Court orders Intel case review in EU antitrust blow

LUXEMBOURG/BRUSSELS (Reuters) - Europe’s top judges dealt a rare blow to European Union antitrust regulators on Wednesday by sending their case against U.S. chipmaker Intel Corp (INTC.O) back to court for an appeal.

In a move that may have ramifications for EU cases against Qualcomm (QCOM.O) and Google (GOOGL.O), the EU Court of Justice (ECJ) said a court which upheld a 1 billion euro ($1.3 billion) fine against Intel should re-examine the company’s appeal.

“The case is referred back to the General Court in order for it to examine the arguments put forward by Intel concerning the capacity of the rebates at issue to restrict competition,” the ECJ said in a statement.

The Commission handed down the fine in 2009, a record at the time, saying Intel had tried to block rival Advanced Micro Devices (AMD.O) by giving rebates to computer makers Dell [DI.UL], Hewlett-Packard Co (HPE.N), NEC (6701.T) and Lenovo (0992.HK) for buying most of their chips from Intel.

Regulators have generally frowned upon rebates, especially those offered by dominant companies, on the theory they are anti-competitive in nature. Companies say regulators must prove rebates have anti-competitive effects before sanctioning them.

“This is a setback for the Commission as it will be more closely scrutinized by the courts in the future. There is now a clear obligation to look at effects-based arguments,” said Foad Hoseinian at law firm Freshfields.

“Companies will be more confident when they go to the Commission and more corporations will have the appetite to take the Commission to court on effects-based arguments,” he said.

The Commission said it would study the judgment carefully and that it was up to the General Court to review its decision.

Intel said: “We have always believed that our actions were lawful and did not harm competition.”

The decade-long case could drag on for several more years as Intel could appeal the General Court’s judgment following the re-examination, if it goes against the company.

The ruling raises the bar for regulators when it comes to proving wrongdoing, said Rein Wesseling, a partner at law firm Stibbe.

“It forces the Commission to be as economic in its approach in other cases as it did in Intel. This is encouraging for Qualcomm and Google,” he said.

Google, which was hit with a 2.42 billion euro fine in June for favouring its own shopping service, is also under fire over its Android smartphone operating system and online search advertising. Google has denied any wrongdoing.

U.S. chipmaker Qualcomm faces EU charges of using anti-competitive methods to squeeze out British phone software maker Icera and of making illegal payments to a major customer for exclusively using its chipsets since 2011.

Qualcomm has said complaints by rivals which triggered the EU case have no merit.

($1 = 0.8386 euros)