Most Read Contributor in Netherlands, February 2017
If it were up to Advocate General Wahl, the General Court would
need to reassess its qualification of exclusivity rebates granted
by computer chips producer Intel as per se unlawful. According to
the AG, the General Court was wrong to create a 'super
category' of rebates which by its very nature is abusive.
Instead, all the circumstances of the case should be taken into
account when assessing whether a rebate granted by a dominant
company constitutes an abuse under Article 102 TFEU. The AG
suggested that a more effects-based approach would provide dominant
companies greater leeway when granting rebates to their customers.
Still, it remains to be seen whether the European Court of Justice
will favour the same approach on appeal.
The European Commission imposed a fine of EUR 1.06 billion on Intel
for excluding competitors from the market for x86 central
processing units (CPUs). The Commission found that Intel had abused
its dominant position on this market by, among other things,
granting rebates to computer manufacturers and to a European
retailer on condition that they bought all, or almost all, their
x86 CPUs from Intel. On appeal, the General Court distinguished
between three categories of rebates: (i) volume-based rebates, (ii)
exclusivity rebates, and (iii) fidelity-inducing rebates. According
to the General Court, once a rebate qualifies as an exclusivity
rebate, there is no longer a need to consider all the circumstances
to verify that the conduct is capable of restricting competition.
That capability can then be assumed. Since Intel's conditional
rebates constituted exclusivity rebates, the Commission no longer
had to assess the circumstances of the case to establish that the
rebates actually or potentially had the effect of foreclosing
competitors from the market. The General Court therefore upheld the
In his opinion, Advocate General Wahl disagreed with
the General Court's conclusion that exclusivity rebates
constitute a separate type of rebates which are per se abusive.
According to the AG, only two types of rebates follow from European
case law: (i) volume-based rebates, and (ii) loyalty-rebates.
Volume-based rebates are presumed lawful unless a full examination
of their actual or potential effects proves otherwise.
Loyalty-rebates are presumed unlawful. However, to determine
whether a loyalty-inducing rebate constitutes an abuse, all the
circumstances of the case will first need to be examined to
ascertain whether the rebate is capable of anticompetitive
foreclosure. That capability should show that the rebate does not
just have ambivalent effects on the market or only produces
ancillary restrictive effects. Instead, it should confirm the
rebate's presumed restrictive effects. Without that
confirmation, a full-fledged analysis has to be performed. The AG
considered that the General Court also erred in the assessment of
this capability by failing to establish, on the basis of all the
circumstances, that the rebates offered by Intel had, in all
likelihood, an anticompetitive foreclosure effect.
The AG therefore recommends that the European Court of Justice
refer the case back to the General Court for an examination of all
the circumstances of the case and, if necessary, the actual or
potential effect of Intel's conduct on competition within the
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