EU court overturns $1.2 billion antitrust fine against Intel as company posts record fourth-quarter earnings
European Commission penalised Intel in 2009 on the basis that the firm had unfairly tried to block rival Advanced Micro Devices
The Luxembourg-based General Court, Europe's second-top court, has overturned a $1.2 billion (about £0.90 billion) antitrust fine that was levied against the US chipmaker Intel in 2009.
The European Commission, the executive arm of the EU, penalised Intel on the basis that the firm had unfairly tried to block rival Advanced Micro Devices (AMD) by offering rebates to computer makers Hewlett-Packard Co, Dell, Lenovo and NEC for buying most of their chips from Intel.
The EC had claimed that the Intel abused its dominance in the worldwide market between 2002 and 2007, by implementing a strategy that aimed to exclude rivals from the market.
However, the General Court rejected the EC's claims, stating that the regulator didn't conduct a proper analysis of the rebate scheme and made critical errors when finding against Intel.
"The (European) Commission's analysis is incomplete and does not make it possible to establish to the requisite legal standard that the rebates at issue were capable of having, or likely to have, anticompetitive effects," judges said in their decision[pdf].
In 2014, the same court had upheld the Commission's decision; however, it was told by the Europe's highest court, EU Court of Justice, in 2017 to examine all of Intel's claims regarding a test to see if the company's rebates were capable of damaging competition.
Intel had argued that the General Court's 2017 decision failed to take into account the broader circumstances of the case.
An Intel spokeswoman said the company was reviewing the decision.
The European Commission said it would study the judgment and consider possible options.
The General Court's ruling came on the same day as the chip company posted record fourth-quarter earnings, ending 2021 on a high note.
Intel said its fourth-quarter sales were $20.5 billion (about £15.3 billion), up 3 per cent from the year-earlier period. The firm generated net income of $4.6 billion (about £3.45 billion), which was down 21 per cent year-over-year.
Revenue from Intel's data centre business increased 20 per cent to $7.3 billion (about £5.45 billion), a record high for that category.
The company expects $18.3 billion (about £13.7 billion) in adjusted sales in the first quarter of 2022, beating consensus analyst expectations of $17.62 billion (about £13.17 billion).
In recent years, Intel has lagged behind competitors in chip manufacturing following slip-ups, enabling rivals to gain market dominance in some semiconductor categories.
Pat Gelsinger, who became Intel CEO in 2021, has been trying to reverse the decline. In December, the Intel chief said that getting everything perfect and healthy again was a five-year assignment.
Speaking of global chip shortage, Mr. Gelsinger said on Wednesday that the situation was beginning to ease in certain areas, although it might last until 2024.
"It's still challenging," he said. "You're just going to see incremental improvements quarter by quarter."
Over the past year, Intel has also expanded its chip-making capabilities in different regions.
Last week, the company announced that it was investing $20 billion for two chip factories in Ohio that could eventually become the world's largest chip making complex.
In May last year, the firm announced a $3.5 billion investment in its existing chip fab in Rio Rancho, New Mexico, to develop its 'Foveros' chip-stacking technology.
Earlier in March, Gelsinger said that the company would invest about $20 billion (£14.6 billion) on two new fabs in Arizona as part of plans to make processors for other chipmakers based on their own designs.