Reed Smith Client Alerts

In a recent judgment, the Court of Justice of the European Union (CJEU) has quashed the judgment of the European Court of First Instance (CFI) which upheld the European Commission’s € 1.06 billion fine on Intel for abusing its market dominance in computer processors by using rebates which were conditional on customers purchasing all or most of their requirements from Intel.

Authors: Edward S. Miller

The Commission and the CFI considered that the mere fact that Intel was a dominant supplier, and used rebates conditional on customer exclusivity, was enough to establish the infringement of abuse of dominance and trigger the substantial fine. The CJEU disagreed. It held that in such a case, it was also necessary to consider whether the conduct in question was, in all the circumstances, capable of actually restricting competition and foreclosing the market. This required consideration of:

  • the extent of the undertaking’s dominant position;
  • the share of the market covered by the alleged restrictive practice;
  • the conditions and arrangements for granting the rebates, as well as their duration and amount; and
  • whether the rebates constituted a strategy aiming to exclude from the market competitors who were at least as efficient as the dominant undertaking – the ‘as efficient competitor’ (AEC) test.