Intel sets out case against record EU fine

Europe’s top competition watchdog failed to evaluate the evidence properly and “materially infringed” Intel’s rights of defence in an investigation that led to a record fine of €1.1bn ($1.6bn), lawyers for the US chipmaker have argued.

The fine was imposed by the European Commission in May after a long-running probe concluded that Intel had abused its dominant market position and used illegal sales practices to encourage computer manufacturers to carry its products.

Intel said in July it intended to appeal against the decision. The grounds of appeal, published in the European Union’s official journal, show that the company’s lawyers plan to focus on how Commission officials assessed the evidence.

The chipmaker claims the Commission failed to “meet the required standard of proof” in its analysis; failed to address evidence that showed a competitor substantially increasing market share at one stage; failed to establish a causal link between Intel’s so-called “conditional discounts” and the decisions of customers not to purchase chips from AMD, Intel’s main competitor; and failed to analyse how those discounts affected consumers.

Intel is also raising a series of legal arguments. These centre on a challenge to the Commission’s finding that its discounts were abusive in themselves because they were conditional – without assessing whether they had the capacity to reduce competition.

It also contends that procedural developments towards the end of the inquiry infringed its defence rights and that the fine was “manifestly disproportionate”.

The fine was the largest single penalty imposed on a company for antitrust breaches in Europe. At the time, Neelie Kroes, EU competition commissioner, said: “Given that Intel has harmed millions of consumers ... the size of the fine should come as no surprise.”

Appeals to the top EU courts in Luxembourg can take several years.

AMD said it was confident that when evidence of antitrust regulators in Europe and Asia – where there have also been findings against the chipmaker – was independently reviewed, there would be “no doubt that Intel illegally abused its monopoly power and harmed consumers”.