Intel Judgement Critical for Other EU Antitrust Cases

 
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Intel Judgement Critical for Other EU Antitrust Cases

Highlights

  • EU will give its ruling over Intel's chip pricing case on Wednesday
  • Qualcomm Inc. could be the most directly affected by the ruling
  • It will also affect EU's antitrust fine on Google that it imposed in June

Europe's top court will rule on Wednesday whether US chipmaker Intel offered illegal rebates to squeeze out rivals in a judgement that could affect EU antitrust regulators' cases against Qualcomm and Alphabet's Google.

The ruling by the Luxembourg-based Court of Justice of the European Union (ECJ) could also provide more clarity on whether rebates are anti-competitive by nature or whether enforcers need to prove the anti-competitive effect.

The European Commission in a 2009 decision said that Intel tried to thwart rival Advanced Micro Devices by giving rebates to PC makers Dell, Hewlett Packard, NEC, and Lenovo for buying most of their computer chips from the company.

It handed down a EUR 1.06 billion ($1.3 billion) fine, a record that was subsequently eclipsed by the EUR 2.4 billion fine levied on Google in June this year.

A lower court upheld the EU competition authority's decision in 2014, but last year an ECJ court adviser backed Intel's arguments.

An adverse ruling for the Commission on Wednesday could result in a radical review of ongoing cases, said Andrew Ward, a partner at Madrid-based law firm Cuatrecasas.

"A loss in such a high-profile case would be embarrassing (for the regulator)," he said, adding that it might mean that long-established theories and processes would need to be reassessed.

"Losing against Intel would clearly be a blow to the Commission and a confidence boost for Google, since on the face of it the theory of harm is much more established in the Intel case."

Google has come under fire from the EU over its Android smartphone operating system and online search advertising.

US chipmaker Qualcomm, meanwhile, faces EU charges of using anti-competitive methods to squeeze out British phone software maker Icera and of making illegal payments to a major customer for exclusively using its chipsets since 2011.

It would be a rare departure, however, for the ECJ to go against the Commission.

"If the Commission wins, it will be business as usual. They will be even more confident in their agenda," another lawyer said.

© Thomson Reuters 2017

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