CJEU renders landmark judgment in competition case against Intel

On 6 September 2017, the Court of Justice of the European Union ("CJEU") rendered a highly anticipated judgment in case C-413/14 P, opposing the US-based microchip manufacturer Intel to the European Commission.

The CJEU quashed the 2014 judgment of the General Court which had upheld the then-record fine of € 1.06 billion imposed on Intel by the Commission for infringement of the competition rules. According to the Commission, Intel had abused of its dominant position on the market for a certain type of central processing unit by implementing a strategy including, in particular, loyalty rebates to certain important customers, aimed at foreclosing from the market its most important competitor.

The CJEU refuted the position adopted by the Commission and the General Court that the rebates at issue were, by their very nature, capable of restricting competition and therefore prohibited without it being necessary to analyse all the circumstances of the case and, in particular, whether they were capable of foreclosing as efficient competitors.

Since the Commission had carried out an in-depth examination of the circumstances of the case in its decision to determine, in particular, whether the rebates were likely or capable to cause anticompetitive foreclosure and since the “as efficient competitor” test had played an important role in that analysis, the CJEU held that the General Court was required to examine all Intel’s arguments concerning that test.

The CJEU therefore referred the case back to the General Court, which will now have to review whether the rebates at issue are capable of restricting competition in the light of the arguments put forward by Intel.

The judgment provides some clarity in the debate on whether loyalty rebates granted by undertakings in a dominant position are anti-competitive by nature or whether competition law enforcers need to prove anti-competitive effects. It follows from the CJUE’s ruling, in essence, that dominant undertakings may seek to rebut the presumption of the prima facie anti-competitive nature of such rebates. An analysis of their capacity to foreclose is then required.