The European Union's General Court rejected the appeal of Intel to overturn a $1.44 billion penalty imposed by the European Commission in 2009 on the computer microchip company for antitrust violations.
Intel, however, has the option to again try to appeal the decision to the European Court of Justice, which is the highest court of the European Union, within 70 days.
The General Court determined that Intel, which has a 70 percent market share in the computer microchip industry, used anti-competitive measures to gain leverage over rival Advanced Micro Devices or AMD, between the years 2002 and 2007.
Specifically, the General Court explained that the company bribed Media-Saturn, a massive retail chain in Germany, to stock only computers that use Intel chips and not AMD ones, showing a clear violation of antitrust laws.
"The General Court finds that those payments were capable of making access to the mark more difficult for AMD."
The General Court also stated that Intel's exclusivity rebates that it gave to computer manufacturers such as Dell, HP, Lenovo and NEC "are, when applied by an undertaking in a dominant position, incompatible with the objective of undistorted competition within the common market."
Intel, however, maintains that the rebates were a legal and common method to reward computer manufacturers for buying Intel products in bulk amounts.
Intel appealed the decision of the European Commission because of a disproportionate fine. However, the General Court said that the fine levied upon the company was reasonable. The $1.44 billion fine, which is just over 4 percent of Intel's annual turnover in 2008, could have been much bigger, the General Court said. The percentage could have legally been as high as 10 percent.
While Intel expresses extreme disappointment with the rejection of their appeal, the company noted that the decision will not have any financial impact on Intel's current business as the fine was already paid back in 2009.
The ruling and the General Court's upholding of it against the appeal of a major international company might force other major companies with dominant market shares in Europe to re-think their strategies if they can be accused of breaking antitrust laws, especially with how the courts favored the findings of antitrust regulators involved in this case.
"The big concern for large firms with this ruling is that the top European antitrust enforcer is not required to show actual, or even potential, harm to competitors or consumers in dominance cases," said Baker Botts law firm partner former Philips antitrust head Paul Lugard.
Microsoft has been hit with similar antitrust fines by the European Commission, while Google has been embroiled in a three-year antitrust case with the commission.
