The most significant EU competition law judgment of 2014 was the General Court’s judgment of 12 June, dismissing an appeal by Intel Corp. against a 2009 decision by the European Commission (‘Commission’) to ine Intel Corp. €1.06 billion for the abuse of a dominant position in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU).
The main abuse considered was exclusivity rebates, which are rebates conditional on the customer obtaining all or most of its requirements from the dominant company (and it is not helpful that this and earlier cases all fail to define the threshold at which the purchase requirement becomes ‘most’ of the customer’s requirements).
The judgment’s principal inding is that exclusivity rebates granted by a dominant company are, by their very nature, likely to be anti-competitive and that, as result, there is no requirement to demonstrate anti-competitive effect in the circumstances of an actual case. This approach arguably contradicts the existing enforcement practice of the Commission itself, which the Commission has stated in guidelines will involve the economic assessment of anti-competitive effect.
The Commission and other competition authorities have consistently deined pharmaceutical and other Lifescience markets on a narrow basis with the result that it is advisable that the commercial policies of many companies in this sector comply with the abuse rules under Article 102. Such a strict statement of the law can be expected to have a major impact on the commercial strategy of companies with a strong market presence, forcing them to consider a cautious approach of avoiding potentially noncompliant discount offerings which may be commercially attractive and may appear to represent innocuous and customary business practices.