Competition Policy Newsletter

Commission finds abuse of dominance in the Intel case

ANTITRUST
Brice Allibert, Gabor Bartha, Barbara Bösze, Corneliu Hödlmayr, Damian Kaminski, Marieke Scholz (1)

1. Introduction1 2007 SO. Intel failed to reply to the SSO by the ex-
tended deadline of 17 October 2008, but submitted
On 13 May 2009, the European Commission con- belated written submissions relating to the SSO on
cluded its Intel investigation by way of a formal De- 5 February 2009. This issue is discussed in section
cision. The Commission found that Intel had abused 5 below.
its dominant position in x86 Central Processing
Units (CPUs) by engaging in two types of practices.
First, Intel gave rebates to computer manufacturers
3. Intel’s Dominance
(Original Equipment Manufacturers or OEMs) on The products concerned by the Decision are Cen-
condition that they bought all, or almost all of their tral Processing Units (CPUs) of the x86 architecture.
x86 CPUs from Intel, at least in a certain segment. The CPU is a key component of any computer, both
Similarly, Intel also made direct payments to a major in terms of overall performance and cost of the sys-
retailer on condition it stock only computers with tem. It is often referred to as a computer’s “brain”.
Intel x86 CPUs. Second, Intel made direct payments The manufacturing process of CPUs requires high-
to OEMs to halt or delay the launch of specific tech and expensive facilities. CPUs used in comput-
products containing a competitor’s x86 CPUs and to ers can be sub-divided into two categories: CPUs of
limit the sales channels available to these products. the x86 architecture and CPUs of a non-x86 archi-
tecture. The x86 architecture is a standard designed
2. Timeline by Intel for its CPUs. It can run both the Windows
and Linux operating systems. Windows is primarily
The case originated with a complaint of 18 October linked to the x86 instruction set. Prior to 2000, there
2000 from Advanced Micro Devices (AMD). This were several manufacturers of x86 CPUs. However,
complaint was supplemented with new allegations most of these manufacturers have exited the market.
in November 2003. In May 2004, the Commission Since 2000, Intel and AMD are essentially the only
launched a round of investigations relating to ele- two companies still manufacturing x86 CPUs.
ments in the supplementary complaint. On 17 July
2006, AMD filed a complaint to the German Na- Following a market enquiry to both customers and
tional Competition Authority claiming that Intel had suppliers of CPUs in the market, the Decision con-
engaged in exclusionary marketing arrangements and cluded that on the basis of demand and supply side
other practices with Media Saturn Holding (MSH), substitutability factors, the relevant product market
a European retailer of microelectronic devices. In was not wider than the market for x86 CPUs for
agreement with the German National Competition computers. The Decision left open the question
Authority, this complaint was transferred to the whether the relevant product market definition could
Commission. be subdivided between x86 CPUs for desktop com-
puters, notebook computers and servers since given
On 26 July 2007, the Commission issued a State- Intel’s market shares under either definition, there is
ment of Objections (SO) concerning Intel’s conduct no difference to the conclusion on dominance. The
vis-à-vis major OEMs including Dell, HP, Acer and geographic market was found to be worldwide.
NEC. Intel replied to the 26 July 2007 SO on 8 Jan-
uary 2008, and an oral hearing was held on 11 and In the 10 year period considered in the Decision
12 March 2008. (1997-2007), Intel held consistently very high mar-
ket shares in excess of or around 70%, and more
On 17 July 2008, the Commission issued a supple- often in the region of or in excess of 80%. In ad-
mentary Statement of Objections (SSO) concerning dition, the Decision identified significant barriers to
Intel’s conduct vis-à-vis MSH (an electronics retail- entry and expansion in the x86 CPU market. These
er) and Lenovo (a major OEM). It also included new arise from the sunk investments in research and
evidence on the Intel conducts vis-à-vis some of the development, intellectual property and production
OEMs covered by the 26 July 2007 SO, which had facilities that are necessary to produce x86 CPUs.
been obtained by the Commission after the 26 July Intel’s strong (must-stock) brand status and the re-
sulting product differentiation also constitute a bar-
(1) The content of this article does not necessarily reflect the
official position of the European Commission. Responsi- rier to entry. The identified high barriers to entry
bility for the information and views expressed lies entirely and expansion are consistent with the observed
with the authors. market structure, where all of Intel’s competitors,

Number 3 — 2009 31
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except AMD, have exited the market or are left with was conclusive. This comprised evidence from con-
an insignificant share. On the basis of Intel’s market temporaneous documentation (e-mails and other
shares and the barriers to entry and expansion, the documents) from OEMs, MSH and Intel itself, as
Decision concluded that at least in the period cov- well as a number of company statements. Indeed, the
ered by the Decision (October 2002 to December Decision found that Intel had sought to conceal the
2007), Intel held a dominant position in the market. nature of its conditional arrangements. For example:

4. Abuse of a Dominant Position • The rebate arrangement with Dell was not sub-
ject to a written agreement but was concluded
orally at various meetings.
4.1. Conditional rebates
• There was a written agreement with HP but at
4.1.1. Nature and operation of the rebates Intel’s request, the relevant conditions remained
unwritten.
The Decision concluded that Intel awarded major
OEMs and one major retailer rebates/payments the • The written agreement with MSH contained a
level of which were conditioned on these OEMs provision that the deal was non-exclusive. How-
purchasing all or almost all of their CPU supply ever, the evidence demonstrates that this provi-
needs from Intel, at least in a certain segment. These sion was inserted at Intel’s request despite the fact
were as follows: that the arrangement was in reality exclusive.
– Intel rebates to Dell during the period from The contemporaneous evidence outlined in the De-
December 2002 to December 2005 the level cision as well as statements from OEMs and MSH
of which was conditioned on Dell purchasing outline how the various Intel conditions were an
exclusively Intel CPUs; important factor in their decisions not to partially
– Intel rebates to HP during the period from switch to or buy more x86 CPUs from AMD, some-
November 2002 to May 2005 the level of which thing which they had been actively considering in
was conditioned in particular on HP purchasing light of their evaluations of AMD’s product.
no less than 95% of its CPU needs for its busi- The Decision concluded that the conditional rebates
ness desktop segment from Intel (the remain- granted by Intel to the OEMs constitute fidelity re-
ing 5% that HP could purchase from AMD was bates which fulfil the conditions of the relevant case-
then subject to further restrictive conditions set law for their qualification as abusive. (3) With regard to
out below); Intel’s conditional payments to MSH, the Decision es-
– Intel rebates to NEC during the period from
October 2002 to November 2005 the level of (3) In this regard, the Court of Justice has consistently ruled
which was conditioned on NEC purchasing no that “an undertaking which is in a dominant position on a market
and ties purchasers - even if it does so at their request - by an obliga-
less than 80% of its CPU needs for its desktop tion or promise on their part to obtain all or most of their require-
and notebook segments from Intel; ments exclusively from the said undertaking abuses its dominant po-
sition within the meaning of article 82 EC, whether the obligation
– Intel rebates to Lenovo during 2007 the level of in question is stipulated without further qualification or whether it is
which was conditioned on Lenovo purchasing undertaken in consideration of the grant of a rebate. The same ap-
its CPU needs for its notebook segment exclu- plies if the said undertaking, without tying the purchasers by a formal
sively from Intel. obligation, applies, either under the terms of agreements concluded with
these purchasers or unilaterally, a system of fidelity rebates, that is to
– Intel payments to Media Saturn Holding say discounts conditional on the customer’s obtaining all or most of its
(MSH), Europe’s largest PC retailer, the level of requirements - whether the quantity of its purchases be large or small
- from the undertaking in a dominant position”. See Case 85/76
which was conditioned on MSH selling exclu- Hoffmann-La Roche v Commission [1979] ECR 461, paragraph
sively Intel-based PCs between October 2002 89-90. See also Case C-62/86 AKZO v Commission [1991]
and December 2007. (2) ECR I-3359, paragraph 149; Case T-65/89 BPB Industries and
British Gypsum v Commission [1993] ECR II-389, paragraphs
In each instance outlined above, Intel contested that 71 and 120; Case C-393/92 Municipality of Almelo and others
there was any conditionality in its arrangements with [1994] ECR I-1477, paragraph 44; Joined Cases T-24/93,
the OEMs in question and MSH. The Commission T-25/93, T-26/93 and T-28/93 Compagnie Maritime Belge and
carefully considered Intel’s arguments. However, the Others v Commission [1996] ECR II-1201, paragraphs 118-120
and 182 to 186; Case T-203/01 Michelin v Commission (Michelin
evidence which led the Commission to its findings II) [2003] ECR II-4071, paragraphs 56 and 241; and Case
T-219/99 British Airways v Commission [2003] ECR II-5917,
(2) Conditional payments to MSH were ongoing from October paragraph 244, confirmed on appeal in Case C-95/04 P Brit-
1997 to at least 12 February 2008. However, the Commis- ish Airways v Commission [2007] ECR I-2331, paragraphs 61
sion used its discretion not to pursue in the Decision Intel’s and 67. Case T-228/97 Irish Sugar v Commission [1999] ECR
conduct targeted only at MSH for the periods from Octo- II-2969, paragraph 221. See also Case C-202/07 P France
ber 1997 to September 2002 and after December 2007. Télécom v Commission not yet reported, paragraphs 107 to 113.

32 Number 3 — 2009
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tablishes that the economic mechanism of these pay- in order to compensate an OEM for the loss of the

ANTITRUST
ments is equivalent to that of the conditional rebates Intel rebate, an as efficient competitor has either to
to OEMs. The Decision therefore concludes that they exceed a realistic contestable share or to offer its
also fulfil the conditions of the relevant case-law for products below a viable measure of Intel’s cost, then
their qualification as abusive. On top of showing that it means that the rebate was capable of foreclosing
the conditions of the case-law for finding an abuse the as efficient competitor. This would deprive final
are fulfilled, the Decision also conducts an economic consumers of the choice between different products
analysis of the capability of the rebates to foreclose which the OEM would otherwise have chosen to of-
a competitor which would be as efficient as Intel (al- fer were it to make its decision solely on the basis of
beit not dominant) and outlines that Intel’s anticom- the relative merit of the products and unit prices of-
petitive conduct resulted in a significant reduction of fered by Intel and its competitors. The same kind of
consumer choice and in lower incentives to innovate. analysis has been conducted for the Intel payments
to MSH. The analysis of the capability of these pay-
4.1.2. As efficient competitor analysis ments to foreclose an as efficient competitor also
takes account of the fact that these payments are
In essence, the as efficient competitor test establishes made at another level of the supply chain (the retail
at what conditions a competitor which is ‘as efficient’ level), and that their effect is additional to that of
as Intel would have to offer CPUs in order to com- conditional rebates to OEMs.
pensate an OEM for the loss of Intel rebates. This
as efficient competitor analysis is a hypothetical exer- In each case, on the basis of contemporaneous evi-
cise in the sense that it analyses whether a competitor dence and company statements, the Decision found
which is as efficient as Intel but which seeks to offer that in order to compensate for the loss of Intel’s
a product that does not have as broad a sales base as conditional rebates to Dell, HP, NEC and Lenovo,
that of Intel is foreclosed from entering. This occurs an as efficient competitor would have had to price
if in order to compensate an OEM for the loss of its CPUs below Average Avoidable Cost. Similarly,
Intel rebate which results from a breach of the Intel the Decision found that, in order to compensate for
condition, the as efficient competitor would have to the loss of Intel’s conditional payments to MSH,
meet a higher share of its customers’ needs for CPUs an as efficient competitor would have had to offer
than is realistic, or would have to offer its CPUs be- payments which, alone or in complement to pay-
low a measure of viable cost. This can occur because ments necessary to offset conditional rebates at the
the Intel rebate is spread across the OEM’s entire level of OEMs, would have required it to price its
purchases from Intel, whereas the compensation for CPUs below Average Avoidable Cost. The Decision
the loss of rebate generally needs to be spread across concluded that Intel’s conditional rebates to OEMs
a significantly lower amount of purchases, namely the and conditional payments to MSH were capable of
amount of purchases that is ‘up for grabs’ in any given having or likely to have anticompetitive foreclosure
time period, and hence that an OEM can switch away effects since even an as efficient competitor would
from Intel. This means that it can be uneconomic for have been prevented from accessing the relevant
a competitor to compensate an OEM for the loss of sales of each of Intel’s trading partners.
Intel rebate (i.e. it has to offer its CPUs below cost),
even if it is as efficient as Intel, and even if its average It should be noted that the use of Average Avoid-
CPU price is lower than that of Intel. able Cost as the benchmark under which the as ef-
ficient competitor cannot trade in an economically
The analysis therefore takes into consideration three viable way is favourable to Intel. Indeed, in order
factors: the contestable share (the amount of a cus- to maintain a viable business over more than a very
tomer’s purchase requirements that can realistically short term, an as efficient competitor would have to
be switched to a new competitor in any given pe- be able to also recoup its fixed costs.
riod), a relevant time horizon (at most one year) and
a relevant measure of viable cost (Average Avoid-
able Cost). (4) If Intel’s rebate scheme means that 4.1.3. Strategic importance of main OEMs
The Decision also concluded that certain OEMs,
(4) Average Avoidable Cost is the average cost per unit which and in particular Dell and HP, are strategically more
a CPU manufacturer would not incur (in other words,
could avoid) if it did not produce a given number of CPUs. important than other OEMs in their ability to pro-
This includes cost items which are directly proportional to vide a CPU manufacturer access to the market. They
the number of CPUs produced (such as costs of certain can be distinguished from other OEMs on the basis
raw materials), but also other types of costs which, despite of three main criteria: (i) market share; (ii) strong
not being directly proportional to the number of CPUs presence in the more profitable part of the market;
produced, can be avoided if production decreases signifi-
cantly over a sufficient period of time. Intel’s own cost and (iii) ability to legitimise a new CPU in the mar-
measure is used so that the analysis applies to a hypotheti- ket. As a consequence, smaller OEMs are not able
cal competitor which is as efficient as Intel. to legitimise new CPUs in the same way as HP and

Number 3 — 2009 33
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Dell, in particular in the corporate segment, which is of its rebates: lower prices, scale economies, other
the most profitable. cost savings and production efficiencies and risk
sharing and marketing efficiencies. Moreover, Intel
4.1.4. Harm to competition and consumers claimed that any conditions attached to the rebates
were indispensable to attain these efficiencies and
Through a variety of rebates which were tailored for their impact on competition was minor since AMD
each OEM, including the most strategically impor- grew during the investigation period.
tant OEMs, Intel was able to limit consumer choice
and foreclose the access of competitors to the mar- It should first be noted that many of Intel’s argu-
ket. The Decision outlines evidence that consumers ments relating to objective justification do not in
attach value to the combination of the computer of fact relate to the conduct at stake in the Decision,
an individual OEM incorporating CPUs from dif- namely the conditions associated with Intel’s rebates,
ferent manufacturers. Intel’s practices therefore pre- but rather to rebates in general, which in themselves
vented combinations of a range of individual OEM are not problematic. In addition, there is a basic in-
brand computers incorporating innovative and consistency between Intel’s argument that it was re-
genuinely different AMD CPUs from coming to the sponding to competition from AMD and one of its
market, or at least in significant quantities. This ef- other core arguments, namely that AMD was failing
fect was exacerbated since generally, the decision of in the market not because of Intel’s practices, but
OEMs not to incorporate other x86 CPUs than In- because it was capacity constrained and did not offer
tel’s in their consumer products, and in particular in competitive products. In any case, Intel did not pro-
products to be sold in Europe, was also influenced vide any substantiation to demonstrate either that
by the payments made at retail level to MSH. In that it was responding to specific offers to respond to
regard, the exclusivity arrangement with MSH de- competition or that there would be any efficiencies
prived Intel’s competitors of the ability to use cer- of the type that it had claimed were associated with
tain distribution channels in the consumer segment. the relevant conditions (although it at the same time
This had an influence on the OEMs’ choice of their contended that there were no such conditions).
x86 CPU supplier for consumer products and limit-
ed the choice of consumers that wanted to purchase 4.1.6. Conclusion
their product from MSH.
In light of the analysis referred to in sections 4.1.1
As a result of Intel’s rebates and payments there- to 4.1.5 above, the Decision concluded that the con-
fore, end-customers were artificially prevented ditional rebates granted by Intel to Dell, HP, NEC
from choosing other products on the merits (price and Lenovo as well as the conditional payments
and quality of the respective x86 CPUs), since In- granted by Intel to MSH constituted an abuse of a
tel’s conduct prevented the competitors’ product dominant position. The duration of each abuse is
from being offered with certain individual OEMs that outlined for each respective conduct as referred
and with MSH. As such, Intel’s exclusionary prac- to in section 4.1.1 above.
tices had a direct and immediate negative impact
on those customers who would have had a wider
price and quality choice if they had also been of- 4.2. Naked restrictions
fered the product of their favourite OEM and/or
retailer with x86 CPUs from Intel’s competitors. As 4.2.1. Nature of the restrictions
a result of this dynamic, rival products did not reach The Decision also concluded that Intel awarded
final customers in the volumes that their quality and major OEMs payments which were conditioned on
price would have justified had competition been ex- these OEMs postponing or cancelling the launch of
clusively on the merits, which in itself resulted in AMD-based products and/or putting restrictions on
lower incentives to innovate. the distribution of AMD-based products. (5) These
were as follows:
4.1.5. Objective justification
– Between November 2002 and May 2005, Intel
Intel submitted two different sets of arguments in payments to HP were conditioned on HP direct-
order to attempt to justify its rebate schemes, name- ing its AMD-based business desktops to small
ly: (i) that by using a rebate, Intel only responded to an medium enterprise rather mainstream busi-
price competition from its rivals and thus met com- ness customers; precluding its channel partners
petition; and (ii) that the rebate system used vis-à- from stocking its AMD-based x86 CPU busi-
vis each individual OEM was necessary in order to ness desktops such that such desktops would
achieve important efficiencies that are pertinent to
the CPU industry. With respect to the latter, Intel ar- (5) As was the case for conditional rebates, Intel contested the
gued that there were 4 different types of efficiencies Commission’s findings. Once again however, these find-
that were attained by any exclusivity requirements ings were based on an extensive range of evidence.

34 Number 3 — 2009
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only be available to customers by ordering them tel did not raise any specific objective justifications

ANTITRUST
from HP; and delaying the launch of its AMD- or efficiency claims with respect to naked restric-
based x86 CPU business desktop in the EMEA tions and in any case, the Decision concluded that
region by six months; there was no link to any criterion which could po-
tentially be a legitimate objective justification.
– Intel payments to Acer were conditioned on
Acer postponing the launch of an AMD-based
4.2.3. Conclusion
notebook from September 2003 to January
2004; In light of the above, the Decision concluded that
Intel’s behaviour which made the payments to HP,
– Intel payments to Lenovo were conditioned on Acer and Lenovo subject to restrictive conditions
Lenovo postponing the launch of AMD-based concerning the commercialisation of AMD-based
notebooks to the end of 2006. computers constituted an abuse of a dominant posi-
The scope of these restrictions is more specific than tion. The duration of each abuse is that outlined for
that of the conditional rebates outlined in section each respective conduct as referred to above.
4.1 above. They are shorter in duration and focused
on a specific product or line of products or spe- 4.3. Single strategy
cific sales channels, whereas rebate arrangements
are longer in term and cover at least entire business The Decision established that each of the Intel
segments. conducts vis-à-vis the individual OEMs and vis-
à-vis MSH constitutes an abuse of Article 82, but
that these individual abuses are also part of a single
4.2.2. Harm to competition and consumers
strategy aimed at foreclosing AMD from the market
The practices have a common strand: they relate to for x86 CPUs. The individual abuses are therefore
payments by Intel in order for the OEM in ques- part of a single infringement of Article 82 of the
tion to delay, cancel or in some other way restrict EC Treaty. The Decision also outlines how Intel’s
the commercialisation of specific AMD-based practices must be seen in the context of the growing
products. (6) In each case, the OEM in question competitive threat represented by AMD. In this re-
was planning the introduction of a specific AMD- gard, there is significant contemporaneous evidence
based product. Such products either already existed from OEMs as well as company statements that
or preparations for their introduction to the market from 2001, AMD had improved its product offering
were well advanced. This was due to the fact that and represented a growing threat to Intel. Indeed,
there was consumer demand for such AMD-based this was recognised by Intel itself.
products. Intel’s conduct had a material effect on the
OEMs’ decision-making in that the OEMs delayed, 4.4. Intel’s general arguments
cancelled or otherwise restricted their commerciali-
sation of the AMD-based computers. Therefore, Intel’s main general argument throughout the case
AMD-based products for which there was a cus- was that it cannot have been Intel’s conduct which
tomer demand did not reach the market, or did not foreclosed AMD from the market, but rather that it
reach it at the time or in the way they would have was AMD’s own failings. Three preliminary remarks
in the absence of Intel’s conduct. As a result, cus- are in order here. First, abuse is an objective con-
tomers were deprived of a choice which they would cept, and the performance of rivals in the market
have otherwise had. Intel’s conducts therefore had a is not relevant for the application of Article 82 ac-
detrimental effect on competition on the merits. In- cording to the case-law. (7) Second, as regards the
as efficient competitor test referred to in section
(6) In Irish Sugar, the Court of First Instance concluded that 4.1.2 above, this examines the effect of conditional
it constituted an abuse when the dominant undertaking rebates on a hypothetical as efficient competitor.
agreed “in 1988 with one wholesaler and one retailer to swap com- Therefore, the conclusion of the analysis is whether
peting retail sugar products, i.e. Eurolux 1 kilogram packet sugar the rebates in question are capable of foreclosing
of Compagnie française de sucrerie, for its own product.” 6 (Case such a hypothetically as efficient competitor with-
T-228/97 Irish Sugar v Commission, para. 226). Through the
swap arrangement in question, the dominant firm pre- out reference to whether actual competitors are as
vented the competitor’s brand from being present on the efficient as the dominant company or not. Thirdly,
market since the retailers no longer had a stock of “Eu- Intel’s argument that AMD was foreclosed because
rolux” branded sugar and instead replaced those volumes of its own failings cannot be reconciled with the
with the sugar of the dominant undertaking. In the same fact that during the period under examination, Intel
vein, Intel’s conduct in the present instance prevented a
product of its competitor from coming to market (to the awarded significant payments to its key customers
advantage of its own products). The Decision also recalled
that in accordance with the case-law, a violation of Arti- (7) See for example Case T-219/99 British Airways, [2003]
cle 82 may also result from the anticompetitive object of ECR II-5917, paragraph 293, and Case T-203/01 Michelin
practices pursued by a dominant undertaking. II, [2003] ECR II-4071, paragraph 239.

Number 3 — 2009 35
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which, in Intel’s words, were in order to “meet com- gation between Intel and AMD in the state of Dela-
petition” from AMD. If Intel claims that AMD suf- ware in the USA. Intel’s claim was that such docu-
fered in the market not because of any conduct by ments would likely be exculpatory of Intel because
Intel but because of AMD’s profound failings, then they would likely highlight that AMD had been fore-
there would consequently be little need for Intel to closed because of its own failings, and not because
provide what it termed “meet competition” rebates. (8) of Intel’s conduct. (9) These claims by Intel led it to
argue that it could not properly defend itself with-
In any case, the evidence outlined in the Decision
out those documents. As a result, Intel claimed that
demonstrates that Intel’s specific claims relating to
it was not able to reply to the supplementary State-
AMD do not stand up to scrutiny. In particular, as
ment of Objections by the extended deadline of 17
regards the quality of AMD’s products, the Deci-
October 2008 (10) and sought to suspend the Com-
sion does not make any absolute judgments on the
mission proceedings by requesting interim relief
technical performance of the products at stake, or
from the President of the Court of First Instance.
relative judgments on the comparative performance
of AMD and Intel products. However, it does rely It is not evident that Intel was not able to provide
on the evidence of those who are best placed to the documents in question itself. In fact, at a late
judge, namely the OEMs, which are well aware of stage in the proceedings, Intel was able to very
the advantages and disadvantages of the products quickly provide a full set of Dell testimonies and
of each of their suppliers. In this regard, as outlined exhibits from the Delaware trial. (11) Although the
in section 4.3 above, the Decision outlined how the Commission did not accede to Intel’s general re-
evidence demonstrated that AMD had improved its quest, particularly in light of the extensive nature
product offering, represented a growing threat to of the Commission’s investigation, it did seek from
Intel and was considered as a viable alternative by AMD the documents which it was able to specifi-
OEMs. cally identify on the basis of Intel’s request. After
examining these documents, they proved to be ei-
5. Procedure and Intel’s ther not relevant to the investigation or were not
Allegations of Bias exculpatory.
Intel raised a large number of allegations concern- After the President of the Court of First Instance
ing the Commission’s handling of the case during turned down Intel’s request for interim relief, the
the administrative procedure. Commission took into account belated written
In the first place, it claimed that the Commission submissions from Intel relating to the supplemen-
exhibited significant bias and adopted AMD’s allega- tary Statement of Objections of 5 February 2009,
tions wholesale without any objective assessment. In despite not being obliged to do so given that Intel
that regard, the Decision outlined that the Commis- had failed to reply in time. Shortly afterwards, In-
sion gathered a broad body of evidence from 141 tel requested an oral hearing, but this request was
companies via formal requests for information and turned down by the Hearing Officer. The Decision
on-the-spot inspections. The Decision’s conclusions points out that Intel could have submitted its reply
are based on extensive evidence originating mainly to the supplementary Statement of Objections by
from third parties or from Intel itself. the deadline of 17 October 2008, which was also
the deadline to request an oral hearing, and it chose
Intel also claimed that the Commission infringed its not to do so. (12)
rights of defence by not providing it with allegedly
exculpatory evidence communicated orally during a
meeting between the Commission and several Dell
executives in August 2006. While it is correct that
a meeting between the Commission and Dell was (9) Intel argued that it was not able to provide the Commis-
sion with these documents itself due to the nature of the
held in August 2006 Intel was provided with a non- protective orders from the Delaware trial.
confidential version of an internal note to the file (10) Similarly, Intel failed to reply to a letter of facts that the
regarding the content of the meeting and given the Commission sent on 19 December 2008 by the extended
opportunity to comment on this note. deadline of 23 January 2009.
(11) Having initially submitted extracts from the testimonies
Intel also claimed that it had been prevented from and requesting the Commission to obtain the full sets of
properly exercising it rights of defence because the documents, again arguing that it could not do so itself.
Commission did not obtain and provide Intel with (12) The Decision makes clear that the implications of accept-
ing Intel’s position with regard to both a reply to a State-
categories of documents from, inter alia, private liti- ment of Objections and an oral hearing would mean that a
company could de facto delay sine die any Commission com-
(8) Similar arguments apply to Intel’s claim that AMD was petition case with no practical downside by claiming that
foreclosed from the market because it did not have suf- more documents should be obtained by the Commission,
ficient capacity to supply customer demand. without any precise references to or identification of them.

36 Number 3 — 2009
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6. Remedies and Fines

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To the extent that any of the identified abuses are
still ongoing, the Decision required Intel to bring
such abuses to an end, and to refrain from any prac-
tice which would have the same or similar object or
effect.
As regards the fine, the Commission imposed a fine
of EUR 1,060 million on Intel. (13) That amount
was calculated in accordance with the Commission
Guidelines on fines. In order to estimate the value
of sales directly or indirectly related to the infringe-
ment in the EEA, the Commission took account
only of sales of CPUs billed by Intel to companies
located in the EEA. This represents only a fraction
of the computers purchased by European consum-
ers in the EEA, because the computers sold within
the EEA are in fact often assembled outside of Eu-
rope. This was therefore in Intel’s favour. Finally, no
aggravating or mitigating factor was taken into con-
sideration in the calculation of the fine.

(13) This represents 3.8% of Intel’s profit during the period of

Number 3 — 2009 37