Tomorrow’s landmark EU ruling on allegations of antitrust violations at Intel will have a far-reaching impact beyond the chipmaker. Europe’s top court will rule on whether or not the US company offered illegal rebates to gain an unfair advantage over its rivals. But other major tech firms will be keeping a close eye on the judgement as it unfolds.
The significance of the ruling is likely to set a precedent that could impact on other ongoing antitrust cases involving technology firms, namely Google and Qualcomm. The ruling by the Luxembourg-based Court of Justice of the European Union will also provide more clarity on whether rebates are anti-competitive by nature or whether enforcers need to prove the anti-competitive effect.
The European Commission in a 2009 decision said that Intel tried to thwart rival Advanced Micro Devices by giving rebates to PC makers Dell [DI.UL], Hewlett Packard, NEC and Lenovo for buying most of their computer chips from the company. It handed down a 1.06 billion euro ($1.3 billion) fine, however last year an ECJ court adviser backed Intel’s arguments. A ruling in Intel’s favour could lead to a review of other cases.
“A loss in such a high-profile case would be embarrassing (for the regulator),” said Andrew Ward, a partner at Madrid-based law firm Cuatrecasas. “Losing against Intel would clearly be a blow to the Commission and a confidence boost for Google, since on the face of it the theory of harm is much more established in the Intel case.”
Qualcomm faces similar charges of using anticompetitive methods by making illegal payments to squeeze out British software maker Icera. Meanwhile, Google is being investigated over its Android smartphone operating system and online search advertising.