EU Ombudsman faults EC's Intel antitrust ruling

IDG News Service - The European Ombudsman accused the European Commission on Thursday of "maladministration" during its antitrust investigation of Intel, which resulted in a hefty fine earlier this year, as well as an order to desist from its anti-competitive practices.

The Ombudsman, Nikiforos Diamandouros, was responding to a complaint lodged by Intel following the ruling in May. Intel then took its complaint to the European Court of First Instance in Luxembourg. That appeal, which carries greater legal weight than the opinion of the Ombudsman, is expected to be heard during the fist half of 2010.

The ombudsman's decision is not legally binding and cannot undo the Commissions antitrust finding in May, which fined the company $1.57 billion. However, it could influence the Court of First Instance's assessment of Intel's appeal.

In its complaint to the Ombudsman, Intel claimed that the Commission failed to take minutes of a meeting with a senior Dell executive held on Aug. 23, 2006, even though the meeting directly concerned the subject matter of the Commission's antitrust investigation of Intel.

The Ombudsman agreed that the meeting did concern the subject matter of the Commission investigation. "He also found that the Commission did not make a proper note of that meeting and that its investigation file did not include the agenda of the meeting. The Ombudsman concluded that this constituted maladministration," the Ombudsman's office said in a statement.

However, it added that Diamandouros didn't support Intel's claim that the Commission had effectively infringed the company's right of defense.

Nor did he support a separate claim of maladministration made by Intel, concerning documents obtained from two unnamed companies assisting in the antitrust investigation.

The Commission, however, disputed the ombudsman's findings regarding the meeting with Dell.

And regarding the submissions from the two companies, it said it "welcomes the fact that the ombudsman has not found that the Commission committed any maladministration" in regards to the exchange of information from the two companies involved in the Intel case. It described the information as "purely bilateral matters between the parties concerned."

The ombudsman's role in keeping the Commission in check has been superseded by the involvement of the Court of First Instance, said one person close to the Commission who asked not to be named.

"His decision isn't terribly relevant now that the court appeal has been lodged," the person said, but he added that the ombudsman's view could influence the court's opinion.

Intel welcomed the ombudsman's decision, saying it "speaks for itself."

"Intel has said that the European Commission ignored evidence that was potentially exculpatory for Intel and that it was selective in its use of other evidence," the company said in a statement.