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Intel Wants Refund Over EU’s Overturned AMD Fine

Intel Anti-Trust Refund Request
(Image credit: Shutterstock)

After overturning a $1.2 billion (~€1.06b) antitrust fine imposed on it by the European Commission (EC) this January, Intel has now filed with the EU General Court for compensation. The Santa Clara-based company, which achieved $20 billion in revenues last year, is claiming almost half of the original fine, to the tune of $623.5 million (€593m) in interest charges accrued for the duration of the litigation.

The fine, originally imposed in 2009, revolved around accusations of Intel blocking rival chipmaker AMD from accessing the market by giving substantial rebates to Dell, HP, and Lenovo if they sourced at least 95% of their chips from Intel.

Intel is filing for “payment of compensation and consequential interest for the damage sustained because of the European Commissions refusal to pay Intel default interest", as submitted on Monday to the EC. According to the company, it is owed the default interest rates applied throughout the length of the legal battle since the original, 2009 ruling.

Intel's own math on the matter is based on an analysis of the European Central Bank’s refinancing rate, set at 1.25 percent in 2009, with an increase of 3.5 percent points in the 13 years since. Intel is also claiming interest on any late reimbursement of the original fine.

The 2009 decision followed a five year investigation diving deep into Intel's alleged anti-competitive practices. AMD filed complaints on Intel's alleged anticompetitive behavior as far as 2000, and once again in 2003, prompting the official investigation.

"The evidence gathered by the commission led to the conclusion that Intel's conditional rebates and payments induced the loyalty of key OEMs and of a major retailer, the effects of which were complementary in that they significantly diminished competitors' ability to compete on the merits of their x86 CPUs," the EC wrote in the 2009 ruling. "Intel's anticompetitive conduct thereby resulted in a reduction of consumer choice and in lower incentives to innovate."

According to the ruling, the EC had found sufficient evidence to sustain the allegations as occurring between October 2002 and December 2007. Several moments mark the 13-year lag between the original and final rulings, from a first appeal to the General Court in 2012 (which it rejected in 2014), Intel then brought the issue to the attention of the European Court of Justice, which found enough matter to re-submit the decision toward the General Court in 2017.

According to court documentation, "In its analysis of whether the rebates at issue were capable of restricting competition, the General Court wrongly failed to take into consideration Intel's line of argument seeking to expose alleged errors committed by the Commission in the AEC [As-Efficient Competitor] test."

Intel's AEC argument essentially held that the court failed to prove that AMD was as efficient a competitor as Intel. It logically results from this that Intel's practices couldn't be anti-competitive, because neither AMD nor its products provided adequate competition from the beginning. Thus, its offering of rebates aimed only to provide better deals to its most significant clients, which would choose Intel's technologically superior products in either case. Interestingly, AMD's products throughout this time-frame included the famed Athlon 64 4000+ and FX-55 CPUs.

Intel's argument, and the subsequent investigation on court and evidence-gathering proceedings, led to the decision's eventual overturn as of January 2022. In an email statement provided to The Register, an Intel spokesperson said that, "We [Intel] welcome today's ruling by the General Court as we have always believed that our actions regarding rebates were lawful and did not harm competition," adding that, "The semiconductor industry has never been more competitive than it is today and we look forward to continuing to invest and grow in Europe."

Once a hallmark case in the EC's fight against anti-competitive practices, the most recent overturn stated that the Commission’s original analysis was incomplete, and said it had failed to establish that “[the] rebates at issue were capable of having, or were likely to have, anticompetitive effects.”

While one might hope that 13 years and a series of appeals would be enough to settle the matter permanently, the battle is still ongoing. Just this April, a spokesperson for the EC confirmed to The Register that the European Commission would appeal (opens in new tab) the court’s decision to overturn the fine - an appeal which is still ongoing. Perhaps the legal battle will still end within our lifetimes.

Francisco Pires is a freelance news writer for Tom's Hardware with a soft side for quantum computing.

  • -Fran-
    Disgusting.

    Regards.
    Reply
  • KananX
    “According to court documentation, "In its analysis of whether the rebates at issue were capable of restricting competition, the General Court wrongly failed to take into consideration Intel's line of argument seeking to expose alleged errors committed by the Commission in the AEC test."”

    This is absolute nonsense from Intel again. It was in fact anti-competitive, anti-consumer and anti-technology behavior and everyone knows this. I hope the appeal will succeed and intel is forced to pay even more than before. Let there be no doubt about it, this wasn’t lawful by Intel in any way, it’s corruption in its purest form.
    Reply
  • Brian D Smith
    In general, companies NEED to hold the EU's feet to the first...they are a little too quick to 'mandate' things for global companies.
    Reply
  • punkncat
    I, for one, applaud Intel in not only expecting their funds back, but also with accrued interest. Courts all LOVE to hit you with this fee and that fee, and interest, and late payment penalties. Bust 'em right in the chops, Intel!
    Reply
  • waltc3
    Intel's $1B payment to AMD in the US antitrust settlement with Intel will not be refunded, of course...;) The great thing about that was that the money went to AMD--not to any government agency. But in the EU, the lawyers get huge commissions and the government gets the rest. I hope Intel makes them cough it up before the EU dreams up another excuse to keep it--which might easily be done. I am totally against government fines--money paid to injured parties, though, is a different matter altogether as it happened in the US AMD vs. Intel antitrust suit, which AMD and Intel settled with a $1B check written to AMD, as I recall (Must be nice to be able to write a check like that!...;))
    Reply
  • KananX
    Brian D Smith said:
    In general, companies NEED to hold the EU's feet to the first...they are a little too quick to 'mandate' things for global companies.
    In the contrary, EU and other such institutions have to hold companies like Intel to higher standards to prevent excess e waste, excess power consumption and anti competitive etc behavior. Intel is only interested in making money and therefore can not be trusted, same as other companies like Apple.
    Reply
  • ddcservices
    punkncat said:
    I, for one, applaud Intel in not only expecting their funds back, but also with accrued interest. Courts all LOVE to hit you with this fee and that fee, and interest, and late payment penalties. Bust 'em right in the chops, Intel!
    You forget that what Intel was doing was very clearly a case of anti-competitive behavior. You can give rebates/credits for VOLUME, but you can't pay money to push companies not to sell products of competitors, or to limit their sales of competing products, since that is the very definition of anti-competitive behavior.
    Reply
  • JarredWaltonGPU
    KananX said:
    “According to court documentation, "In its analysis of whether the rebates at issue were capable of restricting competition, the General Court wrongly failed to take into consideration Intel's line of argument seeking to expose alleged errors committed by the Commission in the AEC test."”

    This is absolute nonsense from Intel again. It was in fact anti-competitive, anti-consumer and anti-technology behavior and everyone knows this. I hope the appeal will succeed and intel is forced to pay even more than before. Let there be no doubt about it, this wasn’t lawful by Intel in any way, it’s corruption in its purest form.
    If we were talking about the Bulldozer ("heavy equipment") era of AMD CPUs, I think Intel's argument would be entirely valid. However, AMD's socket 754 and socket 939 Athlon and Opteron CPUs in the 2002~2006 era were generally superior than anything Intel had at the time. I suspect this whole process will continue for at least another decade, with the real winners being the lawyers. :\
    Reply
  • punkncat
    ddcservices said:
    You forget that what Intel was doing was very clearly a case of anti-competitive behavior. You can give rebates/credits for VOLUME, but you can't pay money to push companies not to sell products of competitors, or to limit their sales of competing products, since that is the very definition of anti-competitive behavior.

    Apparently, someone with more details and facts thought otherwise in order for this particular case/situation to be overturned. I am not saying it 'didn't' happen, or that someone didn't maintain the proper integrity (etc.) for certain facets to be admissible to the court and so on...but, since it did get overturned Intel is fully within their rights to expect proper compensation in regard to the repayment this many years later.
    Reply
  • -Fran-
    JarredWaltonGPU said:
    If we were talking about the Bulldozer ("heavy equipment") era of AMD CPUs, I think Intel's argument would be entirely valid. However, AMD's socket 754 and socket 939 Athlon and Opteron CPUs in the 2002~2006 era were generally superior than anything Intel had at the time. I suspect this whole process will continue for at least another decade, with the real winners being the lawyers. :\
    It's about setting a precedent for courts. Which is why I'm mad AMD decided to settle instead of going all the way. It basically told the courts of law Intel didn't need to admit to any wrong-doing when it is a textbook monopoly move: price your competitors out.

    Also, something interesting. Otellini died right after he stepped down and he's the only one that could even prove any wrong doing from Intel when these calls were made inside the board. He died of a heart attack, supposedly. I've always wondered if he knew too much and he became a liability for Intel, haha. Tinfoil theories aside, when you're talking about the levels of money Intel moves, killing is completely on the table. I mean, "you're not trying if you're not cheating", right? That toxic saying comes to bite everyone in the back, all the time. I just wish Otellini got his well-deserved karma payback and nothing else.

    Other than that, I hope the EU goes ahead with the appeal and slaps Intel and creates a precedent for courts. Pricing out your competitors hurts the free market. How can people not understand that?

    Regards.
    Reply