Case C‑413/14 P

Intel Corp. Inc.

v

European Commission

(Appeal — Article 102 TFEU — Abuse of a dominant position — Loyalty rebates — Commission’s jurisdiction — Regulation (EC) No 1/2003 — Article 19)

Summary — Judgment of the Court (Grand Chamber), 6 September 2017

Appeal—Appeal held to be founded—Judgment to be given on the substance by the appeal court—Condition—State of the proceedings must permit final judgment to be given—Condition not met—Case referred back to the General Court

Competition—Administrative procedure—Observance of the rights of the defence—Access to the file—Scope—Refusal to communicate a document—Consequences—Need to draw a distinction, in relation to the burden of proof borne by the undertaking concerned, between incriminating and exculpatory documents

Statements relating to the subject-matter of an investigation –Commission’s obligation to record, in a form of its choosing, any interview which it conducts (Council Regulation No 1/2003, Art. 19(1); Commission Regulation No 773/2004, Art. 3(1) and (3))

The EU competition rules set out in Articles 101 and 102 TFEU are intended to prevent collective or unilateral conduct of undertakings limiting competition within the internal market. While Article 101 TFEU prohibits agreements and practices which have as their object or effect the prevention, restriction or distortion of competition within the internal market, Article 102 TFEU prohibits the abuse of a dominant position within the internal market or in a substantial part of it. As regards the application of Article 101 TFEU, the fact that an undertaking participating in an agreement is situated in a third country does not prevent the application of that provision if that agreement is operative on the territory of the internal market. Moreover, in order to justify the application of the implementation test, if the applicability of prohibitions laid down under competition law were made to depend on the place where the agreement, decision or concerted practice was formed, the result would obviously be to give undertakings an easy means of evading those prohibitions. The qualified effects test pursues the same objective, namely preventing conduct which, while not adopted within the EU, has anticompetitive effects liable to have an impact on the EU market. The qualified effects test can therefore serve as a basis for the Commission’s jurisdiction. Thus, the qualified effects test allows the application of EU competition law to be justified under public international law when it is foreseeable that the conduct in question will have an immediate and substantial effect in the European Union. It is necessary to examine the conduct of the undertaking or undertakings in question, viewed as a whole, in order to determine whether the Commission has the necessary jurisdiction to apply, in each case, EU competition law. In that regard, it is sufficient to take account of the probable effects of conduct on competition in order for the foreseeability criterion to be satisfied. First, since the dominant undertaking’s conduct vis-à-vis a computer manufacturer formed part of an overall strategy intended to ensure that no notebook produced by that manufacturer equipped with a competitor’s CPU would be available on the market, including in the European Economic Area (EEA), the dominant undertaking’s conduct was capable of producing an immediate effect in the EEA. Secondly, faced with an overall strategy, such as that adopted by that undertaking vis-à-vis the computer manufacturer, aimed at foreclosing a competitor’s access to the most important sales channels, it was appropriate to take into consideration the conduct of the undertaking viewed as a whole in order to assess the substantial nature of its effects on the market of the EU and of the EEA. To do otherwise would lead to an artificial fragmentation of comprehensive anticompetitive conduct, capable of affecting the market structure within the EEA, into a collection of separate forms of conduct which might escape the European Union’s jurisdiction. (see paras 42-46, 49-52, 55-57)

See the text of the decision. (see paras 63, 64, 105, 106)

In the context of administrative proceedings in relation to the competition rules, it is apparent from the wording of Article 19(1) of Regulation No 1/2003 that that provision is intended to apply to any interview conducted for the purpose of collecting information relating to the subject matter of an investigation. Recital 25 of Regulation No 1/2003 states, in that respect, that that regulation is intended to supplement the Commission’s powers of investigation by, inter alia, empowering the latter to interview any persons who may be in possession of useful information and to record the statements made. Article 19(1) of Regulation No 1/2003 therefore constitutes a legal basis empowering the Commission to interview a person in the context of an investigation, which is confirmed by the travaux préparatoires for that regulation. There is nothing in the wording of that provision or in the objective that it pursues to suggest that the legislature intended to establish a distinction between two categories of interview relating to the subject matter of an investigation or to exclude certain of those interviews from the scope of that provision. The General Court therefore erred in considering that a distinction had to be made, among the interviews conducted by the Commission in the context of an investigation, between formal interviews subject to Article 19(1) of Regulation No 1/2003 in conjunction with Article 3 of Regulation No 773/2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 [EC], and informal interviews falling outside the scope of those provisions. (see paras 84-88)

In the context of administrative proceedings in relation to the competition rules, Article 3(1) of Regulation No 773/2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 [EC], which provides that the Commission is also to inform the person interviewed of its intention to make a record of the interview, must be understood as meaning, not that the recording of the interview is optional, but that the Commission is required to warn the person concerned of its intention to record it. Article 3(3) of Regulation No 773/2003, which states that the Commission may record the statements made by the persons interviewed in any form, implies that, if the Commission decides, with the consent of the person interviewed, to carry out such an interview on the basis of Article 19(1) of Regulation No 1/2003, it must record the interview in full, without prejudice to the fact that the Commission is free to decide on the type of recording. It follows that the Commission is required to record, in a form of its choosing, any interview which it conducts, under Article 19 of Regulation No 1/2003, for the purpose of collecting information relating to the subject matter of an investigation. (see paras 89-91)

See the text of the decision. (see para. 94)

See the text of the decision. (see paras 96-101)

See the text of the decision. (see paras 133-137)

As regards competition, it is in no way the purpose of Article 102 TFEU to prevent an undertaking from acquiring, on its own merits, the dominant position on a market. Nor does that provision seek to ensure that competitors less efficient than the undertaking with the dominant position should remain on the market. Thus, not every exclusionary effect is necessarily detrimental to competition. Competition on the merits may, by definition, lead to the departure from the market or the marginalisation of competitors that are less efficient and so less attractive to consumers from the point of view of, among other things, price, choice, quality or innovation. However, a dominant undertaking has a special responsibility not to allow its behaviour to impair genuine, undistorted competition on the internal market. That is why Article 102 TFEU prohibits a dominant undertaking from, among other things, adopting pricing practices that have an exclusionary effect on competitors considered to be as efficient as it is itself and strengthening its dominant position by using methods other than those that are part of competition on the merits. Accordingly, in that light, not all competition by means of price may be regarded as legitimate. In that regard, the Court has already held that an undertaking which is in a dominant position on a market and ties purchasers — even if it does so at their request — by an obligation or promise on their part to obtain all or most of their requirements exclusively from that undertaking abuses its dominant position within the meaning of Article 102 TFEU, whether the obligation is stipulated without further qualification or whether it is undertaken in consideration of the grant of a rebate. The same applies if the undertaking in question, without tying the purchasers by a formal obligation, applies, either under the terms of agreements concluded with these purchasers or unilaterally, a system of loyalty rebates, that is to say, discounts conditional on the customer’s obtaining all or most of its requirements — whether the quantity of its purchases be large or small — from the undertaking in a dominant position. However, that case-law must be further clarified in the case where the undertaking concerned submits, during the administrative procedure, on the basis of supporting evidence, that its conduct was not capable of restricting competition and, in particular, of producing the alleged foreclosure effects. In that case, the Commission is not only required to analyse, first, the extent of the undertaking’s dominant position on the relevant market and, secondly, the share of the market covered by the challenged practice, as well as the conditions and arrangements for granting the rebates in question, their duration and their amount; it is also 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. The analysis of the capacity to foreclose is also relevant in assessing whether a system of rebates which, in principle, falls within the scope of the prohibition laid down in Article 102 TFEU, may be objectively justified. In addition, the exclusionary effect arising from such a system, which is disadvantageous for competition, may be counterbalanced, or outweighed, by advantages in terms of efficiency which also benefit the consumer. That balancing of the favourable and unfavourable effects of the practice in question on competition can be carried out in the Commission’s decision only after an analysis of the intrinsic capacity of that practice to foreclose competitors which are at least as efficient as the dominant undertaking. If, in a decision finding a rebate scheme abusive, the Commission carries out such an analysis, the General Court must examine all of the dominant undertaking’s arguments seeking to call into question the validity of the Commission’s findings concerning the foreclosure capability of the rebate concerned. In this case, while the Commission emphasised, in the decision at issue, that the rebates at issue were by their very nature capable of restricting competition such that an analysis of all the circumstances of the case and, in particular, an AEC (as efficient competitor) test were not necessary in order to find an abuse of a dominant position, it nevertheless carried out an in-depth examination of those circumstances, setting out a very detailed analysis of the AEC test, which led it to conclude that an as efficient competitor would have had to offer prices which would not have been viable and that, accordingly, the rebate scheme at issue was capable of having foreclosure effects on such a competitor. It follows that, in the decision at issue, the AEC test played an important role in the Commission’s assessment of whether the rebate scheme at issue was capable of having foreclosure effects on as efficient competitors. In those circumstances, the General Court was required to examine all of the dominant undertaking’s arguments concerning that test. It held, however, that it was not necessary to consider whether the Commission had carried out the AEC test in accordance with the applicable rules and without making any errors, and that it was also not necessary to examine the question whether the alternative calculations proposed by the dominant undertaking had been carried out correctly. The General Court therefore attached no importance to the AEC test carried out by the Commission and, accordingly, did not address the dominant undertaking’s criticisms of that test. Consequently, in its analysis of whether the rebates at issue were capable of restricting competition, the General Court wrongly failed to take into consideration the dominant undertaking’s line of argument seeking to expose alleged errors committed by the Commission in the AEC test. (see paras 133-147)