The dispute between the European Commission and Intel regarding the EUR 1.06 billion fine – at the time a record-breaking amount imposed on any single company – has been going on since 2009 and is now entering a new round: The judgment handed down by the European Court of Justice (ECJ) marks a rewriting of the rules for fines in anti-trust proceedings.

What happened so far: According to the Commission, Intel was, in the period 2002 to 2007, abusing its dominant position on the world market for x86 processors by giving rebates to four leading computer manufacturers in return for them procuring (nearly) all x86 processors from Intel. What is more, Intel made direct payments to an electronics retailer to ensure they would exclusively sell computers containing Intel processors. The competition authorities considered this an abusive strategy on the part of the company (which, with a market share of roughly 70%, had a dominant position) aimed at driving the only serious competitor out of the market.

Intel brought an action against the Commission’s decision before the General Court of the European Union, seeking the annulment of the Commission’s decision. The General Court dismissed the action in 2014, but failed to consider the objections raised by Intel, according to which the Commission had committed errors in examining the anticompetitive effects of the rebates at issue. Intel then seized the ECJ.

Already in October 2016, the Advocate General in charge of the case showed understanding for most of the arguments put forward by Intel and recommended the case to be referred back to the General Court. Now, almost a year later, this has come to pass.

The ECJ confirmed the Commission’s view that the loyalty rebates granted by an undertaking in a dominant position were, by their very nature, capable of restricting competition (suspected abuse). However, if a dominant undertaking argues in proceedings that the rebates were not capable of restricting competition and thus to squeeze as efficient competitors (AECs) out of the market, the Commission has to examine such arguments and must, where applicable, provide evidence that the conduct shown was in actual fact capable of producing the incriminated effect. Now, it is the turn of the General Court again.

The EJC’s judgment is highly significant for all Commission proceedings currently pending or envisaged in future. The bar has been raised for the competition authorities in Brussels when it comes to the burden of proof for the abusive effect of rebates. It is now necessary to prove the specific potential effects of restrictions of competition and measures aimed at forcing competitors out of the market. The AEC line of defence has been given a new lease of life. Similar issues are already being raised in proceedings against Google and Qualcomm.