Intel Dodges Massive Fine – for now

The Court of Justice of the European Union has set aside a judgment of the General Court on the Intel fine for breach of competition law

In a decision published on 6 September in Case C-413/14 P Intel v EU Commission, the CJEU has referred one element of the Intel case back to the General Court to consider further Intel’s argument that rebates it offered did not have an anti-competitive effect.

The case concerns a fine of €1.06 billion imposed by the EU Commission on Intel for having abused its dominant position on x86 CPUs from October 2002 to December 2007. Intel offered prominent manufacturers of computers ‘loyalty rebates’ which had the effect of stifling competition.

When Intel appealed to the General Court, that court supported the Commission view that loyalty rebates granted by an undertaking in a dominant position were, by their very nature, capable of restricting competition such that an analysis of all the circumstances of the case and, in particular, an as efficient competitor test (‘AEC test’) were not necessary.

The General Court ruling was appealed by Intel to the CJEU. While the CJEU rejects Intel’s arguments alleging that the Commission lacked territorial jurisdiction to penalise the abuse and its allegations of procedural irregularities, it has taken the view that the General Court failed to examine all of Intel’s arguments concerning the capacity of the rebates to restrict competition. In particular, the CJEU notes that, while the Commission emphasised that the rebates at issue were by their very nature capable of restricting competition, it nevertheless carried out an in-depth examination of the circumstances of the case in its decision and the AEC test played an important role in the assessment of whether the rebate scheme was capable of having foreclosure effects on as efficient competitors. The CJEU has held that the General Court was therefore required to examine all of Intel’s arguments concerning that test (such as, inter alia, the errors allegedly committed by the Commission as regards that test), which the General Court failed to do. The General Court’s judgment is set aside as a result of that failure and the General Court must now examine, in the light of the arguments put forward by Intel, whether the rebates at issue are capable of restricting competition.

None of this means that Intel avoids the fine; indeed, it seems likely that it will still be upheld.

This case also demonstrates the importance of recognising the hierarchy of decision-making in the CJEU – something which many reporters and commentators (including this one) often gloss over.

Published: 2017-09-06T11:00:00

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