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INTEL – Fined

In May Intel was fined 1bn Euros for abuse of a dominant position regarding rebate payments, contrary to Article 82 of the Treaty of Rome, in a decision which should make other dominant companies take note.

Paul Hawkes a partner in Atteys said:

“Intel had 70% of the market for x86 CPUs so it was “dominant”. It gave incentives to ensure its products were bought, which breached the law and led to these huge fines. Intel engaged in two illegal practices. It gave hidden rebates to computer manufacturers on condition that they bought their x86 CPUs from Intel. Intel also made direct payments to a major retailer on condition it stock only computers with Intel x86 CPUs. The Commission said that “Such rebates and payments effectively prevented customers - and ultimately consumers - from choosing alternative products”.

“Second, Intel made direct payments to 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. The Commission found that these practices constituted abuses of Intel’s dominant position on the x86 CPU market that harmed consumers throughout the EEA. By undermining its competitors’ ability to compete on the merits of their products, Intel’s actions undermined competition and innovation.”

If you are the victim of abusive conduct such as this or are a company worried about whether you might be at risk of similar fines, contact us for further advice. Call Paul Hawkes on 01302 340400 
 

Notes

1. The world market for x86 CPUs is currently worth approximately €22 billion with Europe accounting for approximately 30% of that. The computer manufacturers concerned by Intel's conduct in the Commission’s decision are: Acer, Dell, HP, Lenovo and NEC. The retailer concerned is Media Saturn Holding, owner of the MediaMarkt chain.

2. Those who suffered loss through the operation of the arrangements can now seek damages which will be separate from any fines. This will be similar to the damages claim brought by the victim of a cartel in the Arkin v Borchard Lines case which was the first such action for damages to reach an English court for a full trial. Since Arkin a number of victims have successfully obtained damages such as those who paid more for football shirts than they would have done in a free market.
 

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