The Intel case, one of the most relevant procedures in the recent history of competition policy in Europe, has finally been resolved by the General Court. The investigation dates back to the early 2000s and led to a fine in 2009 in the amount of 1.06 billion euros, the largest amount ever imposed.
The sanction stemmed from an investigation into exclusionary conduct reported by AMD. According to the European Commission, Intel held a dominant position in the market for x86-type central processing units (CPUs) and would have incurred in the granting of conditional rebates to manufacturers, in exchange for them acquiring all of their supply from Intel. of CPUs. Also, Intel would have paid some computer manufacturers to stop or delay the launch of products made with CPU units from their competitors. For the European Commission, the conduct was illegal per se and therefore it was unnecessary to demonstrate the existence of anti-competitive effects.
The General Court, at first, ratified the decision of the European Commission. However, in 2017 the European Court of Justice ruled that the matter should be analyzed again by the General Court, in order to analyze in depth Intel’s defense approaches, particularly regarding the ability of reimbursements to restrict competition. The European Court of Justice established the need to apply an analysis based on effects and on the equally efficient competitor principle, as well as to analyze the percentage of the market covered by discounts and their duration.
Five years later, the General Court, following the principles established by the European Court of Justice, concluded that the European Commission’s analysis was incomplete and did not meet the legal requirement to demonstrate that the reimbursements were capable of having anti-competitive effects. The decision of the General Court means that the European Commission must return the amount paid from the fine, plus the interest generated, according to the rate established by the European Central Bank for its main refinancing operations, plus three and a half points.
The decision of the General Court is relevant because it gives prominence to the principle of presumption of innocence. Although the European Commission has maintained that the facts analyzed can only be explained by anti-competitive behavior, if the investigated company presents another reasonable explanation for the behavior, the presumption of the authority must be considered unsubstantiated. In addition, if the European Commission’s evidence in principle appears to show a violation of the law, companies must be able to show that such evidence lacks sufficient probative value. In short, the benefit of the doubt is in favor of the investigated company.
The economic competition community knew perfectly well, for several years, that the case was pinned down, and that it was a matter of time before a decision was made by the European appellate bodies such as the one that occurred.
The case reflects several aspects. The first, which is a fact also known to the competition community, is that European authorities apply less robust analytical standards than their US counterparts. The second is that the presumptions per se will be subject to greater scrutiny, not only in cases of abuse of a dominant position, but also in cases of collusion, in which it is not clear a priori a situation affecting the supply in the market. Finally, the problem of the excessive duration of investigation procedures must be resolved, since it is not useful to resolve cases 20 years after they have been initiated. After all, as the lawyers say, justice that is not expeditious is not justice.
*Managing Partner of Ockham Economic Consulting, specialized in economic competition and regulation and university professor.
@javiernunezmel
Consultant
Competition and Markets
Consultant in Economic Competition and Regulation, he is also a university professor.