Case T-286/09 Intel v Commission: Exclusivity rebates and abuse of a dominant position

Right then, folks, brace yourselves…. The much awaited judgment of the General Court in Case T-286/09 Intel v Commission EU:T:2014:472 came out today.

It’s a whopper ! 255 pages. Summarising it is reminds me of Monty Python’s sketch of the “Summarising Proust Competition“. The Court has taken the trouble to publish extracts or highlights. But even the abridged version is quite long.

There’s a lot in the judgment: substantive law, procedure, evidence, international jurisdiction….Far too much to deal with in a single post so we’ll have several instalments. Today’s will be just a basic summary and introduction.

In short, the Commission wins. And wins everything. 

The Commission adopted a huge, 500 page, decision in 2009 finding that Intel had committed various abuses of its dominant position as a maker of x86 computer processing chips. It imposed a stonking fine – over €1 billion – the largest ever on a single undertaking. Here’s a summary of the decision.

The Commission’s mercifully short press release on the decision is here.

What the Commission found that Intel had done was basically this:

  • Intel gave exclusivity rebates to 4 big computer manufacturers (Dell, Lenovo, HP and NEC) – rebates on condition they bought all or nearly all their processors from Intel
  •  Intel paid a big retailer (Media Saturn) to sell exclusively computers with Intel processors
  • Intel paid 3 computer manufacturers (HP, Acer and Lenovo) to postpone or cancel the launch of their computers containing processors made by a smaller rival manufacturer (AMD).

Intel then challenged the decision before the General Court. And lost.

The General Court upheld all of the Commission’s findings that Intel had abused its dominant position. It also, in the exercise of its unlimited jurisdiction, upheld the amount of the fine.

The Court held that the exclusivity rebates – because they are granted by a dominant firm – are by their nature capable of restricting competition and foreclosing competitors from the market.  Thus the Commission did not need to show the actual or potential effects of those rebates.

The payments to the retailer were also an abuse because they were subject to an exclusivity condition.

The Court held that the payments made to HP, Acer and Lenovo to postpone the launch of products using the chips of a rival were also abusive because they pursued an anti-competitive object by making market access by AMD, the rival, more difficult.

As to the nature of the evidence that the Commission had adduced, the Court held that it was convincing, probative and showed the existence of abuses of a dominant position to the requisite standard. In order to try to appeal proof the judgment, the Court undertook a detailed case by case review of both the rebates and the conditional payments and held that “even supposing that the Commission was required to show on a case by case basis that the exclusivity rebates and payments granted to Dell, HP, Lenovo and Media-Saturn were capable of restricting competition, the Commission demonstrated that capability to the requisite legal standard in its analysis of the facts of the case.” 

Intel had claimed that the amount of the fine was too high. The Court rejects that claim and points out (there is a hint of sarcasm in the judgment) that the level of the fine was at the lower end of the scale as it had been set at a proportion of  5 % of the value of the sales concerned by the abuses while the Guidelines allow a sum which goes up to 30% of sales. The Court also pointed out that the fine represents roughly 4.15% of Intel’s turnover, far below the maximum ceiling of 10%.

That’s it for now. Lots more to follow….

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s