Legal News

Has the EU Violated Intel?s Human Rights?

By Ashby Jones

Earlier today Intel Corp. appealed a billion-euro antitrust fine lodged by the European Union. No big whoop there, right? The big whoop comes here: that among the arguments made by the behemoth chipmaker is that, with the fine, its human rights were violated.

First, before taking a harder look at the claim, let’s take a step back. In May, the EU slammed Intel with a $1.45 billion fine, claiming the company, among other things, broke EU rules by using the threat of withdrawing rebates it offered to large computer manufacturers, its customers, to pressure to them to buy all or most of their chips from Intel rather than rival Advanced Micro Devices. At the time, Intel chief executive Paul Otellini said the company took "strong exception to this decision," which he called "wrong."

But a human-rights violation? Unfortunately for us and you, LBers, the Journal’s Charles Forelle reports that Intel’s precise legal arguments aren’t known; under EU procedure, court case files are closed to public inspection.

Granted, when one thinks “human-rights violation,” one thinks, say, forced sterilization or prison-torture. But Intel’s argument is likely to raise what we might identify as a due-process question: At what point does an administrative body cross the line to a criminal court?

Specifically, Intel may be calling into question the EU’s practice of having a politically appointed bureaucrat-the current antitrust commissioner is Neelie Kroes of the Netherlands-wear all the hats in an antitrust investigation. Kroes supervises investigations, and then decides whether the target is guilty and what the punishment should be. Her decisions are rarely questioned by the other 27 EU commissioners.

The EU itself has no constitution and no bill of rights. But the European Convention on Human Rights, a treaty signed by all EU countries, sets out standards for criminal proceedings, among them a fair hearing by an “independent and impartial tribunal.”

That said, commission officials argue that the regulator doesn’t need to be an impartial tribunal, and EU courts have agreed, largely because the decisions can be appealed to the Court of First Instance in Luxembourg, which is independent, says Jonathan Todd, spokesman for Mrs. Kroes.

Todd adds that the commission has “very, very strict safeguards for defendant’s rights,” including an internal “devil’s advocate” panel that stress-tests potential cases and a hearing at which companies can present their defense.

Indeed, while other companies have raised similar issues, Forelle calls the maneuver something of a Hail Mary pass-no EU antitrust appeal has won on the argument. But it reflects the frustration of companies faced with ever-mounting fines from the EU’s vigorous antitrust watchdog.

Full post as published by Law Blog - WSJ.com on July 22, 2009 (boomark / email).