Intel just won a 15-year legal battle against EU
Intel has won a long-running legal battle against the EU after successfully overturning an antitrust fine imposed in 2009.
The European Commission had found the company abused its dominant position in the chip market and fined it €1.06 billion, marking a record at the time.
According to the European Commission, the company had been giving rebates, some disguised, to major computer manufacturers, including Dell, Hewlett-Packard, and Lenovo, on condition that they bought Intel’s x86 central processing units (CPUs). These were termed conditional rebates.
The company was also found to be paying manufacturers to stop or delay the launch of products based on rival chips such as those from Advanced Micro Devices (AMD). This was known as ‘naked restrictions’.
“Such rebates and payments effectively prevented customers, and ultimately consumers, from choosing alternative products,” the Commission said at the time.
“By undermining competitors’ ability to compete on the merits of their products, Intel’s actions undermined competition and innovation.”
Since then, the case has gone back and forth at a glacial pace. The fine was overturned in 2022 on the basis that the Commission’s analysis hadn’t been thorough enough to prove that Intel’s behavior had harmed competition.
The Commission then cut the fine to €376.36 million on the basis that it had only proved the naked restrictions were damaging competition, and not the conditional rebates.
In the wake of this, the Commission appealed, asking to reinstate the full amount of the original fine; but with this decision from the EU Court of Justice the case is finally over.
“The Court of Justice upholds the annulment by the General Court of the Commission’s decision finding an abuse of a dominant position on the part of Intel and imposing a fine of €1.06 billion on Intel,” the court said in a statement.
“In its judgment, the Court of Justice rejects all of the grounds of appeal raised by the Commission.”
While Intel may have dominated the chip market back in 2009, that’s very far from the case now. As recently as 2020, analysis from S&P Market Intelligence showed it was the world’s second-largest semiconductor corporation by market capitalization, behind only Taiwan Semiconductor Manufacturing Company (TSMC). Now, though, it’s number 14.
What’s changed is not just the rise of TSMC, but also the huge demand for AI, which has seen Nvidia’s sales boom. The chipmaker recently recorded revenues of $30 billion for the three months to 28 July.
This week, it was reported by Korean media outlet MK that Intel Foundry was in talks with Samsung over a collaboration aimed at toppling TSMC.
The reports suggest the two could partner on research and development, share production facilities and exchange process technologies, the report said.
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