The case discusses the eight-year-long battle between the world’s largest semiconductor company, Intel Corporation (Intel) and the European Union (EU). In 2009, the European Commission (EC) had imposed a € 1.06 billion fine on Intel for violating the antitrust policies of the EU. The EC alleged that Intel had abused its monopoly in the computer microprocessors market by coercing manufacturers to purchase all their chips from Intel instead of rivals such as Advanced Micro Devices (AMD). After the EC handed down the fine on Intel, in 2014, the chipmaker appealed to the General Court stating that the fine was huge. However, in June 2014, the General Court upheld the € 1.06 billion fine against Intel stating that the penalty was proportionate to Intel’s anticompetitive practices. In August 2014, Intel appealed to the Court of Justice of the European Union (CJEU), the EU’s top court, to overturn the General Court’s decision. In September 2017, the CJEU ruled that the General Court could re-examine the fine against the company. The CJEU in its ruling decided in the case of Intel, the ‘As-Efficient-Competitor’ (AEC) test should be properly evaluated by the General Court. The General Court had to look into Intel’s legal arguments more closely, giving a chance to Intel to have the antitrust fine reduced or annulled. .

Economics Case Studies | Case Study in Management, Operations, Strategies, Business Environment, Case Studies

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Issues

The case is structured to achieve the following teaching objectives:

	Analyze the antitrust allegations against Intel and the company’s response thereof.
	Understand the market structure of the chips market and discuss and debate whether Intel was creating a monopoly in the PC and server microprocessors market.
	Understand the importance of companies operating in foreign countries knowing the rules of competition.
	Discuss the legal and ethical issues related to the case.

Contents

INTRODUCTION

BACKGROUND NOTE

COMPETITION BETWEEN INTEL AND AMD

INTEL’S INITIAL TROUBLES WITH THE EC

EC REOPENS THE PROBE

EC ISSUES SUPPLEMETARY STATEMENT OF OBJECTIONS

INTEL APPEALS TO THE COURT OF FIRST INSTANCE

EC FINES INTEL

INTEL APPEALS TO THE GENERAL COURT

INTEL MOVES TO THE CJEU

THE ROAD AHEAD

EXHIBITS

Keywords

Market structure; Monopoly; Duopoly; Competition; Anticompetitive practices; Antitrust laws; Discounts; Exclusivity rebates; Business environment; Business law; Ethics; ‘As-Efficient-Competitor’ (AEC) test; Intel; AMD; Europe

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