On May 13, 2009, the European Commission imposed on Intel the highest fine ever levied (€1.06 billion or approximately $1.45 billion) for a violation of Article 82 of the EC Treaty, which prohibits abusive conduct by dominant firms. The Commission’s 542-page decision (which has yet to be released) is likely to be important for several reasons:

(1) The decision implicates controversial issues regarding the permissible use of rebates, discounts, and promotional payments by firms with leading market positions, including the conditions under which such conduct may be deemed an “exclusive dealing arrangement,” and in which above-cost pricing conduct may be considered anticompetitive;

(2) Depending on the precise conclusions of the EC’s decision, the outcome of Intel’s expected appeal, and ongoing U.S. litigation, there is a real prospect of continued and heightened divergence between U.S. and EU law in this area; and

(3) The decision further solidifies the EC’s reputation as (a) an attractive venue for complainants seeking redress for dominant firm conduct and (b) an enforcement agency willing to assert jurisdiction against companies and conduct outside its borders.

Please see update for more information.