Top European court’s ruling might embolden US tech companies to challenge regulators

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The highest court in the EU has dealt a blow to the European antitrust regulator. According to reports this morning, the European Court of Justice said that a roughly $1.3 billion fine imposed in 2009 on Intel needed to be re-examined by a lower court.

The facts of the Intel case involved the question of whether use of rebates by a dominant company were de facto anticompetitive and an abuse of market position. The European Commission had taken the position that they were and had imposed the fine. Intel had given the rebates to computer manufacturers, presumably to keep them from using AMD chips.

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Historically, European courts have effectively rubber-stamped European Commission antitrust decisions and fines. Most companies simply pay fines and move on. However, Intel appealed the fine and took its appeal to the European Court of Justice after a lower court agreed with the European Commission.

The European Court of Justice was critical of the lower court’s lack of consideration of Intel’s arguments about competition and lack of scrutiny of the underlying facts. This is significant because it might signal a new willingness of the European Court of Justice to question the European Commission’s decisions and require an independent analysis of the impact on markets of alleged anticompetitive behavior.

The ruling could be limited to the facts of the Intel case (involving rebates and payments between companies) and have less impact on factually unrelated antitrust cases. However, it could also give hope to American technology companies facing antitrust investigations and potential penalties to challenge European Commission decisions in European courts.

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Google recently declined to appeal a $2.7 billion fine by the European Commission over vertical search content, anticipating that it would be futile. There are two other active antitrust matters pending against Google in the EU. One is focused on exclusivity provisions in Google AdWords agreements and the other on app-install requirements in Android-OEM contracts. The company may also face future “vertical search” actions similar to the shopping search case for which it was fined.




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