Court of Justice of the European Union (ECJ) Nils Wahl said that the lower court should review Intel’s appeal over the fine levied by the antitrust regulators seven years ago.

Wahl said: “Intel’s appeal against the imposition of a 1.06 billion euro fine for abuse of its dominant position should be upheld.”

In May 2009, the European Commission fined Intel for abusing its dominant position in the chip market, by adopting practices aimed at preventing competition from Advanced Micro Devices.

The tactics included offering rebates to PC makers Dell, Hewlett-Packard, NEC and Lenovo for buying a significant part of their computer chips from Intel from October 2002 to December 2007.

Wahl said: “The General Court found that the rebates granted to Dell, HP, NEC and Lenovo are exclusivity rebates’ and, because of this classification, did not consider it necessary to consider the capability of such a rebate to restrict competition.”

The fine accounted for about 4% of Intel’s revenue of $37.6bn in 2008 and is below the maximum penalty of 10% of annual sales regulators are allowed to levy.

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The top court will decide on Wahl’s views on Intel’s appeal in a ruling that it is expected to be announced within six months, Bloomberg reported.

Wahl said that a final judgment was not possible at this stage in the wake of “the errors committed” by the General Court.

Wahl said: “The General Court erred in law in its alternative assessment of capability by failing to establish, on the basis of all the circumstances, that the rebates and payments offered by the appellant had, in all likelihood, an anti-competitive foreclosure effect.”

He added that the case should be “referred back” to the lower EU court to review all the circumstances of the case.

A win for Intel in the case would turn the focus on EU antitrust regulators facing a legal battle with Ireland and Apple over the way a probe was carried out in the iPhone maker’s €13bn tax bill.

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