ECJ refers €1.06 billion Intel case back to the General Court

In its judgment (available here), the ECJ held that the General Court had erred in failing to take into consideration Intel's submissions in relation to alleged errors in the as efficient competitor test undertaken by the Commission. The ECJ has referred the case back to the General Court for it to undertake a review of this evidence. Intel was unsuccessful with grounds of appeal relating to the Commission's jurisdiction and alleged procedural irregularities.

The judgment confirms that Article 102 is not intended to ensure that competitors less efficient than the dominant undertaking should remain in the market.  Therefore it is recognised that competition on the merits by a dominant company may lead to the departure from the market or the marginalisation of less efficient competitors.

Accordingly, the focus of Article 102 as regards pricing practices is on conduct which has an exclusionary effect on competitors considered to be "as efficient". Therefore, the ECJ states that where an undertaking submits evidence that the conduct in question was not capable of restricting competition, the Commission is required to "assess the possible existence of a strategy aiming to exclude competitors that are at least as efficient as the dominant undertaking from the market". This implies that the Commission would need to assess the evidence submitted by the undertaking and undertake an assessment of whether the conduct in question was capable of excluding an as efficient competitor.

This analysis is also relevant to any assessment of whether conduct may be objectively justified. The ECJ notes that this assessment, which requires a balancing of whether any anti-competitive effects may be outweighed by pro-competitive effects/efficiencies which benefit consumers, can only be carried out after "an analysis of the intrinsic capacity [of the conduct] to foreclose competitors which are at least as efficient as the dominant undertaking". Where this analysis has been undertaken (as was the case in Intel), the General Court is required to examine all of the arguments submitted by the parties in relation to the validity of the Commission's findings.

The ECJ's judgment therefore confirms that, at least if evidence is submitted by the undertaking that its conduct was not capable of restricting competition, it is necessary for regulators to carry out an assessment of whether rebate schemes (and, it would seem to follow, other alleged abuses) operated by dominant undertakings are capable of foreclosing as efficient competitors in order to establish that scheme in question constitutes an abuse of a dominant position.