WEBVTT - Intel Case Puts EU Winning Streak in Jeopardy (Audio) 0:00:00.080 --> 0:00:03.160 Intel's clash with the European Union over chip pricing has 0:00:03.240 --> 0:00:06.440 dragged on for eight years, but could tomorrow's ruling in 0:00:06.600 --> 0:00:09.560 Intel's case at the EU Court of Justice room the 0:00:09.640 --> 0:00:13.720 e use twenty year winning streak in antitrust cases. Intel 0:00:13.720 --> 0:00:17.079 has continued its battle against the Commission's one point twenty 0:00:17.079 --> 0:00:20.440 six billion dollar penalty in two thousand nine for using 0:00:20.480 --> 0:00:24.079 discounts to push out advanced micro devices and the decision 0:00:24.120 --> 0:00:27.200 by the EU second highest court to back the regulator 0:00:27.760 --> 0:00:30.600 joining us. Is Pinur Actman, a professor at the University 0:00:30.600 --> 0:00:34.000 of Leeds School of Law, par Will you start by 0:00:34.040 --> 0:00:38.960 explaining the case against Intel? Sure? So? The case against 0:00:39.000 --> 0:00:42.800 Intel was that Intelling age in two types of anti 0:00:42.800 --> 0:00:46.159 competite behavior. The first one was that is engaged in 0:00:46.479 --> 0:00:51.159 giving rebates to originally equipment manufacturers the company's lifestyle and 0:00:51.360 --> 0:00:55.760 HP and so on, in return for sailing computers that 0:00:56.040 --> 0:01:00.360 had exclusively Intel, so essentially was encouraging them to sell 0:01:00.600 --> 0:01:03.240 computers with intellliships as opposed to computers with a n 0:01:03.280 --> 0:01:06.039 D hips. And the second conduct was that it also 0:01:06.160 --> 0:01:09.360 gave some months and payments uh to certain companies in 0:01:09.440 --> 0:01:12.640 Europe to delay the promotion of A and D products 0:01:12.680 --> 0:01:15.320 and so on, and the Commission, the European Commission sol 0:01:15.400 --> 0:01:19.399 thought that both of these practices infringed the rule against 0:01:19.400 --> 0:01:21.800 the vius of the dominant position in the year, and 0:01:21.880 --> 0:01:24.440 the General Court, which is the first court of instance 0:01:24.640 --> 0:01:29.640 um essentially upheld the decision. So what we are waiting 0:01:29.680 --> 0:01:32.600 tomorrow is the final judgment on the matter which we 0:01:32.600 --> 0:01:34.840 were delivered by the Court of Justice of the opinion, 0:01:35.600 --> 0:01:38.280 and what what clues do we have is to how 0:01:38.319 --> 0:01:40.800 the court is likely to come out in this case. 0:01:42.080 --> 0:01:45.160 So a very important clue we have is the opinion 0:01:45.240 --> 0:01:48.600 of the Advocate General Neil All, which was delivered on 0:01:48.760 --> 0:01:53.720 twenties October two thousand sixteen as a general opinion quite 0:01:53.720 --> 0:01:57.480 heavily criticized the legal assessment of the General Court in 0:01:57.480 --> 0:02:00.840 this case, and essentially as good General has argued that 0:02:01.200 --> 0:02:04.800 Thintel should win almost all of the grounds of appeals. 0:02:04.920 --> 0:02:09.080 The Court of just generally follows that general. It doesn't 0:02:09.120 --> 0:02:11.760 always do so, but it's probably about eighty percent of 0:02:11.800 --> 0:02:13.760 the cases it's wont to follow the opinion of the 0:02:13.800 --> 0:02:17.680 Addux General. So that's really the main mainten actually we 0:02:17.760 --> 0:02:22.240 have in this case. So pinar if Intel does win. 0:02:23.240 --> 0:02:26.000 What does effect does that have on other companies? What 0:02:26.040 --> 0:02:28.920 does it mean for other companies that are fighting the 0:02:29.160 --> 0:02:34.440 EU antitrust cases. So it would be most directly relivant 0:02:34.720 --> 0:02:39.320 for any other companies who might and who might have 0:02:39.440 --> 0:02:42.720 a certain degree of market power in their own markets. 0:02:42.960 --> 0:02:45.880 The area on rebase is one of the most controversial 0:02:45.919 --> 0:02:50.200 areas of European composition law because there's severe criticisms of 0:02:50.360 --> 0:02:53.600 how the law has developed in this area to the 0:02:53.600 --> 0:02:58.840 extent that it's very formalistic, and essentially because it's found 0:02:58.840 --> 0:03:01.400 on the basis of the type of rebate is opposed 0:03:01.400 --> 0:03:05.040 to the effect of any given rebate on the competitive 0:03:05.280 --> 0:03:10.200 competitive structure and the competition on the market. So tomorrow's 0:03:10.240 --> 0:03:13.600 judgment is the Court desided in the way that the 0:03:13.680 --> 0:03:16.960 Advocate General has appoint would suggest that we will be 0:03:17.000 --> 0:03:21.919 moving towards a more economic effects based approach, whereby rebase 0:03:22.000 --> 0:03:24.520 will than the judge on their actually effects on the 0:03:24.600 --> 0:03:27.960 market or potacial defects on the market as opposed to 0:03:28.800 --> 0:03:32.040 what their names like. So, for example, at the moment, 0:03:32.200 --> 0:03:36.000 the General Court um judgments suggests that all exclusive rebates 0:03:36.160 --> 0:03:40.240 are very sale mowful, which the Advocate General has suggested 0:03:40.520 --> 0:03:42.920 is a misinterpretation of the law. So it would be 0:03:43.000 --> 0:03:46.400 important for first of all all the companies who might 0:03:46.480 --> 0:03:51.880 begin rebates in their commercial relations with their customers, but 0:03:52.000 --> 0:03:57.720 also possibly for other dominant companies UM cases at the year, 0:03:57.760 --> 0:03:59.840 at the moment, because as you have that at the 0:03:59.840 --> 0:04:02.240 Bain in the European Commission hasn't lost the case of 0:04:02.320 --> 0:04:05.600 the visa dominance in over two decades. Can we put 0:04:05.640 --> 0:04:08.640 some specific companies names of companies to that. So there 0:04:08.800 --> 0:04:12.040 there's a case involving Qualcom, there's an investigation involving Google. 0:04:12.560 --> 0:04:16.800 Are those companies that could benefit from this ruling? It 0:04:16.880 --> 0:04:19.440 depends on how far the Court of Justice goes. I 0:04:19.480 --> 0:04:23.479 mean they could benefits and principle if the court shows 0:04:23.520 --> 0:04:27.039 that it's willing to move towards a more sect sphased 0:04:27.080 --> 0:04:31.039 approach rather than a formalistic approach. UM Google comes to 0:04:31.120 --> 0:04:34.800 mind first because an Intel's case BBS in question was 0:04:34.880 --> 0:04:38.160 actually and abies that has been found to be unlovel 0:04:38.200 --> 0:04:41.400 in many previous cases as well. So it's the court 0:04:41.440 --> 0:04:44.800 shows some willingness to change the interpretation of the law 0:04:44.880 --> 0:04:47.800 in such a well established area of conduct. It might 0:04:47.880 --> 0:04:50.040 also suggest that it could be willing to do so 0:04:50.240 --> 0:04:53.320 in more novel types of practices, as is arguably the 0:04:53.360 --> 0:04:57.640 case in Google. Thank you so much for being with us. 0:04:57.720 --> 0:05:00.080 That's been our actment and professor of the University of 0:05:00.200 --> 0:05:03.560 Leads School of Law, and we will have that decision 0:05:03.600 --> 0:05:05.440 for you tomorrow on Bloomberg Law.