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Intel has been handed a lifeline in its fight to avoid a €1bn fine from the European Commission after an adviser to Europe’s top court found fault in the case made by antitrust regulators.
Laila Medina, an advocate-general for the European Court of Justice, said on Wednesday that the commission had miscalculated the damage to competitors arising from the US chipmaker’s practice of offering rebates to customers.
Her findings follow an appeal from the commission, the EU’s executive body, over a 2022 decision from the European Court of Justice to quash a €1.06bn fine on Intel as part of a long-running case against the Silicon Valley company.
Medina said the problem lay in the commission’s so-called “as-efficient competitor” test, which is intended to establish whether the company was offering unfair pricing compared with rivals with comparable costs.
Miranda Cole, partner at Norton Rose Fulbright law firm in Brussels, said the opinion could have implications for the application of the widely used AEC test in the future.
“This case is being closely watched, given its potentially broad impact on pricing practices — rebates and beyond,” Cole said.
“While AG Medina’s opinion today is not the end of this matter, it will add to the ongoing debate about the appropriate test for identifying abusive rebates, and the commission’s discretion to not apply the AEC test,” she added.
Intel said it was “pleased” with the opinion.
The ECJ usually follows the advocate-general’s recommendations, which are non-binding but often end up influencing a final judgment.
The original EU fine dates back to 2009, after the commission concluded that Intel had abused its dominant position by giving hidden rebates to computer manufacturers on condition that they bought all, or almost all, their chips from it.
Intel had also paid manufacturers to halt or delay the launch of products with competitors’ chips and limited their routes to market, a practice known as “naked restrictions”.
The court judgment in 2022 upheld this part of the commission’s case and in September Brussels reimposed a fine of €376mn over the practice.
Intel is nevertheless investing heavily in the EU. It has pledged €30bn to boost chip manufacturing there. Along with a giant factory in Germany, attracting about €10bn in subsidies, there are manufacturing and research facilities in France, Ireland, Italy, Poland, Belgium and Spain.
The decade-long investment plan could eventually cost €80bn, subject to demand and the availability of future subsidies.
The commission declined to comment on an ongoing case. Intel has yet to respond to a request to comment.
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