INTC Intel Corporation

By Natalia Drozdiak 

BRUSSELS -- An adviser to the European Union's highest court has thrown his weight behind Intel Corp.'s appeal against a decision by the bloc's antitrust regulator to fine the chip maker EUR1.06 billion ($1.17 billion) for abusing its dominant position.

The adviser to the European Court of Justice said on Thursday that a lower court erred in its 2014 judgment when it threw out the U.S.-based firm's appeal to the decision "in its entirety." The adviser said the case needs to be re-examined.

Although the opinion is nonbinding, judges at the EU's top court typically rule in line with the adviser's view.

The opinion is nonbinding, but judges at the EU's top court consider the adviser's view when they make a final judgment.

Such a decision by the top court could help Intel recoup much or all of the fine it had to pay the European Commission, the bloc's competition authority. The commission imposed the record fine on the company in 2009 for abusing its dominant position in the microprocessor market.

A court decision that hews closely to the opinion could also create a precedent for how the EU deals with other antitrust cases under its microscope, such as the investigations into Alphabet Inc.'s Google and Qualcomm Inc.

"The judgment of the general court should be set aside," said Advocate General Nils Wahl, adding that the case should be referred back to the general court so it could examine all the circumstances in the case and determine whether Intel's conduct harmed competition.

A European Commission spokesman and Intel both declined to comment because the case is still open.

The commission's accusations centered on rebates that Intel granted to four major computer manufacturers -- Dell Inc., Hewlett-Packard Co. , NEC Corp. of Japan and Lenovo Group -- for using its microchips between 2002 and 2007.

Its investigation found that Intel had used the rebates, coupled with its dominant position, to exclude rival Advanced Micro Devices Inc. out of the market, resulting in less choice for consumers. The EU also said Intel made payments to electronics retailer Media Saturn Holding on the condition that it only sold computers containing Intel's microprocessors.

Intel appealed, arguing that the regulator had selectively-picked evidence, drawn false conclusions that relied heavily on speculation found in emails, and ignored evidence that AMD wasn't harmed.

In its 2014 ruling, the general court said the commission had showed, to a sufficiently high legal standard, that Intel's use of rebates could restrict competition. The chip maker appealed the decision to the highest court, the European Court of Justice.

On Thursday, Mr. Wahl said the general court had erred in its finding. He said the court failed to take into account all circumstances when determining whether the company's rebates amounted to an abuse of a dominant position.

The lower court also failed to establish that the use of rebates shut out competitors, Mr. Wahl said. He noted that HP and Lenovo could still buy significant quantities of chips from AMD.

If baked into a formal court judgment, that view could impose a greater burden on the EU to provide more concrete evidence when proving that a dominant player has abused its position and shut out rivals, lawyers say.

The advocate general presents a more relaxed view of a company's use of rebates, an issue that the commission has raised in its investigation into Qualcomm.

In addition, Mr. Wahl said the commission had breached EU law on matters of procedure when it failed to record a meeting it had with a Dell executive on the case. Such recordings are important for accused companies to organize their defense.

Write to Natalia Drozdiak at natalia.drozdiak@wsj.com

(END) Dow Jones Newswires

October 20, 2016 14:09 ET (18:09 GMT)

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