Final Report of the Hearing Officer – Case AT.37990 – Intel
Date: 2023-09-21
Institutions: Directorate-General for Competition, European Commission
Subjects: EU competition policy, computer equipment, control of restrictive practices, dominant position, electronic component, restrictive trade practice, sanction (EU)








C_202301005EN.000101.fmx.xml












Official Journal of the European Union


EN
Series C













C/2023/1005


17.11.2023






Final Report of the Hearing Officer (1)

Case AT.37990 – Intel
(Text with EEA relevance)
(C/2023/1005)


(1)   

By the draft decision, the Commission re-imposes a fine on Intel Corporation (‘Intel’) further to the partial annulment of its Decision C(2009) 3726 final of 13 May 2009 (2) (the ‘2009 Decision’).


1.   BACKGROUND









(2)


The 2009 Decision found, in its Article 1, that Intel had committed a single and continuous infringement of Article 102 of the Treaty and Article 54 of the EEA Agreement from October 2002 until December 2007 by implementing a strategy aimed at foreclosing competitors from the market of x86 CPUs which consisted of several elements, numbered from (a) to (h). The elements under letters (a) to (e) concerned the grant of rebates to four original equipment manufacturers (‘OEMs’), which were conditional on these OEMs purchasing all or almost all of their x86 CPUs from Intel. The conduct set out under letters (f) to (h) consisted in making payments to OEMs so that they would delay, cancel or restrict the marketing of certain products equipped with a competitor’s CPUs (‘the naked restrictions’).












(3)


Article 2 of the 2009 Decision imposed on Intel a fine of EUR 1 060 000 000. Article 3 ordered Intel to bring the infringement to an end and to refrain from repeating any act or conduct described in Article 1, and from any act or conduct having the same or equivalent object or effect.












(4)


The 2009 Decision has been the subject of several judgments of the Union courts. In a first stage, the General Court dismissed in its entirety an action brought by Intel for the annulment of the 2009 Decision (3). On appeal, the Court of Justice set aside that judgment and referred the case back to the General Court for it to review whether the exclusivity rebates were capable of restricting competition (4).












(5)


On 26 January 2022, the General Court delivered the judgment on the above referral (5). It annulled Article 1(a) to (e) of the 2009 Decision (and its Article 3 in so far as it concerns those elements). The Commission’s findings concerning the naked restrictions in Article 1(f) to (h) of the 2009 Decision were upheld (6). However, since the General Court was not in a position to establish the amount of the fine relating to the naked restrictions, it annulled the entire fine imposed by Article 2 of the 2009 Decision (7).












(6)


The referral judgment is currently under appeal but the General Court’s finding concerning the naked restrictions has become res judicata in the absence of an appeal from Intel in that connection.




2.   PROCEDURE FOR THE RE-ADOPTION OF A FINE CONCERNING THE NAKED RESTRICTIONS









(7)


The Commission informed Intel by letter dated 2 May 2023 (the ‘Letter’) that it intended to adopt a new decision imposing a fine on Intel pursuant to Article 23(2) of Council Regulation No 1/2003 (8) for having committed a single and continuous infringement of Article 102 of the Treaty, by implementing a strategy aimed at foreclosing competitors from the market of x86 CPUs which consisted of the elements set out in Article 1(f) to (h) of the 2009 Decision. In the Letter, the Commission described the methodology that it intended to use in order to calculate the fine to be imposed on Intel.












(8)


In the Letter, Intel was invited to make known its views on the Commission’s intended decision within four weeks. Following Intel’s request, the Commission granted Intel an extension of four more weeks to reply to the Letter.












(9)


On 26 June 2023, Intel submitted its reply to the Letter (the ‘Reply to the Letter’).




3.   PROCEDURAL POINTS RAISED BY INTEL

a)   Intel’s arguments relating to an alleged lack of clarity of the Commission’s Letter









(10)


In its Reply to the Letter, Intel claims that ‘… the basis for the proposed fining decision is unclear’ (9) and that it cannot understand ‘on what specific basis the Commission intends to proceed in relation to the proposed fining decision’ (10). In this regard, Intel submits that, for it to understand the legal and factual reasoning underlying the Letter, it is necessary that the Commission identifies the recitals of the 2009 Decision that the Commission relies on (11). Intel also claims that the Commission must clarify whether the remaining findings in the 2009 Decision ‘can still be read as originally written or have to be requalified in light of the annulment of large parts of the 2009 Decision’ (12). Intel provides two examples in connection with the above, i.e., the treatment of the naked restrictions as a single and continuous infringement on their own without the conditional rebates, and the factors taken into account as regards gravity in the 2009 Decision (13).












(11)


By the Letter, the Commission informed Intel that it intended to adopt a new decision imposing a fine on Intel pursuant to Article 23(2) of Council Regulation No 1/2003, for having committed a single and continuous infringement of Article 102 of the Treaty, by implementing a strategy aimed at foreclosing competitors from the market of x86 CPUs which consisted of the elements set out in Article 1 (f) to (h) of the 2009 Decision (14).












(12)


As set out in both the Letter and the draft decision, the partial annulment of the 2009 Decision does not affect the legality of the preparatory acts adopted prior to the 2009 Decision, nor the 2009 Decision itself insofar as the naked restrictions are concerned. Therefore, the Commission may take up the procedure at the point at which the illegality found in the referral judgment occurred, i.e., the adoption of the 2009 Decision finding the conditional rebates to be an infringement and imposing a fine covering both the conditional rebates and the naked restrictions.












(13)


As was also noted in the Letter, the referral judgment does not call into question the lawfulness of the findings made in the 2009 Decision in respect of the naked restrictions, although it annulled the fine, as the fine was imposed for both the rebates and naked restrictions.












(14)


In the procedure for replacing an annulled act, the Commission is not required, or even allowed, to rule again on aspects of the initial decision which were not called into question by the judgment annulling that decision (15). The Commission is not required to clarify or requalify that infringement, since the Commission’s finding of a single and continuous infringement in the 2009 Decision with regard to the naked restrictions remains undisturbed by any of the judgments and therefore has the force of res judicata.












(15)


In that vein, the purpose of the Letter was rightfully confined, in essence, to informing Intel about the Commission’s intention to adopt a decision imposing a new fine on an already established single and continuous infringement, as permitted by law, and to explain the methodology to be applied to determine that fine, so as to allow Intel to be heard as regards such methodology.












(16)


By its Reply to the Letter, Intel provided detailed comments on that methodology, which shows that the Letter duly fulfilled the purpose of allowing Intel to provide its views on that methodology.












(17)


In those circumstances, I find that the Letter was sufficiently clear to allow Intel to make known its views as regards the basis for imposing the fine and the methodology to determine the fine that the Commission intends to follow.




b)   Request for a further opportunity to respond ‘in writing and orally’
                        









(18)


In the Reply to the Letter, Intel asks ‘confirmation that it will be provided an opportunity to make written and oral presentations on the response of the Commission services to [the Reply to the Letter] prior to any decision being proposed or adopted, in order to allow Intel to exercise properly its rights of defence’ (16). Also, Intel claims that ‘[b]y reason of basic principles of fairness, and the respect of the fundamental right to be heard in a meaningful manner (…) [the precise identification of the recitals of the 2009 Decision that the Commission relies on, and the reasons for that] must be set out so that Intel is in a position to respond, on an informed basis, in writing and orally before any fining decision is adopted’ (17). Further, in paragraph 75 of the Reply to the Letter, Intel claims that ‘[g]iven the uncertainty concerning the basis for the proposed approach, Intel is entitled, by reason of basic principles of fairness, the duty to give reasons, and the respect of the fundamental right to be heard, to have the matters set out above addressed. Intel will then be able to respond, on an informed basis, in writing and orally before any decision is adopted’.












(19)


Intel’s submission in essence asks for another round of exchanges with the Commission. It could be understood as suggesting that Intel, by those claims, wanted to call on the Commission to issue a new statement of objections which would then entail the possibility to request a new oral hearing (18).












(20)


Such a request would be unfounded.












(21)


As stated above, the annulment of an EU act does not necessarily affect preparatory measures, and the procedure for replacing the annulled measure may, in principle, resume at the very point at which the illegality occurred. Where the annulment does not affect the validity of prior procedural measures, the Commission is not, as a result of that annulment alone, required to address a new statement of objections to the relevant parties (19). In the present case, Intel did not allege that the defect identified by the referral judgment concerned the objections raised against Intel relating to the naked restrictions prior to the adoption of the 2009 Decision (20).












(22)


Second, the Letter concerned solely the detailed calculation of the amount of fines and provided Intel with the opportunity to comment thereon. As the draft decision rightly points out, the Commission is not raising any new objections and Intel is not arguing that the Letter contained such objections.












(23)


With regard to the exercise of the rights of the defence in respect of the imposition of fines, it is settled case-law that, provided the Commission indicates expressly in the statement of objections that it will consider whether it is appropriate to impose fines on the undertakings concerned and sets out the principal elements of fact and of law that may give rise to a fine, such as the gravity and the duration of the alleged infringement and the fact that it has been committed ‘intentionally or negligently’, it fulfils its obligation to respect the undertakings’ right to be heard (21).












(24)


Third, to the extent that Intel is taking issue with the absence of a further oral hearing, it is noted that the right to be heard does not mean that the person concerned must be given the opportunity to express his or her views orally, since the opportunity to provide comments in writing also allows that right to be observed (22). Intel had the possibility to react in writing to the Letter.




4.   CONCLUSION









(25)


Based on the above, and taking into account that I have not received any request or complaint in connection with the adoption of the draft decision, I consider that the effective exercise of Intel’s procedural rights has been respected in the present procedure.






Brussels, 21 September 2023.

Dorothe DALHEIMER
               





(1)  Pursuant to Articles 16 and 17 of Decision 2011/695/EU of the President of the European Commission of 13 October 2011 on the function and terms of reference of the hearing officer in certain competition proceedings (OJ L 275, 20.10.2011, p. 29) (‘Decision 2011/695/EU’).

(2)  Commission Decision C(2009) 3726 final of 13 May 2009 relating to a proceeding under Article 82 of the EC Treaty and Article 54 of the EEA Agreement (AT.37990 – Intel).

(3)  Judgment of 12 June 2014, Intel Corporation Inc. v Commission, T-286/09, ECLI:EU:T:2014:547.

(4)  Judgment of 6 September 2017, Intel Corporation Inc. v Commission, C-413/14 P, ECLI:EU:C:2017:632. In this context, the Court of Justice rejected Intel’s pursuit on appeal of one of its pleas relating to an alleged procedural irregularity affecting Intel’s rights of defence (appeal judgment, paragraphs 79 to 107).

(5)  Judgment of 26 January 2022, Intel Corporation Inc. v Commission, T-286/09 RENV, ECLI:EU:T:2022:19 (the ‘referral judgment’). In its written observations on the referral back, Intel withdrew, among other pleas, its pleas on procedural irregularities. Those pleas therefore no longer formed part of the subject matter of the referral (see the referral judgment, paragraph 74).

(6)  See the judgment in case T-286/09 RENV, paragraph 96.

(7)  See the judgment in case T-286/09 RENV, paragraph 529.

(8)  Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, p. 1).

(9)  Reply to the Letter, paragraph 2.

(10)  Reply to the Letter, paragraph 9.

(11)  Reply to the Letter, paragraphs 2 and 8 to 10.

(12)  Reply to the Letter paragraph 10.

(13)  Reply to the Letter paragraphs 12 and 13.

(14)  Letter, paragraphs 5 to 10.

(15)  See, T-224/95, Tremblay and Others v Commission, ECLI:EU:T:1997:187, paragraph 53; Case T-471/11, Editions Odile Jacob v Commission, paragraph 58.

(16)  Reply to the Letter, paragraph 7.

(17)  Reply to the Letter, paragraph 14.

(18)  Articles 10, 11 and 12 of Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty (OJ L 123, 27.4.2004, p. 18).

(19)  
            Limburgse Vinyl Maatschappij and Others v Commission, C-238/99 P, C-244/99 P, C-245/99 P, C-247/99 P, C-250/99 P to C-252/99 P and C-254/99 P, ECLI:EU:C:2002:582, paragraphs 73 to 75 and 80 and 81

(20)  See, Toshiba v Commission, C-180/16 P, EU:C:2017:520, paragraph 28.

(21)  Judgment of 19 January 2016, Toshiba Corp. v Commission, T-404/12, EU:T:2016:18, para. 40.

(22)  
            HeidelbergCement AG and Schwenk Zement KG v Commission, T-380/17, EU:T:2020:471, paragraph 634.


ELI: http://data.europa.eu/eli/C/2023/1005/oj
ISSN 1977-091X (electronic edition)