Cheap as Chips: Intel receives record fine
In May the European Commission imposed the first €1billion fine for antitrust breaches. Microchip manufacturer Intel was fined for excluding competitors from the market and, in particular, for (i) granting rebates in exchange for exclusivity, (ii) making direct payments to retailers for stocking only computers containing Intel chips, and (iii) making direct payments to manufacturers to halt or delay the launch of specific products containing competitors' chips.
The Commission viewed the conduct as particularly grave which no doubt contributed to the level of the fine, but the decision is important for any company having a dominant position as it reaffirms the limits to such companies' pricing policies. In particular, dominant companies need to be careful with their rebate structure especially if they can be seen as loyalty enhancing rather than volume related. (For a fuller analysis of the decision please click on the following article: record fine for anticompetitive conduct as intel cashes in its chips).
EC Commission pushes private actions
The European Commission is continuing its push to make it easier for companies suspected of engaging in antitrust violations to be sued in national courts. The Commission is currently in the process of preparing a directive that will harmonise the right of action for damages across the European Union. It also seeks to introduce a system of collective actions that would allow large numbers of claimants to group together or indeed for designated bodies to raise actions on behalf of such claimants. It is expected that a draft directive will be published towards the end of the year followed by a public consultation in 2010.
Why it is not always good to talk: Dutch mobile phone operators are told to hang up
In a judgement on 4 June, the European Court has signalled once again the need for extreme caution when engaging in discussions with competitors. In this case, Dutch mobile phone operators had a one-off meeting in which they discussed commissions to be paid to dealers.The European Court confirmed a central principle of competition law that market players must determine independently their market conduct and that applies even where there is (potentially) no direct impact on the prices paid by end-consumers. Given the presumption that meeting participants will factor information discussed into their market behaviour (even where a company does not actively participate in the discussions), it is crucial for companies in, for example, trade forums and other industry gatherings to ensure that discussions do not stray into commercially sensitive areas or otherwise to publicly remove themselves from any such discussions.