On Thursday 20 October, the Advocate General, Nils Wahl, suggested that that the European Court of Justice should send back the case involving a record EU fine imposed on the US Intel Corporation in 2009, to the General Court as he considers that there are several points of litigation that should be subject to thorough analysis.
In 2009, the European Commission ruled against the US microprocessor manufacture and imposed a fine of €1.06 billion for abuse of dominant position (see EUROPE 9901). In June 2014, the General Court of the EU rejected in its entirety the request submitted by Intel for this decision to be quashed (see EUROPE 11099). The Advocate General has now proposed to the European Court of Justice to provide a favourable response to Intel’s appeal by annulling the decision of the General Court and sending the case back to it in order to carry out another examination.
Wahl believes that the appeal is receivable. Of the six legal errors made by the Court, according to Intel’s lawyers, five are justified, he says in his opinion. These are: the legal characterisation of rebates as “exclusivity rebates”; finding of an infringement in 2006 and 2007; the classification as “exclusivity rebates” of certain rebate arrangements that covered a minority of a customer’s purchases; the interpretation of EU law concerning the absence of an obligation to record an interview which the Commission held with an executive of Dell; the Commission’s jurisdiction regarding Intel’s arrangements in China with Lenovo and the amount of the fine and the retroactive application of the 2006 Guidelines on the setting of fines.
Wahl holds that, in the first five cases, the General Court did, indeed, make legal errors. Therefore, the “exclusivity rebates” that Intel granted to Dell, HP, NEC and Lenovo) would mean that it was necessary to consider all the circumstances in an effort to establish whether there was an abuse of dominant position. In this case, it is not a separate and unique category of rebates so therefore examine their anticompetitive capability. Moreover, the General Court failed to establish that the rebates and payments offered by Intel were likely to have had the effect of removing any competition.
As for the question of an infringement being committed in 2006 and 2007, the General Court should not have considered it sufficient to make a global assessment of the part of the market which was foreclosed on average during the period running from 2002 to 2007. On that basis, it considered it irrelevant that the market coverage was considerably smaller during the years 2006 and 2007.
Qualifying certain rebate practices as “exclusivity rebates” appears erroneous. Wahl considers that HP and Lenovo, Intel’s customers, were able to obtain significant quantities of the disputed processors from a single serious competitor, AMD.
There is no doubt that the Commission should have recorded a meeting it had with an executive of Dell as part of the investigation. According to the Advocate General, European rules are quite clear on the subject. He believes that providing an internal note relating this meeting is insufficient.
With regard to the Commission’s powers to take into account Intel’s practices in China with Lenovo, the General Court should have assessed whether the anti-competitive effects resulting from these agreements were “immediate, substantial and foreseeable” in the European Economic Area (EEA), which it did not do.
Wahl ultimately ruled against Intel’s lawyers on the subject of the last argument put forward. It is not the guidelines that define the limitations to the Commission’s discretion but the legislation applicable. Therefore the fine imposed remains within the limit of this legislation and Intel can therefore not claim the non-retroactivity principle to oppose the fine that has been set.
Finally, it should be noted that Intel had not claimed any legal error to contest the amount of the fine imposed. According to Wahl, it could have done. The Advocate General considers that the fact that the fine imposed was record-breaking at the time does not in itself make it disproportionate. Intel should have pointed to a legal error on the part of the General Court which would have permitted the Court to assess the proportionality of the fine. (Original version in French by Jan Kordys)