After overturning a $1.2 billion (~€1.06b) antitrust fine imposed on it by the European Commission (EC) this January, Intel has now filed with the EU General Court for compensation. The Santa Clara-based company, which achieved $20 billion in revenues last year, is claiming almost half of the original fine, to the tune of $623.5 million (€593m) in interest charges accrued for the duration of the litigation.
The fine, originally imposed in 2009, revolved around accusations of Intel blocking rival chipmaker AMD from accessing the market by giving substantial rebates to Dell, HP, and Lenovo if they sourced at least 95% of their chips from Intel.
Intel is filing for “payment of compensation and consequential interest for the damage sustained because of the European Commissions refusal to pay Intel default interest”, as submitted on Monday to the EC. According to the company, it is owed the default interest rates applied throughout the length of the legal battle since the original, 2009 ruling.
Intel’s own math on the matter is based on an analysis of the European Central Bank’s refinancing rate, set at 1.25 percent in 2009, with an increase of 3.5 percent points in the 13 years since. Intel is also claiming interest on any late reimbursement of the original fine.
The 2009 decision followed a five year investigation diving deep into Intel’s alleged anti-competitive practices. AMD filed complaints on Intel’s alleged anticompetitive behavior as far as 2000, and once again in 2003, prompting the official investigation.
“The evidence gathered by the commission led to the conclusion that Intel’s conditional rebates and payments induced the loyalty of key OEMs and of a major retailer, the effects of which were complementary in that they significantly diminished competitors’ ability to compete on the merits of their x86 CPUs,” the EC wrote in the 2009 ruling. “Intel’s anticompetitive conduct thereby resulted in a reduction of consumer choice and in lower incentives to innovate.”
According to the ruling, the EC had found sufficient evidence to sustain the allegations as occurring between October 2002 and December 2007. Several moments mark the 13-year lag between the original and final rulings, from a first appeal to the General Court in 2012 (which it rejected in 2014), Intel then brought the issue to the attention of the European Court of Justice, which found enough matter to re-submit the decision toward the General Court in 2017.
According to court documentation, “In its analysis of whether the rebates at issue were capable of restricting competition, the General Court wrongly failed to take into consideration Intel’s line of argument seeking to expose alleged errors committed by the Commission in the AEC [As-Efficient Competitor] test.”
Intel’s AEC argument essentially held that the court failed to prove that AMD was as efficient a competitor as Intel. It logically results from this that Intel’s practices couldn’t be anti-competitive, because neither AMD nor its products provided adequate competition from the beginning. Thus, its offering of rebates aimed only to provide better deals to its most significant clients, which would choose Intel’s technologically superior products in either case. Interestingly, AMD’s products throughout this time-frame included the famed Athlon 64 4000+ and FX-55 CPUs.
Intel’s argument, and the subsequent investigation on court and evidence-gathering proceedings, led to the decision’s eventual overturn as of January 2022. In an email statement provided to The Register, an Intel spokesperson said that, “We [Intel] welcome today’s ruling by the General Court as we have always believed that our actions regarding rebates were lawful and did not harm competition,” adding that, “The semiconductor industry has never been more competitive than it is today and we look forward to continuing to invest and grow in Europe.”
Once a hallmark case in the EC’s fight against anti-competitive practices, the most recent overturn stated that the Commission’s original analysis was incomplete, and said it had failed to establish that “[the] rebates at issue were capable of having, or were likely to have, anticompetitive effects.”
While one might hope that 13 years and a series of appeals would be enough to settle the matter permanently, the battle is still ongoing. Just this April, a spokesperson for the EC confirmed to The Register that the European Commission would appeal (opens in new tab) the court’s decision to overturn the fine – an appeal which is still ongoing. Perhaps the legal battle will still end within our lifetimes.