What is it about?
Intel had granted loyalty rebates to various computer manufacturers (OEMs) in return for their agreeing to purchase 80-100% of their requirements of x86 CPUs. The Commission had imposed a fine of EUR 1.06 billion on Intel for abuse of dominance. Before the Court the issue was whether the rebates were automatically unlawful under Article 102 of the Treaty on the Functioning of the EU, or whether the Commission was first required to assess their potential exclusionary effects.
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Why is it important?
Intel had appealed the Commission decision to the General Court, but its appeal was dismissed. The General Court had proposed a novel three-fold categorisation of rebates, with 'exclusivity' rebates being treated as presumptively unlawful without any need to consider their potential foreclosure effects (relying on the 1979 judgment in Hoffmann-La Roche). The Court of Justice rejected this approach, and found a way round Hoffmann-La Roche, without explicitly overruling it.
Perspectives
The judgment has been widely seen as heralding a move to a more economics-based approach to the assessment of loyalty rebates (and to questions of abuse of dominance more generally). To some extent this is true, but the judgment of the Court of Justice can also be seen as a fudge, and a missed opportunity to provide a comprehensive restatement of the law in this area.
Mr Mark W Friend
Allen and Overy
Read the Original
This page is a summary of: LOYALTY REBATES AND ABUSE OF DOMINANCE, The Cambridge Law Journal, March 2018, Cambridge University Press,
DOI: 10.1017/s0008197318000193.
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