Intel To EU: Antitrust Investigation FAIL

Intel announced it intended to appeal the EU's decision to slap it with a $1.45 billion fine; the text of the company's request for annulment is now available in the Official Journal of the European Union. The Santa Clara-based company's request is best understood as an attempt to throw mud on the wall and see if anything sticks—Intel goes after the decision from all angles.

In its petition, Intel claims the following:
  • The conditional discounts Intel offered its partners were not proven to have affected competition.

  • The Directorate General for Competition (DG-COMP) did not conduct analyze whether Intel's actions had a material effect on consumers, and

  • The EC failed to consider whether or not Intel's rebate program affected EU citizens or were implemented in EU territory.
That's scarcely the end of the list; Intel levies a number of separate charges against the EC as well. Specifically, the company alleges that the EC failed to demonstrate a causal link between conditional discounts and the sale of AMD products, and conducted no analysis on the real-world impact Intel's discounts had on customers. Intel also alleges that its ability to defend or exculpate itself entirely was impaired by the EC's decision not to allow Intel access to certain documents Intel thought it desired. The $1.45 billion fine is contested on the grounds that because no causal link could be proven between Intel's discounts, AMD's market share, and alleged consumer harm, the fee is "manifestly disproportionate." It's a bit odd that that Intel used the words "causal link," as such a condition would require that 100 percent of the alleged impact on AMD was caused by "conditional
discounts and the decisions of Intel’s customers not to purchase from that competitor.

Because causality is extremely difficult to prove in anything but the simplest scenarios, courts rely on correlative evidence—hence the phrase "reasonable doubt."


Not pictured: The US judiciary system

Some of the complaints Intel is leveling, such as access to documents held by the other party, are complaints over differences in the judicial systems of the US and the EU. One of those differences is the fact that in the European Union, the plaintiff does not have to prove that customers were in some way harmed by the actions of the defendant. It's enough to establish that the defendant's actions, even if they didn't directly affect citizens, blocked or reduced the plaintiff's access to the market.

One of the EU's benchmark tests to determine the existence or absence of anti-competitive behavior is an "as efficient competitor" or AES test. The EU recently updated its own guidance on exclusionary abuses, the PowerPoint is over here. An AES test examines market conditions, prices, and changes against a so-called "efficient competitor." The point of the analysis is to determine whether or not a company's situation (AMD, in this case) is a result of its own inefficiency, or due to the actions of a larger, more powerful competitor. The EU officials who performed that test obviously felt Intel was twisting the market to favor its own goals.

Intel's argument attacks the validity of DG-COMP's AES test from several angles. First, Intel claims that the EC "fails to prove that Intel’s rebate arrangements were conditional upon its customers purchasing all or almost all of their x86 CPU requirements from Intel." While Intel acknowledges that an AES test was conducted, it also claims that the EC "commits numerous errors in the analysis and assessment of the evidence relating to the application of that test." Put more concisely, Intel is asking for an annulment of the fine because the DG-COMP's office is run by a bunch of blithering idiots.

Regardless of whether Intel wins or loses its appeal there's a certain irony in the fact that AMD won't see a cent of the $1.45 billion fine. The one trial that could award damages begins this spring. If you're interested in perusing the text of Intel's claim, it's over here.
Via:  Yahoo
Comments
ClemSnide 5 years ago

>Not pictured: The US judiciary system

Giggle, snort. I wonder, though, if the fine is upheld, will Intel merely cease sales to Europe (which may cause a minor stir) or grumble, dig into petty cash, and come up with the bribe?

My own compromise solution would be to offer solid gold "Intel Inside" case badges; but you know me, I'm way ahead of my time.

Joel H 5 years ago

Clem,

Oh, they'd pay it. That's basically what--between 1/5 and 1/7 their quarterly profits? That's the oddity--the biggest penalties the EU can slap, and companies shrug it off.

I think the negative PR is probably worth more than the cash.

3vi1 5 years ago

>> Regardless of whether Intel wins or loses its appeal there's a certain irony in the fact that AMD won't see a cent of the $1.45 billion fine.

How so? The fine is to make abusive business practices less attractive to Intel, not to be a special award to just a single one of their competitors.

If Intel were to threaten to take their ball and pull out of Europe, look for AMD stock to shoot through the roof. So, that'll never happen.

ClemSnide 5 years ago

Yeah, I know, a check will be written. <old joke>(This being Intel, it's likely to be for 1.44999999 billion.)</old joke>

I just wanted to momentarily imagine the chaos that such an announcement would cause! Sigh.

realneil 5 years ago

They have been getting away with not playing nice for a long time.

They'll never change, they'll just cover the bases better.

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