Pascale Déchamps and Gunnar Niels  ‘The One Billion Euro Question for Intel: Moore’s Law or Murphy’s Law?’ (2018) Journal of European Competition Law & Practice 9(2) 124

This paper – which can be found here – is structured as follows: It begins by recalling the context of the Intel case.  In the past, EU case law tended to follow a form-based approach: first determine dominance; then assess the form of the conduct. Once a company was found to be dominant, its ‘special responsibility’ not to impair competition meant that it could not engage in certain forms of behaviour, such as offering loyalty rebates. Little consideration was given to the likely effects of these practices on competition and consumer welfare in a given case. The Intel case, however, came after the Commission started promoting effects-based analysis in abuse of dominance cases. The idea was that practices that have the same effect on the market should be treated in the same way, regardless of their form. This took the form of a Guidance Paper, which was followed by a series of Commission cases and EU court judgments that ranged…

Mark Friend ‘Loyalty Rebates and Abuse of Dominance’ (2018) The Cambridge Law Journal 77(1) 25

This paper – which can be found here – argues that the Intel decision should be given a cautious welcome for signalling a move to a more economics-based approach in the assessment of loyalty rebates. On the other hand, the author thinks that the decision also represents a missed opportunity to provide a comprehensive analytical framework for one of the more unsatisfactory areas of EU competition law. The author begins by describing the EU case law on rebates. In line with AG Wahl’s Opinion, the author identifies two main strands in the case law: Since Michelin II, it has been clear that quantity rebates or discounts – linked solely to volumes purchased from the dominant undertaking – are generally considered not to give rise to foreclosure effects and are presumptively lawful. On the other hand, loyalty rebates have consistently been condemned ever since Hoffmann-La Roche. This case held that a dominant company will be guilty of an abuse whenever that…

When is a rebate prima facie anticompetitive? Case C‑413/14 P Intel v Commission ECLI:EU:C:2017:632

This piece reviews the Court of Justice’s decision by the Grand Chamber in Intel (Case C‑413/14 P Intel v Commission ECLI:EU:C:2017:632), which can be found at http://curia.europa.eu/juris/liste.jsf?num=C-413/14. The facts of the case are relatively straightforward. Intel sells x86 CPUs processors. The x86 architecture is a standard designed by Intel for its CPUs, and can run both Windows and Linux operating systems. The European Commission found that Intel had engaged in two abusive conducts concerning these processers intended to exclude a competitor, AMD, from the market for x86 CPUs; and imposed a EUR 1.06 billion fine. The first conduct consisted in the grant of rebates to four original equipment manufacturers (‘OEMs’), namely Dell, Lenovo, HP and NEC. These rebates were conditional on these OEMs purchasing all or almost all of their x86 CPUs from Intel. The second conduct consisted in making payments to OEMs so that they would delay, cancel or restrict the marketing of certain products equipped with AMD CPUs….

Luis Ortiz Blanco and Jose Luis Azofra Parrondo ‘The Intel Case: Issues of Economic Analysis, Comity and Procedural Fairness’

According to the authors of this short pirce – which can be found here – the Intel judgment addresses three main issues: (i) the role that economic analysis – and the as-efficient-competitor test – should play in the context of abuses of dominant position in general, and loyalty rebates in particular; (ii) the jurisdiction of the European Commission and international comity; and (iii) procedural fairness and the rights of the defence. Looking at each in turn: The As-Efficient-Competitor (AEC) Test – This part of the paper describes the facts of the case and outlines the Court’s reasoning. For the authors, the main doubt concerning this judgment is: ‘whether the Court has willingly or unwillingly opened the door to an obligation to drive thorough economic analysis in all abuse-related cases without exception’. The Commission decided – and the General Court agreed – that Intel’s rebates were by their very nature capable of restricting competition. This was based on the EU Courts’…

Kevin Coates  ‘The Intel CJ Ruling: More Than a Nudge towards Economic Analysis’

Even though this (very short) reaction piece – which can be found here – focuses mainly on the procedural part of the judgment, it also comments on more substantive matters. As regards extraterritoriality, he notes that AG Wahl had argued that it should be unlawful to bring together conduct which could have had no effect in the EU (e.g. a contract between Intel and an OEM in Asia, with products destined for Asia), with conduct that could have EU effects (e.g. a contract with products destined for the EU). The Court disagreed: the “conduct … viewed as a whole” should be taken into consideration to avoid “an artificial fragmentation of comprehensive anticompetitive conduct”. As regards the treatment of exclusive rebates, he argues that we have learned less than many had hoped. On the one hand, the CJEU seems to be making a procedural point: if the Commission relied on economic evidence, then the General Court should examine it. But other…

When is Price Discrimination Anticompetitive? Case C-525/16 MEO v Portuguese Authority ECLI:EU:C:2018:2700

This post reviews the recent MEO decision of the CJEU (Case C-525/16 MEO v Portuguese Authority ECLI:EU:C:2018:2700, available at http://curia.europa.eu/juris/document/document.jsf?text=&docid=201264&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=826760). You will excuse me for the length of the analysis below, but I do believe this is an important discussion that merits attention. Facts of the Case GDA is the sole body responsible for the collective management of the rights of artists and performers in Portugal. Among the undertakings which pay rights to GDA are television channels such as MEO. Between 2010 and 2013, GDA charged different tariffs to different television channels. The tariffs charged by GDA to MEO were the result of an arbitration decision, which was the required mechanism to deal with failures to arrive at an agreement when rights are negotiated. In 2014, MEO lodged a complaint with the Portuguese national competition authority (NCA) alleging that GDA had abused its dominant position by: (i) charging excessive prices; (ii) applying to MEO different terms and conditions from those which it…

Christopher Townley, Eric Morrison and Professor Karen Yeung ‘Big Data and Personalised Price Discrimination in EU Competition Law (2017) Yearbook of European Law 36 683

This paper – which can be found here – seeks to determine whether ‘algorithmic consumer price discrimination’ can amount to an abuse of a dominant position. It is structured as follows: Section 2 explains how ‘big data’ allows for greater personalisation of prices, and how recourse to digital algorithms facilitates personalised pricing. The paper seeks to identify whether ‘algorithmic consumer price discrimination’ enhances or diminishes economic efficiency. To do so, the paper reviews, in detail, the main economic theories on price discrimination, which have already been summarised when describing the paper reviewed in the post below. The authors observe that price discrimination can have rent-transfer effects (from consumers to producers), allocation effects (reflecting consumers’ willingness to acquire the product) and output effects (by pricing some consumers into the markets and/or out of the market). Which of these effects predominates in imperfectly competitive markets is a very hard question. Ultimately, the effects of price discrimination will have to be assessed on a…

Inge Graef  ‘Algorithms and fairness: what role for competition law in targeting price discrimination towards end consumers?’

This paper – which can be found here –  tries to identify when algorithmic price discrimination will be anticompetitive. Price discrimination is not per se unlawful or anticompetitive; on the contrary, price discrimination  may be efficient and lead to increased output. However, personalised pricing is commonly felt to be unfair – and it is undisputed (in Europe, at least) that some forms of price discrimination can be anticompetitive. This paper seeks to distinguish between those situations when algorithmic price discrimination is anticompetitive and those in which it is not. The paper is structured as follows: Section 2 looks at how price discrimination can harm competition. Two types of harm are identified: (i) primary line injury occurs where the supplier’s conduct discriminates against competitors in markets in which the supplier also operates; and (ii) secondary line injury takes place when a supplier discriminates between a number of its customers as against one another. While behaviour giving rise to primary line injury…

Friso Bostoen ‘Margin Squeeze – Where competition law and sector regulation compete’ (2017) 53 Jura Falconis 3

This paper – which you can find here – provides an overview of margin squeeze as an antitrust infringement – i.e. the situation where a dominant undertaking charges “a price for the product on the upstream market which, compared to the price it charges on the downstream market, does not allow even an equally efficient competitor to trade profitably in the downstream market on a lasting basis”. The paper also looks at the relationship between margin squeeze and sectoral regulation. The article starts with an overview of the different ways an undertaking can abuse its dominant position through pricing (chapter 2). It then defines margin squeeze (chapter 3), before looking at how margin squeeze is assessed in a number of EU cases (chapter 4) and into the role of the as-efficient-competitor test in identifying margin squeeze situations (chapter 5). It then discusses why some undertakings appear to be more susceptible to commit this abuse than others, and lists the traits such…

Asda Stores Ld & Ors v MasterCard 2017 EWHC 93 (Comm)

This decision – available here – concerns a standalone claim for damages against MasterCard brought before the English courts. As some of you will know, disputes over the legality of Multilateral Interchange Fees (MIFs) and various payment card-schemes has been ongoing for well over a decade.  In the US, it included a decision on the legality of the American Express System which has found its way to the Supreme Court docket. In this case, which follows a decision by the European Commission – but is not a follow on claim since the practices in question, while similar, are not the same ones that were subject to the Commission’s decision – the English courts had to decide whether the level at which MasterCard set its MIFs was illegal, and hence whether damages are due. You may be pleased to hear that the decision is long and complicated – if nothing else, because it conducts an in-depth effects based assessment that hinges…