On 22 September 2023, the European Commission (“EC”) re-imposed a €376.3 million fine on Intel for ‘naked restrictions’ in the computer chips market between 2002 and 2006, continuing a saga that has been running since at least 2007.
In 2009, the EC fined Intel €1.06 billion for abusing its dominant position in the market for x86 central processing unit (“CPUs”) which are computer chips used in personal computers. The EC found Intel was dominant in the supply of CPUs and was engaged in the following abusive conduct between 2002 and 2007:
- giving wholly or partially hidden rebates to computer manufacturers on condition that they bought all, or almost all, their x86 CPUs from Intel (‘conditional rebates’); and
- paying computer manufacturers to halt or delay the launch of specific products containing competitors’ x86 CPUs and to limit the sales channels available to these products (‘naked restrictions’).
In 2014, Intel appealed the €1.06 billion fine to the General Court (“GC”) on the basis that the Commission did not properly analyse the potential or actual foreclosure effects of the conditional rebates. Intel’s appeal was dismissed as the court found that the conditional rebates amounted to exclusivity rebates and therefore did not require analysis as to the effects and that the Commission need only show that the conditional rebates were capable of having an anti-competitive effect (see paras 95-105 of the judgment).
In 2017, Intel launched a further appeal of the GC’s dismissal to the Court of Justice (CJEU) which was ultimately successful (see our article about the CJEU’s judgment here). In an important judgment, with wider implications for how abuse of dominance cases are assessed, the CJEU held that the General Court did not sufficiently analyse all of Intel’s arguments that its conduct did not foreclose competitors. The 2014 decision was annulled and the case was remitted to the General Court.
In 2022, the GC annulled the part of the EC’s 2009 decision concerning conditional rebates. The Commission has since appealed this element of the GC’s 2022 judgment, the outcome of which is still pending.
The GC’s 2022 judgment also confirmed the unlawfulness of the naked restrictions. However, the full €1.06 billion fine was nevertheless annulled as the GC could not determine the allocation of the fine to each aspect of the conduct. This prompted Intel to make a €593 million claim for repayment of interest (plus interest) on the €1.06 billion provisionally paid to the commission.
Reimposed fine for ‘naked restrictions’
Following the 2022 GC finding that the ‘naked restrictions’ were illegal, the EC has now re-imposed a fine of €376.3 million for Intel’s conduct between 2002 and 2006.
Intel appears to be mulling over its options of whether to appeal the fine, noting ‘we are analysing the decision and the amount of the fine to determine the possible grounds and prospects of success of an appeal to the European Courts.,” the company has said in a statement to Reuters The EC’s decision, and the details of any further decisions made if Intel appeal, will appear on the relevant case page on the EC’s website.
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