Intel appeals EU antitrust fine

IDG News Service - Intel this week presented an array of arguments to the E.U. General Court in its appeal of a massive 1.06 billion euros (US$1.33 billion) fine imposed by Europe's antitrust regulators.

In 2009, the European Commission fined Intel for using rebates to block rivals. The commission said that between 2002 and 2005, Dell, Hewlett-Packard, NEC, Lenovo and Media Saturn Holding all received financial incentives from Intel not to buy computer chips from its rivals.

Intel's lawyer Nicholas Green told the court that the commission's analysis was "simplistic" and failed to meet the burden of proof.

The commission argues that the condition that customers buy at least 95% of chips for personal computers from Intel was detrimental to Intel's main rival AMD. The antitrust fine was the E.U.'s biggest and represented about 4% of Intel's annual turnover in 2008. The Commission can impose fines of up to 10% of turnover. Intel is seeking to have the fine annulled or substantially reduced.

Lawyers for Intel say that the commission was faulty in finding that the discounts it granted to its customers were abusive per se by virtue of being conditional, without establishing that they had an actual capability to foreclose competition.

They also contend that the commission failed to take into account evidence that one of Intel's competitors actually increased its market share and profitability in the period under review. Nor did the commission establish a causal link between conditional discounts and the decisions of Intel's customers not to purchase from that competitor according to Intel.

Lawyers also told the five presiding judges that the commission did not procure certain internal documents from AMD that, according to Intel, were potentially exculpatory of Intel, nor did it make a proper note of its meeting with a key witness from one of Intel's customers, who was highly likely to have given exculpatory evidence.

Finally the chip makers say that the commission's failure to grant Intel an oral hearing following the Statement of Objections materially harmed Intel's defense and that the size of the fine is disproportionate.

The proceedings closed on Friday and the judges will now consider the evidence. A ruling is not expected for several months.

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