On 6 September 2017, the European Court of Justice published its much anticipated judgment in Intel (C-413/14 P).
The case concerned a Commission decision of 2009 in which Intel was fined € 1.06 billion for abusing its dominant position. The Commission found amongst others that Intel had granted loyalty enhancing rebates to its customers (such as Hewlett-Packard, Lenovo or Dell) in order to exclude AMD, one of its competitors, from the market.
The Commission’s decision was appealed at first instance by Intel to the General Court, which rejected the appeal and upheld the Commission decision.
Intel however lodged a second appeal before the Court of Justice, which quashed the General Court’s judgment. The case has now been referred back to the General Court, which must rule again on the merits of the case.
The ECJ’s judgment brings clarity on certain procedural and substantive issues which have proved controversial in the past few years.
The main point of the judgement deals with the Commission’s burden of proof concerning rebate schemes.
The ECJ first recalls that rebates which are made conditional on a customer purchasing all or almost all of their requirements from the dominant undertaking are presumed to be an abuse of dominance.
However, the ECJ now clarifies that a dominant undertaking can rebut that presumption by contesting, on the basis of supporting evidence, that its behaviour was not capable of restricting competition by foreclosing competitors.
The ECJ emphasises that in such case, the Commission must produce an effects-based analysis: it must analyse whether the practice has “an intrinsic capacity (…) to foreclose competitors which are at least as efficient as the dominant undertaking” and “whether the exclusionary effect (…), which is disadvantageous for competition, may be counterbalanced, or outweighed, by advantages in terms of efficiency which also benefit the consumer”.
The General Court, the ECJ continues, is required on appeal to examine both the Commission’s effects-based analysis and the dominant undertaking’s counter-arguments, which it failed to do in the present case.
The full text of the judgement can be found here.