Court of Justice sets aside General Court judgment in Intel loyalty rebates case

In a victory for Intel, the Court of Justice has set aside a General Court judgment dismissing its appeal against the European Commission’s 2009 decision fining Intel for breach of Article 102 TFEU.

The Court of Justice has referred the case back to the General Court to reconsider whether the Commission correctly applied the “as efficient competitor” (AEC) test to Intel’s loyalty rebates.  The AEC test played a significant role in the Commission’s assessment of the foreclosure effect of Intel’s rebate scheme on competitors.

The Court of Justice found that if, in a decision finding loyalty rebates to be abusive, the Commission concludes that the scheme restricts competition, the reviewing Court must examine all arguments that challenge the Commission’s findings on the potential for the rebates to give rise to foreclosure.  

The Court of Justice rejected Intel’s contention that the General Court misapplied the qualified effects doctrine to establish jurisdiction.  The qualified effects doctrine allows for the application of EU competition when it is foreseeable that the conduct in question will have an immediate and substantial effect in the EU.   The Court of Justice ruled that the General Court had correctly applied this test.

The Court of Justice upheld Intel’s argument that the Commission should have recorded a meeting with an executive of another company.  According to the Court, there was no valid distinction between “formal” interviews, covered by Article 19(1) of Regulation 1/2003 and Article 3 of Regulation 773/2004, and “informal" interviews”.   However, the Court did not consider that the failure to make a recording infringed Intel’s rights of defence such that it was capable of leading to annulment of the Commission’s decision.

The message from the Court of Justice is that the Commission cannot rely on a formalistic approach to the analysis of loyalty rebates under Article 102.  It provides some reassurance of the importance of an effects-based approach, backed up by robust economic evidence and analysis.

Case C-413/14 P - Intel Corporation Inc.v European Commission (ECLI:EU:C:2017:632)