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Intel v Commission: Keep Calm and Carry on!
Abstract
Few competition law cases have excited as much attention as the General Court’s Intel judgment of 12 June 2014, in which it upheld the Commission’s finding that Intel had infringed Article 102 and the fine of E1.06 billion that it had imposed on it. The judgment has been greeted with huge hostility. At a recent conference I heard a senior economist refer to it as a ‘return to the Dark Ages’; a session at the GCR conference in Brussels in November will include a session on ‘sifting the wreckage of the Intel General Court judgment’; Jim Venit’s commentary on the judgment is entitled ‘All Steps Backward and No Steps Forward’. One law firm’s briefing declares that the judgment ‘bans’ rebate schemes that may be beneficial to consumers and may chill legitimate business behaviour; another says that the judgment creates more legal uncertainty, which is not easy to reconcile with the common criticism that it reverts to a form-based system that automatically prohibits exclusivity rebates: if that is the case, it makes the law more certain, not less. The judgment is also said to widen the gap between what the Commission intended to achieve by its Guidance on Article 102 Enforcement Priorities and the jurisprudence of the Courts in Luxembourg. Of course there have also been more measured commentaries on Intel, not least by Paul Nihoul in this journal who helpfully examines why the EU courts do not adopt the same line as the Federal Courts in the US in their application of section 2 of the Sherman Act. Wouter Wils has argued powerfully that Intel is both legally and economically sound, and that the so-called ‘more economic approach’ to the enforcement of Article 102 is unsound. The debate now moves to the Court of Justice. Intel’s grounds of appeal have recently been published in the Official Journal: it argues that the General Court erred in law by concluding that the rebates in question were inherently capable of restricting competition; it was wrong to proceed on the basis of ‘abstract considerations rather than likely or actual effects’; and it should have taken into account a number of factors such as the market coverage of the practices, their duration, falling prices and a lack of foreclosure, as well as the conclusions that should properly have been drawn from the Commission’s analysis of the ‘as-efficient competitor’ test in its decision. Other grounds of appeal address, among other issues, extraterritorial jurisdiction and the level of the fine. It can hardly be an exaggeration to suggest that the Court of Justice’s judgment in Intel will be one of the most important on competition law for many years, and it will certainly be eagerly anticipated. My expectation is that the
... However, when comparing the EU "implementation" doctrine and the US "effects" doctrine, the noted divergence arises out of the fact that under the former the EU law would not apply to a situation where an agreement entered into outside the EU prohibits sales within the EU or purchases from EU producers, whereas under the latter the US competition law would be applicable provided that such an agreement is directed at the US market. 34 This proved to be true in Intel where the CJEU eventually ceased avoiding the "effects" doctrine. ...
Intel, a US-based company, was fined by the European Commission in 2009 for abusing its dominant position at the computer processor market intended to exclude its competitor AMD from that market. The penalty amounting to €1.06bn was the largest antitrust fine in the Commission’s history at the time. As the EU General Court had rejected Intel’s appeal in 2014, the matter was brought before to EU Court of Justice. The CJEU judgment, rendered in September 2017, is controversial for at least two reasons. First is the territorial reach of the EU competition law outside the EU borders, and second relates to the treatment of exclusivity rebates. With regards to the former, for the first time the CJEU confirmed the position of the Commission and the General Court regarding the extended territorial reach of the EU anti-trust legislation. Quite the opposite, the CJEU quashed the General Court ruling as to the former, arguably rejecting the traditional per se infringement of exclusivity rebates and embracing the effects-based analysis. The doctrine is somewhat divided as to whether this judgment is a much needed clarification of the two issues or it indicates a new direction in EU competition law analysis. This paper is addressing the most important ideas in the doctrinal interpretations and related arguments, and provides critical assessment of the present state of affairs. It also raises certain points relevant to the Intel judgment, which so far have not been given sufficient attention in the case comments and scholarship.
... In particular, it sets a clear rule according to which quantity rebates are presumptively lawful; exclusivity rebates presumptively unlawful in the absence of an objective justification; and the 'third category' rebates require detailed analysis. 214 In addition, the presumption of illegality of loyalty rebates could be economically justified. 215 This judgment does not sit uncomfortably with an ordoliberal understanding of competition. ...
How can economic insights be better used in the interpretation and concretization of the prohibition of abuse under Article 102 TFEU? The author answers this research question and comes to the conclusion that the more economic approach to Article 102 TFEU has failed. To prove this, he utilizes the method of qualitative content analysis from social science for the legal analysis of decisions. Subsequently, the author shows that economic insights can be decisive not only for the content of the prohibition of abuse under Article 102 TFEU, but also for the process of interpretation and concretization. He develops a method to translate economic insights into legal rules.
Article 102 TFEU prohibits the anti-competitive behaviour of dominant undertakings. It restricts the autonomy of economic actors that qualify as dominant, forcing them to adapt their actions to the lessened degree of competition on the dominated market. Alongside Article 101 TFEU and Regulation 139/2004, it is another tool in the shed of EU and national competition authorities so as to ensure competitive markets within the internal market.
The present chapter deals with the relaxation of the link between harm and remedy brought about by the use of the Article 9 instead of the Article 7 procedure. In a nutshell, it aims at assessing whether and to what extent the allegation that the recourse to consensual commitments leads to remedies that go beyond what could have been imposed unilaterally is correct.
On 6 September 2017, the Court of Justice of the European Union delivered its long-awaited Intel judgment. The European Commission had accused Intel of inducing customer loyalty and thus foreclosing the relevant market for its competitors through (i) a rebate scheme and (ii) direct payments, both of which the Commission qualified as abuses of dominance under Article 102 TFEU. The General Court upheld the Commission decision in its entirety in June 2014. Before the Grand Chamber of the Court of Justice, however, the General Court’s Intel judgment was set aside and the case was referred back to that Court. The Court of Justice held that where the Commission, as in its Intel decision of 2009, also relies on an as-efficient-competitor (AEC) test in order to assess the capability of a rebate scheme to restrict competition contrary to Article 102 TFEU, the General Court must review a party’s counterarguments pertaining to this economic analysis. The General Court was instructed to further examine the factual and economic evidence in this respect. With a view to illuminating the legal questions that posed themselves in Intel, the present contribution reviews the leading European case law on rebate schemes – Hoffmann-La Roche, Michelin I and II, British Airways, Tomra and Post Danmark II – as well as the Commission’s approach to conditional rebates in its 2009 Guidance Paper. After briefly recalling the different stages of the Intel case, the contribution then offers a commentary on and an analysis of the Court of Justice’s Intel judgment and the way in which the Court attempted to reconcile its formalistic case law on rebate schemes with the effects-based economic tests carried out by the Commission.
In the late 1990s, the European Commission embarked on a mission to bring EU competition policy more into line with contemporary economic theory. Over a period of ten years, it systematically revised key legal concepts of all three pillars of EU competition law. Most importantly, it adopted the consumer welfare aim, revised its understanding of competitive harm and countervailing effects accordingly, and committed itself to carrying out more in-depth assessments of the investigated conduct’s effects instead of relying on form-based presumptions of illegality. Initially, many tenets of the more economic approach were in conflict with the case law of the European Court of Justice, which had a broader understanding of the aims of EU competition law. However, after a few initial set-backs for the Commission, several recent judgments in cases such as MEO, Intel, Post Danmark I, and Cartes Bancaires suggest that the Court’s understanding of EU competition law is evolving and that it is willing to embrace at least a few of the Commission’s revised principles. In particular, it is adopting a more effects-based approach to assessing business conduct and is cautiously curbing its former concept of harm in exclusionary situations. At the same time, however, it continues to adhere to many of its former freedom- and fairness-based principles, so that a number of uncertainties and inconsistencies remain.
Although heated debates are quite common in the law on abuses of dominant position, it is not an exaggeration to state that Intel case has generated an unusual storm of comments and discussions. In 2009, the European Commission fined Intel 1.06 billion € for abusing dominant position by granting exclusivity rebates. In 2014, the General Court rendered judgment in support of the European Commission`s decision. In 2017, the Court of Justice of the European Union set aside that judgment and referred the case back to the General Court in order for it to examine Intel`s arguments regarding the capacity of the rebates at issue to restrict competition. This long awaited ruling in the Intel case is so far one of the most important judgments regarding exclusivity rebates and Art. 102 TFEU enforcement. The paper addresses relevant issues and conclusions in relation to the exclusivity rebates. Additionally, the author attempts to assess possible effects and implications of the Courts of Justice`s judgment. Pristop do rabatov po zadevi IntelČeprav so na področju zlorab prevladujočega položaja vroče razprave nekaj običajnega, je vendarle primer Intel povzročil neobičajen plaz komentarjev in razprav. V letu 2009 je Komisija EU kaznovala podjetje Intel z 1,06 milijarde evrov zaradi zlorabe prevladujočega položaja z dodeljevanjem ekskluzivnih rabatov. To odločitev Komisije EU je Splošno sodišča v letu 2014 potrdilo. V letu 2017 pa je Sodišče EU odločbo razveljavilo in zadevo vrnilo Splošnemu sodišča, da preuči argumente podjetja Intel v zvezi z omejevanjem konkurence. Ta dolgo pričakovana odločba Sodišča EU je do sedaj ena najpomembnejših odločb, ki obravnava ekskluzivne rabate v okviru 102. člena PDEU. V zvezi s tem prispevek obravnava relevantna vprašanja in podaja zaključke, prav tako pa avtorica skuša oceniti verjetne učinke in vpliv te odločbe Sodišča EU.
It is widely accepted that firms compete by offering consumers lower prices, high-quality products, and a wide range of choices. With the increasing commercialization of personal, there is now a growing consensus that the level of privacy protection and deployment of Privacy Enhancing Technologies (PETs) could be subject to competition by companies. A case in point is the recognition by the European Commission that data privacy constitutes a key parameter of non-price competition in the market for consumer communications and for professional social networks. This approach treats privacy as a quality, choice or innovation component of the product/service offered to consumers and certain privacy harms as reductions in these parameters that need to be accounted for in the competition analysis. However, little attention has been paid in laying out a concrete theory of harm that outlines how data privacy can be incorporated into competition analysis as a non-price parameter and what constitutes reduction in privacy. This paper is an attempt to fill in this apparent gap. To this end, the paper provides a critical analysis, in light of EU competition law, of three theories harm for incorporating privacy as a non-price competition parameter into merger assessment, namely the privacy-as-a-quality, the consumer choice theory and the maverick-firm theory. Additionally, the paper examines what dimensions of privacy are relevant for competition and what is the (added) value of incorporating privacy into competition analysis.
On 29 of October the leaders of the Belgian federal government and the regional and community governments reached a compromise deal over the EU-Canada Comprehensive Economic and Trade Agreement (CETA). One of the key outcomes is that the Belgian federal government will seek the Opinion of the European Court of Justice on the compatibility of the Investment Court System (ICS) in Chapter Eight of CETA with the EU Treaties. As soon as the Belgian federal government makes the request for an Opinion, the Court will be able to express itself on this contentious legal issue. This article provides some background on the origins of the Walloon request before explaining why ICS could potentially pose a legal problem for the EU.
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