In 2009, the European Commission (EC) found that Intel had abused its dominant position on the worldwide market for x86 CPUs (computer chips) by implementing a strategy aimed at foreclosing from the market its only serious competitor, AMD. Specifically, Intel had granted rebates to certain manufacturers and one retailer, conditional on the use of x86 CPUs, and had made direct payments (which the EC called “naked restrictions”) to manufacturers in order to halt, delay or limit the launch of specific products incorporating chips from AMD.
The EC imposed a fine on Intel of €1.06 billion, which is the highest fine ever imposed by the EC on a single company for an infringement of the competition rules.
On 12 June 2014, the General Court of the EU (the EU’s second highest court) upheld this EC decision in full. According to the court, the conditional rebates were exclusivity rebates, and exclusivity rebates granted by a dominant company are, by their very nature, capable of restricting competition and foreclosing competitors from the market and therefore are abusive. Concerning the direct payments, a dominant company’s only interest in preventing in a targeted manner the marketing of products equipped with a product of a specific competitor (here, AMD) must be to harm that competitor.
This is an important judgment for dominant (or potentially dominant) companies active in the EU, as well as their customers, suppliers and competitors. Third parties such as customers can use the principles set out in this case to argue that the business practices of a dominant company are illegal, and also to sue for damages.
