Intel: EU antitrust evidence “profoundly inadequate”

EU antitrust regulators relied on “profoundly inadequate” evidence in their case against Intel, the chip giant said in court in a bid to quash a record €1.06 billion fine.

The European Commission penalised Intel three years ago for hindering arch-rival AMD, after an eight-year investigation.

The fine, which represented 4.15% of Intel’s 2008 turnover versus a possible maximum of 10%, was the biggest ever levied on a company.

A panel of five judges at the General Court in Luxembourg, Europe’s second highest, will hear arguments from both the EU watchdog and Intel during the four-day hearing, in which the company wants its conviction and fine thrown out or reduced.

The quality of evidence relied on by the Commission is profoundly inadequate

The Commission did not have sufficient evidence of any wrongdoing by Intel and relied too much on subjective comments by the company’s customers, Intel’s lawyer Nicholas Green told the court.

“The quality of evidence relied on by the Commission is profoundly inadequate. The analysis is hopelessly and irretrievably defective,” he said. “The Commission’s case turns on what customers’ subjective understanding is.”.

Dell, HP, NEC, Lenovo and German retail chain Media Saturn received rebates from Intel during the period investigated by the regulator.

Lawyers for the Commission said this was at the core of Intel’s illegal business practice. “These kind of rebates can only be intended to tie customers and put competitors in an unfavourable position,” Commission lawyer Nicholas Khan told judges.

He said contract wording also showed that “Intel carefully camouflaged its anticompetitive practices”.

Procedural errors

However, Intel gained backing from the European Ombudsman, who censured the Commission for procedural errors in its investigation.

In his non-binding report issued five months after the regulatory finding, the Ombudsman said he had found “maladministration” because the regulator had failed to make a proper note of a meeting with Dell during its probe.

The General Court is expected to rule in the coming months. Companies can appeal to the highest court, the EU Court of Justice, if they take their case further.