The Intel Corporation (NASDAQ:INTC) long running clash with European antitrust authorities could change how other companies address antitrust disputes in the future. The case has dragged for more than six years, all but making the $1.3 billion fine handed down in 2009 appear like a drop in the ocean.
Intel EU Antitrust Case
Observers fear that companies facing standoffs with regulators in Europe will resort to dragging proceedings rather than agreeing to settle cases. The European Commission has not lost a single case in more than 20 years, but that could soon change in the case of Intel’s antitrust case.
The European Court of Justice is set to rule on whether the giant chip maker offered illegal rebates to push its competitors out of business. The commission alleges that the company impeded competition in the business by giving computer makers rebates between 2002 and 2005 on the condition that they use 95% of its chips.
Antitrust authorities also claim that tech giant imposed restrictive conditions on the remaining 5% chips supplied by Advanced Micro Devices, Inc. (NASDAQ:AMD), which was its biggest rival in the sale of chips for PCs. Some of the computers makers that were asked not to use AMD’s chips include Acer, Dell, and HP.
Europe Court of Justice Ruling
The ruling of the case could have a ripple effect on a number of companies that have also come under scrutiny over similar practices that authorities claim impede competition. QUALCOMM, Inc. (NASDAQ:QCOM) is already under investigation over claims it paid Apple Inc. (NASDAQ:AAPL) so that only its chips can be used in iOS products. Alphabet Inc (NASDAQ:GOOGL) is also under probe for inducing phone makers to use its Android operating system.
The ruling in Europe is closely being watched as it will shed more clarity on whether the use of rebates amounts to anti-competitive behavior. Intel has long insisted that its ‘Market Development Funds’ are volume discounts, typical with industry practices.
Losing against Intel would be a big blow flow for the European Commission as the same will only boost confidence on companies fighting similar allegations.
Intel was up by 0.06% in Friday’s trading session to end the week at $35.09 a share.
