Beleaguered Intel gets $1 billion boost courtesy of EU Court of Justice
Beleaguered Intel gets $1 billion boost courtesy of EU Court of Justice
The ruling ended a nearly two-decade-long fight between the U.S. chipmaker and EU regulators who had said it had tried to thwart a rival.
The EU Court of Justice, Europe's top court, ruled on Thursday in favour of Intel, ending a nearly two-decade-long fight between the U.S. chipmaker and EU regulators who had said it had tried to thwart a rival. EU regulators had initially fined Intel 1.06 billion euros ($1.14 billion) but a lower tribunal scrapped that.
"The Court of Justice dismisses the Commission’s appeal, thereby upholding the judgment of the General Court," the court said.
The European Commission had fined Intel for giving rebates to computer makers Dell, Hewlett-Packard, NEC, and Lenovo for buying most of their chips from Intel, which regulators said was an attempt to block Advanced Micro Devices.
Regulators generally oppose rebates offered by dominant companies because they fear they may be anticompetitive, while companies say enforcers must prove discounts have anticompetitive effects before companies are sanctioned.
Intel's case was boosted earlier this year when an adviser to the court said regulators had not properly performed an economic analysis.
The ruling comes while Intel is in the midst of a significant cutback process due to financial struggles. The first phase of cuts occurred in August when the company announced a $10 billion cost-cutting plan, which included laying off 15,000 employees—15% of its workforce—and implementing targeted measures like canceling leasing programs and reducing employee benefits. The second phase followed last month, with the announcement that the foundry division—Intel's business of manufacturing chips for other companies—will become an independent subsidiary with its own board of directors.
While mass layoffs at Intel Israel will not take place until the end of October due to the Jewish holidays, the chip giant cut thousands of jobs in the U.S. last week. According to reports in the U.S., Intel has sacked more than 2,250 U.S. workers. The majority were laid off in Oregon (1,300), with hundreds of employees also being fired in Arizona (385), California (319) and Texas (251).
