EU top court sends Intel case back to lower court in appeal

Europe’s top judges dealt a rare blow to European Union antitrust regulators yesterday by sending their case against chipmaker Intel back to a lower court for an appeal.

In a move that may have ramifications for the EU watchdog’s cases against Qualcomm and Google, the EU Court of Justice said a court which had upheld a 1 billion euro (US$1.3 billion) European Commission fine against Intel should re-examine the US company’s appeal.

“The case is referred back to the General Court in order for it to examine the arguments put forward by Intel concerning the capacity of the rebates at issue to restrict competition,” the ECJ said in a statement.

The commission handed down the fine in 2009, a record at the time, saying that Intel had tried to block rival Advanced Micro Devices by giving rebates to PC makers Dell, Hewlett-Packard Co, NEC and Lenovo for buying most of their computer chips from Intel.

The ruling is good news for companies in the EU regulator’s crosshairs, Foad Hoseinian at law firm Freshfields said.

“This is a setback for the commission as it will be more closely scrutinized by the courts in the future. There is now a clear obligation to look at effects-based arguments,” he said.

Regulators have generally frowned upon rebates, especially those offered by dominant companies, based on the theory that they are anti-competitive in nature, while firms say that enforcers have to prove that they have anti-competitive effects before sanctioning them.

“Companies will be more confident when they go to the commission and more corporations will have the appetite to take the commission to court on effects-based arguments,” Hoseinian said.

The commission said it would study the judgment carefully and that it was up to the General Court to review its decision. Intel said it was reviewing the court ruling.

The ruling raises the bar for the regulator when it comes to proving wrongdoing, said Rein Wesseling, a partner at law firm Stibbe.

“It forces the commission to be as economic in its approach in other cases as it did in Intel. This is encouraging for Qualcomm and Google,” he said.

Google, which was hit with a landmark 2.42 billion euro fine in June over its Shopping service, is under fire over its Android smartphone operating system and online search advertising. Google has denied any wrongdoing.

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.