OPINION OF ADVOCATE GENERAL

WAHL

delivered on 20 October 2016 ( 1 )

Case C‑413/14 P

Intel Corporation Inc.

v

European Commission

(Appeal – Article 102 TFEU – Abuse of dominant position – Loyalty rebates – Classification as abuse – Applicable legal test – Single and continuous infringement – Rights of the defence – Article 19 of Regulation (EC) No 1/2003 – Interview relating to the subject matter of an investigation – Jurisdiction of the Commission – Implementation – Effects)

Table of contents

I – Legal framework II – Background to the proceedings III – Procedure before the General Court and the judgment under appeal IV – Procedure before the Court and forms of order sought V – Assessment of the grounds of appeal A – Introductory remarks B – The first ground of appeal: the legal test to be applied to so-called ‘exclusivity rebates’ 1. The main arguments of the parties 2. Analysis (a) The principal assessment of the appellant’s rebates and payments carried out by the General Court i) The basic tenets of the Court’s case-law regarding rebates ii) The circumstances of the case as a means to determine whether the impugned conduct has a likely effect on competition iii) There are only two categories of rebates according to the case-law – An assumption of unlawfulness by virtue of form cannot be rebutted – Loyalty rebates are not always harmful – The effects of loyalty rebates are context-dependent – Related practices require consideration of all the circumstances iv) Intermediate conclusion (b) The alternative assessment of capability carried out by the General Court i) Capability and/or likelihood ii) The factors considered by the General Court to support a finding of abuse iii) Other circumstances – Market coverage – Duration – Market performance of the competitor and declining prices – The AEC test (c) Conclusion C – The second ground of appeal: market coverage in determining whether an undertaking has abused its dominant position 1. The main arguments of the parties 2. Analysis D – The third ground of appeal: classification of certain rebates as ‘exclusivity rebates’ 1. The main arguments of the parties 2. Analysis E – The fourth ground of appeal: rights of the defence 1. The main arguments of the parties 2. Analysis (a) The meeting in question was an interview within the meaning of Article 19 of Regulation No 1/2003 (b) The note to the file did not cure the procedural error (c) The consequence of the failure to record the meeting in question F – The fifth ground of appeal: jurisdiction 1. The main arguments of the parties 2. Analysis (a) General remarks: implementation and/or effects? (b) Assessment of the application of the relevant jurisdictional criteria by the General Court i) Implementation ii) ‘Qualified’ effects G – The sixth ground of appeal: the amount of the fine 1. The main arguments of the parties 2. Analysis VI – Consequences of the assessment VII – Conclusion

1. By this appeal, Intel Corporation (‘Intel’ or ‘the appellant’) asks the Court to set aside the judgment of 12 June 2014 in Intel v Commission, ( 2 ) by which the General Court dismissed its action for annulment of Commission Decision C(2009) 3726 final of 13 May 2009 relating to a proceeding under Article 82 [EC] (now Article 102 TFEU) and Article 54 of the EEA Agreement (Case COMP/C‑3/37.990 — Intel) (‘the decision at issue’). ( 3 )

2. The case raises a number of important questions of principle. Those questions include the application of the concept of ‘single and continuous infringement’ in the context of what is now Article 102 TFEU, the discretion the Commission ought to have in recording the interviews it conducts during its investigations and the scope of the Commission’s jurisdiction to conduct investigations of infringements originating abroad.

3. In addition, the case offers the Court an opportunity to refine its case-law relating to the abuse of a dominant position under Article 102 TFEU. More specifically, the question arises as to whether, in the light of the line of authority devolving from Hoffmann-La Roche, ( 4 ) it is warranted to draw a distinction between different types of rebates. Taking account of that case-law, the Court must determine the correct legal test to be applied in relation to a particular category of rebates, which the General Court termed as ‘exclusivity rebates’ in the judgment under appeal.

4. In particular, the Court is called upon to decide whether the General Court was right to consider that rebates of the kind at issue in the present case are inherently anticompetitive. The inherently anticompetitive nature of those rebates would render it unnecessary to consider all the circumstances of the case in order to determine whether the conduct in question is, in actual fact, capable of restricting competition in a particular market.

I – Legal framework

5. Recital 25 of Regulation (EC) No 1/2003 ( 5 ) explains that the Commission should in particular be empowered to interview any persons who may be in possession of useful information and to record the statements made.

6. Article 19 of the regulation concerns the power of the Commission to take statements. Paragraph 1 thereof states: ‘In order to carry out the duties assigned to it by this Regulation, the Commission may interview any natural or legal person who consents to be interviewed for the purpose of collecting information relating to the subject-matter of an investigation.’

7. Article 27(2) of that regulation provides: ‘The rights of defence of the parties concerned shall be fully respected in the proceedings. They shall be entitled to have access to the Commission's file, subject to the legitimate interest of undertakings in the protection of their business secrets. The right of access to the file shall not extend to confidential information and internal documents of the Commission or the competition authorities of the Member States...’

8. Recital 3 of Regulation (EC) No 773/2004 ( 6 ) explains that, when the Commission conducts interviews, the persons interviewed ought to be informed of the purpose of the interview and of any record which may be made.

9. Article 3 of that regulation concerns the Commission’s power to take statements. It provides: ‘1. Where the Commission interviews a person with his consent in accordance with Article 19 of Regulation [No 1/2003], it shall, at the beginning of the interview, state the legal basis and the purpose of the interview, and recall its voluntary nature. It shall also inform the person interviewed of its intention to make a record of the interview. 2. The interview may be conducted by any means including by telephone or electronic means. 3. The Commission may record the statements made by the persons interviewed in any form. A copy of any recording shall be made available to the person interviewed for approval. Where necessary, the Commission shall set a time-limit within which the person interviewed may communicate to it any correction to be made to the statement.’

II – Background to the proceedings

10. The background to the dispute, as set out in the judgment under appeal, may be summarised as follows.

11. Intel is a US-based company that designs, develops, manufactures and markets central processing units (‘CPUs’), ‘chipsets’, and other semiconductor components, as well as platform solutions for data processing and communications devices.

12. On 18 October 2000, Advanced Micro Devices (‘AMD’) submitted a formal complaint to the Commission pursuant to Regulation No 17, ( 7 ) which it supplemented with new facts and allegations, in the context of a supplementary complaint of 26 November 2003.

13. In May 2004, the Commission launched investigations focusing on allegations contained in AMD’s supplementary complaint.

14. On 17 July 2006, AMD lodged a complaint with the Bundeskartellamt (Federal Cartel Office, Germany), in which it claimed that Intel had engaged inter alia in exclusionary marketing arrangements with Media-Saturn-Holding GmbH (‘MSH’), a European retailer of microelectronic devices and the largest desktop computer distributor in Europe. The Federal Cartel Office exchanged information with the Commission on that subject.

15. On 23 August 2006, the Commission held a meeting with a senior executive, Mr D1, of Dell Inc., a customer of Intel. ( 8 ) The Commission did not place the indicative list of topics for the meeting in the case file and did not take minutes of it. A member of the Commission’s team responsible for the file drafted a note sometime after the meeting, which was described as internal by the Commission. On 19 December 2008, the Commission provided the appellant with a non-confidential version of that note.

16. On 26 July 2007, the Commission notified to the appellant a statement of objections (‘the Statement of Objections of 2007’) concerning its conduct vis-à-vis five major original equipment manufacturers (‘OEMs’), namely Dell, Hewlett-Packard Company (HP), Acer Inc., NEC Corp. and International Business Machines Corp. (IBM).

17. On 17 July 2008, the Commission sent the appellant a supplementary statement of objections concerning its conduct in respect of MSH and Lenovo Group Ltd (‘Lenovo’). It included new evidence on Intel’s conduct vis-à-vis some of the OEMs covered by the Statement of Objections of 2007, which had been obtained by the Commission after its publication.

18. After various procedural steps, on 13 May 2009, the Commission adopted the decision at issue in which it took the view that Intel had infringed Article 82 EC and Article 54 of the Agreement on the European Economic Area (EEA), from October 2002 until December 2007, by implementing a strategy aimed at foreclosing a competitor, AMD, from the market for x86 CPU microprocessors (‘x86 CPUs’).

19. That decision included the following considerations.

20. The products concerned are CPUs. x86 architecture is a standard designed by Intel for its CPUs. It can run both the Windows and Linux operating systems. Windows is primarily linked to the x86 instruction set. Prior to 2000, there were several manufacturers of x86 CPUs. However, most of these manufacturers have since exited the market. According to the decision at issue, Intel and AMD are essentially the only two companies still manufacturing x86 CPUs.

21. In addition, the Commission concluded in the decision at issue that the relevant product market was not wider than the market for x86 CPUs. Nevertheless, it left open the question whether there is a single x86 CPU market for all computers or whether it is necessary to draw a distinction between three separate x86 CPU markets, namely the market for desktop computers, the market for notebook computers and the market for servers. According to the decision at issue, in view of Intel’s market shares for each of those segments, the conclusion on dominance remains the same.

22. In the decision at issue, the geographical market was defined as worldwide.

23. Regarding dominance, in the 10-year period examined by the Commission (1997-2007), Intel held market shares in excess of or around 70%. Moreover, the Commission identified significant barriers to entry to and expansion within the x86 CPU market. Those barriers arise, in particular, from sunk investments in research and development, intellectual property and the production facilities that are necessary to produce x86 CPUs. On the basis of Intel’s market shares and the barriers to entry and expansion in the relevant market, the Commission concluded that Intel held a dominant position in that market at least in the period covered by the decision, that is, from October 2002 to December 2007.

24. In the decision at issue, the Commission identified two types of conduct by Intel vis-à-vis its trading partners, namely conditional rebates and so-called ‘naked restrictions’.

25. As regards the first type, Intel awarded four OEMs, namely Dell, Lenovo, HP and NEC, rebates which were conditioned on these OEMs purchasing all or almost all of their x86 CPUs from Intel. Intel also granted payments to MSH, which were conditional upon MSH selling exclusively computers containing Intel’s x86 CPUs.

26. According to the decision at issue, the conditional rebates granted by Intel are described as fidelity rebates. Regarding Intel’s conditional payments to MSH, the Commission concluded that the economic mechanism of those payments is equivalent to that of the conditional rebates to OEMs.

27. The decision at issue also proceeds to analyse in economic terms the capability of the rebates and the payments to MSH to foreclose a hypothetical competitor as efficient as Intel (as-efficient-competitor test; ‘the AEC test’). ( 9 )

28. In light of those considerations, the Commission concluded that Intel’s conditional rebates and payments induced the loyalty of the key OEMs and of MSH. The effects of these practices were complementary, significantly diminishing competitors’ ability to compete on the merits of their x86 CPUs. As a consequence, Intel’s anticompetitive conduct resulted in a reduction of consumer choice and in lower incentives to innovate.

29. As regards the second type of conduct identified in the decision at issue, namely ‘naked restrictions’, the Commission considered that Intel granted three OEMs, namely HP, Acer and Lenovo, payments which were conditional upon those OEMs postponing or cancelling the launch of AMD CPU-based products and/or putting restrictions on the distribution of those products. The Commission concluded that Intel’s conduct regarding naked restrictions harmed competition, because customers were deprived of a choice which they would otherwise have had. In the Commission’s view, that did not constitute normal competition on the merits.

30. The Commission concluded in the decision at issue that, in each instance, Intel’s conduct vis-à-vis the OEMs mentioned above and MSH constitutes an abuse under Article 102 TFEU, but that each individual abuse is also part of a single strategy aimed at foreclosing AMD, Intel’s only significant competitor, from the market for x86 CPUs. Those individual abuses are therefore part of a single infringement of Article 102 TFEU.

31. By applying the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (‘the 2006 Guidelines’), ( 10 ) the Commission imposed on the appellant a fine of EUR 1.06 billion.

32. The decision at issue provides: ‘Article 1 Intel … has committed a single and continuous infringement of Article [102 TFEU] and Article 54 of the EEA Agreement from October 2002 until December 2007 by implementing a strategy aimed at foreclosing competitors from the market of x86 CPUs which consisted of the following elements: (a) Granting rebates to Dell between December 2002 and December 2005 at a level that was conditional on Dell obtaining all of its x86 CPU supplies from Intel; (b) Granting rebates to HP between November 2002 and May 2005 at a level that was conditional on HP obtaining at least 95% of its corporate desktop x86 CPU supplies from Intel; (c) Granting rebates to NEC between October 2002 and November 2005 at a level that was conditional on NEC obtaining at least 80% of its client PC x86 CPU supplies from Intel; (d) Granting rebates to Lenovo between January 2007 and December 2007 at a level that was conditional on Lenovo obtaining all of its notebook x86 CPU supplies from Intel; (e) Granting payments to [MSH] between October 2002 and December 2007 at a level that was conditional on [MSH] selling only computers incorporating Intel x86 CPUs; (f) Granting payments to HP between November 2002 and May 2005 conditional on: (i) HP directing HP’s AMD-based x86 CPU business desktops to Small and Medium Business and Government, and Educational and Medical customers rather than to enterprise business customers; (ii) precluding HP’s channel partners from stocking HP’s AMD-based x86 CPU business desktops such that such desktops would only be available to customers by ordering them from HP (either directly or via HP channel partners acting as sales agent); and (iii) HP delaying the launch of its AMD-based x86 CPU business desktop in the [Europe, Middle East and Africa] region by six months; (g) Granting payments to Acer between September 2003 and January 2004 conditional on Acer delaying an AMD-based x86 CPU notebook; (h) Granting payments to Lenovo between June 2006 and December 2006 conditional on Lenovo delaying and finally cancelling its AMD-based x86 CPU notebooks.’

III – Procedure before the General Court and the judgment under appeal

33. By application lodged on 22 July 2009, the appellant requested the General Court to annul the decision at issue. The Association for Competitive Technology, Inc. (‘ACT’) intervened in support of Intel.

34. In the judgment under appeal, the General Court dismissed the action in its entirety.

IV – Procedure before the Court and forms of order sought

35. By its appeal, lodged with the Court on 26 August 2014, Intel claims that the Court should: — set aside in whole or in part the judgment under appeal; — annul in whole or in part the decision at issue; — cancel or substantially reduce the fine imposed; — in the alternative, refer the case back to the General Court for determination in accordance with the judgment of the Court of Justice; — order the Commission to pay the costs of these proceedings and of the proceedings before the General Court.

36. ACT has submitted a response in support of the form of order sought by the appellant.

37. The Commission contends that the Court should dismiss the appeal and order the appellant to pay the costs.

38. Intel, ACT and the Commission presented oral arguments at the hearing held on 21 June 2016.

V – Assessment of the grounds of appeal

39. The appellant relies on six grounds in support of its appeal. The first ground of appeal alleges errors in law in the legal characterisation of rebates termed as ‘exclusivity rebates’ by the General Court. The second ground of appeal alleges an error in law in the finding of an infringement in 2006 and 2007 and in the assessment of the relevance of market coverage. The third ground concerns an error in law as regards the classification as ‘exclusivity rebates’ of certain rebate arrangements that merely covered a minority of a customer’s purchases. The fourth ground of appeal alleges a procedural error resulting from an incorrect interpretation of Article 19 of Regulation No 1/2003, read in conjunction with Article 3 of Regulation No 773/2004, concerning the absence of an obligation to record an interview. The fifth ground of appeal relies on an infringement of Article 102 TFEU and concerns the Commission’s jurisdiction to apply Article 102 TFEU to the appellant’s arrangements in China with Lenovo in 2006 and 2007. Finally, the sixth ground concerns the amount of the fine arising from an error in law concerning the retroactive application of the 2006 Guidelines on the setting of fines.

40. I shall deal with all those issues in turn. Before doing so, however, I consider it useful to make some preliminary observations as regards the structure and rationale of Article 102 TFEU. Those observations constitute the starting point for the ensuing assessment of the first three grounds of appeal.

A – Introductory remarks

41. From the outset, EU competition rules have aimed to put in place a system of undistorted competition, as part of the internal market established by the EU. ( 11 ) In that regard, it cannot be overemphasised that protection under EU competition rules is afforded to the competitive process as such, and not, for example, to competitors. ( 12 ) In the same vein, competitors that are forced to exit the market due to fierce competition, rather than anticompetitive behaviour, are not protected. Therefore, not every exit from the market is necessarily a sign of abusive conduct, but rather a sign of aggressive, yet healthy and permissible, competition. ( 13 ) This is because, given its economic character, competition law aims, in the final analysis, to enhance efficiency. The importance placed on efficiency is also in my view clearly reflected in the case-law of the EU Courts.

42. From that emphasis it naturally follows that dominance as such is not considered to be at variance with Article 102 TFEU. Rather, only behaviour which constitutes an expression of market power to the detriment of competition and, thus, to consumers is prohibited and accordingly sanctioned as an abuse of dominance.

43. A logical corollary to the objective of enhanced efficiency is that the anticompetitive effects of a particular practice assume crucial importance. Irrespective of whether we are dealing with an enforcement shortcut such as that offered by the concept of ‘restriction by object’ in the context of Article 101 TFEU, ( 14 ) or with single firm conduct falling within the scope of Article 102 TFEU, EU competition rules seek to capture behaviour that has anticompetitive effects. To date, the form of a particular practice has not been deemed important.

44. In the judgment under appeal, the General Court distinguished between three categories of rebates: volume-based rebates, ‘exclusivity rebates’ and rebates that are based on a mechanism that may have a fidelity-inducing effect. Unlike a rebate scheme based purely on the volume of purchases (category 1), which reflect gains in efficiency and economies of scale, exclusivity rebate schemes (category 2), according to the taxonomy employed by the General Court, are incompatible with the objective of undistorted competition within the internal market. Such rebates are conditional on the customer obtaining all or most of its requirements from the undertaking in a dominant position. ( 15 )

45. In addition to the two previously mentioned categories of rebates, the judgment under appeal refers to a residual category of rebates which possesses a fidelity-building mechanism without being directly linked to exclusive or quasi-exclusive supply (category 3). That category includes rebates such as retroactive rebates. ( 16 ) The General Court considered that rebates belonging to category 3 should be distinguished from ‘exclusivity rebates’ on the ground that they are not directly conditional on exclusivity. For that reason, the General Court accepted that it was necessary to consider all the circumstances in order to determine whether such rebates are capable of restricting competition. ( 17 )

46. Due to the conditional character of the rebates, the General Court classified the rebates and payments offered by the appellant as ‘exclusivity rebates’. Relying on the case-law devolving from Hoffmann-La Roche, the General Court considered that, in order to determine whether the undertaking in question has abused its dominant position, it was sufficient that the rebates were ‘exclusivity rebates’ belonging to category 2. Once that was established, it was no longer necessary to consider ‘all the circumstances’ in order to verify that the conduct was capable of restricting competition. Solely on the basis of the form of the conduct, such capability could be assumed. This was so, according to the General Court, because such rebates are designed, as a rule, to remove or restrict the purchaser’s freedom to choose his sources of supply and, in that sense, to prevent customers from obtaining their supplies from competing producers. ( 18 )

47. In accordance with that methodology, the assumption that ‘exclusivity rebates’ offered by a dominant undertaking result always, and without exception, in anticompetitive foreclosure permeates the entire judgment under appeal. It is on the basis of that assumption that the relevance of context and, by way of extension, the need to consider the capability of the conduct to have anticompetitive effects was rejected by the General Court.

48. Bearing that in mind, the fate of the first, second and third grounds of appeal depends, ultimately, on whether the Court considers that assumption to be correct.

B – The first ground of appeal: the legal test to be applied to so-called ‘exclusivity rebates’

1. The main arguments of the parties

49. As its primary contention Intel, supported by ACT, claims that the General Court erred in its legal characterisation of what it termed as ‘exclusivity rebates’, that is, ‘fidelity rebates within the meaning of Hoffmann-La Roche’. ( 19 ) In its view, the General Court erred in concluding that, unlike other rebates and pricing practices, such rebates are inherently capable of restricting competition and thus are anticompetitive without any need to consider either the relevant circumstances of the rebates in question or the likelihood that the rebates might restrict competition. ( 20 ) In that context, the appellant claims that the General Court erred in upholding the finding of an abuse without considering the likelihood of anticompetitive harm. Moreover, Intel submits that, in any event, the General Court erred in its alternative finding, according to which the rebates in question in this case were capable of restricting competition. ( 21 )

50. The Commission contends that the first ground of appeal should be dismissed. It maintains, in essence, that the present ground of appeal is premised on a fallacy: that ‘exclusivity rebates’ constitute mere pricing practices. The Commission argues that ‘exclusivity rebates’ are inherently different from other pricing practices. In its view, rebates conditional on exclusivity exhibit features that render it unnecessary to verify whether they are capable of restricting competition in a specific case. The Commission considers, in particular, that the case-law of the Court regarding rebates does not lend support to the appellant’s view that no distinction ought to be drawn between ‘exclusivity rebates’ and other rebates that have a fidelity-inducing effect or, for that matter, pricing practices.

51. Regarding the alternative assessment of all the circumstances, the Commission considers that the appellant has not put forward any argument that calls into question the alternative assessment of capability carried out by the General Court in the judgment under appeal.

2. Analysis

52. The gist of the approach to the first ground lies in determining the correct legal test to be applied to so-called ‘exclusivity rebates’. In other words, the question is whether the General Court was justified in finding that there is no need to consider ‘all the circumstances’ to verify that those rebates are capable of having an anticompetitive effect. Put simply: was the General Court correct in holding that, owing to their form, not even context can save ‘exclusivity rebates’ from condemnation.

53. At the outset, contrary to what the Commission suggested in its written pleadings, I see no reason why the Court should not examine the first ground of appeal in its entirety. Under that ground, the appellant is clearly seeking to challenge errors in law which in its view vitiated the classification of Intel’s rebates and payments as ‘exclusivity rebates’ distinct from other rebates inducing loyalty. More particularly, it challenges the fact that the General Court considered it unnecessary to assess all the circumstances before coming to the conclusion that the impugned conduct amounted to an abuse of a dominant position under Article 102 TFEU. Intel also challenges the alternative assessment of ‘capability’ ( 22 ) which the General Court carried out. In its view, that assessment does not properly take into consideration several circumstances that are relevant for the purposes of determining whether the impugned conduct is capable of restricting competition. Although closely linked to a review of the facts, that question cannot escape judicial review since the Court of Justice has jurisdiction under Article 256 TFEU to review the General Court’s legal characterisation of those facts and the legal conclusions it has drawn from them.

54. As for the substance of the first ground of appeal, I shall begin by examining whether the General Court was right to consider that in assessing the ‘exclusivity rebates’ offered by Intel to the OEMs in question and the marketing arrangements agreed upon with MSH, it was not necessary to look at ‘all the circumstances’ to determine whether the impugned conduct amounts to an abuse of a dominant position contrary to Article 102 TFEU. In that context, the basic tenets of the relevant case-law will be set out to illustrate that the case-law requires an assessment of all the circumstances. As a logical corollary to that conclusion, I shall move on to examine the alternative assessment carried out by the General Court concerning the capability of the rebates offered by the appellant to restrict competition.

(a) The principal assessment of the appellant’s rebates and payments carried out by the General Court

55. As mentioned above (points 44 to 46), on the basis of the Court’s case-law, the General Court distinguished between three categories of rebates: volume-based rebates (category 1), ‘exclusivity rebates’ conditional on the customer obtaining all or most of its requirements from the dominant undertaking (category 2), and other types of rebates where the grant of a financial incentive is not directly linked to exclusive or quasi-exclusive supply (category 3). ( 23 )

56. Specifically, the General Court found that the rebates granted to Dell, HP, NEC and Lenovo, to which the Commission referred, in particular, in Article 1(a) to (d) of the contested decision, are ‘exclusivity rebates’ falling within category 2. This was so because those rebates were conditional on the fact that those companies purchased from Intel, at least in a certain segment, either all their x86 CPU requirements (in the case of Dell and Lenovo) or most of their requirements (namely 95% in the case of HP and 80% in the case of NEC). ( 24 ) In relation to the payments made to MSH, the General Court found that the Commission was not required to examine the circumstances of the case, but was required only to demonstrate that the appellant had granted a financial incentive which was subject to an exclusivity condition. ( 25 )

57. In particular, relying on the statement of the Court in Hoffmann-La Roche, ( 26 ) the General Court held that whether an ‘exclusivity rebate’ can be categorised as abusive does not depend on an analysis of the capability of the rebates to restrict competition in light of the circumstances of the case. ( 27 )

58. The appellant claims that that conclusion is wrong in law. In particular, it claims that the General Court wrongly disregarded the relevance of the statements of the Court in other cases pertaining to rebates under Article 102 TFEU, and also those concerning other pricing practices.

59. In the following, I shall explain why I agree with the appellant.

i) The basic tenets of the Court’s case-law regarding rebates

60. On a general note, the case-law of the Court displays a mistrust of a variety of different rebate mechanisms offered by dominant undertakings. This may be explained by the fact that it is generally considered that dominant undertakings have a special responsibility not to allow their conduct to impair competition on the internal market. ( 28 ) From this special responsibility it follows that mechanisms which in one way or another tie customers to source supplies from the dominant undertaking are regarded as loyalty-inducing and, thus, presumptively abusive.

61. It follows from the line of authority devolving from the seminal Hoffmann-La Roche judgment that rebates that are conditional on the customer purchasing all or most of its requirements from the dominant undertaking are presumptively unlawful. The same presumption of unlawfulness applies to other rebates which also induce loyalty, even though they are not formally based on exclusivity. Rebates, be they retroactive and individualised, as in the cases of Michelin I, ( 29 )British Airways ( 30 ) and Tomra ( 31 ) or market-share based and individualised as in Hoffmann-La Roche, ( 32 ) have been regarded as anticompetitive by the Court. So far, the only type of rebate that has escaped the presumption of unlawfulness is one which is volume-based. Those rebates are linked solely to the volume of purchases made from an undertaking in a dominant position. ( 33 )

62. The rebates and payments offered by Intel can be described as market-share-based loyalty rebates. ( 34 ) To be eligible for a discount, the customer must source a certain percentage of its requirements from the dominant undertaking. As explained, relying on the statement of the Court in Hoffmann-La Roche, the General Court considered that, where a rebate is an exclusivity rebate falling under category 2, there is no need to consider the capability of such a rebate to restrict competition on the basis of the circumstances of the case. ( 35 )

63. Hoffmann-La Roche dealt with a market-share-based rebate scheme which was conditional on the customer purchasing a certain percentage of its requirements from the dominant undertaking. More specifically, the rebates were incremental depending on the percentage of the turnover reached by the purchases. ( 36 ) In that case, the Court held that, save in exceptional circumstances, loyalty rebates are not based on an economic transaction which justifies this burden or benefit. Instead, they are, in the Court’s view, designed to remove or restrict the purchaser’s freedom to choose its sources of supply and to deny other producers access to the market. ( 37 ) According to the Court, therefore, ‘an undertaking which is in a dominant position on a market and ties purchasers … 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 in question is stipulated without further qualification or whether it is undertaken in consideration of the grant of a rebate’. ( 38 ) The Court went on to hold that the ‘same applies if the said undertaking, 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 — whether the quantity of its purchases is large or small — all or most of its requirements from the undertaking in a dominant position. ( 39 )

64. In making that seminal statement, the Court made no mention of the need to consider all the circumstances when determining whether an abuse of a dominant position had been established to the requisite legal standard.

65. Seen in that light, it is perhaps not surprising that the General Court concluded as it did.

66. However, it should be pointed out already here that in Hoffmann-La Roche the conclusion concerning the unlawfulness of the rebates in question was, nevertheless, based on a thorough analysis of, inter alia, the conditions surrounding the grant of the rebates and the market coverage thereof. ( 40 ) It was on the basis of that assessment that the Court held that the loyalty rebates in question were, in that case, intended, by granting a financial advantage, to prevent customers from obtaining their supplies from competing producers.

67. Since Hoffmann-La Roche, as the General Court rightly pointed out, ( 41 ) the case-law has mainly centred on devising the appropriate criteria for determining whether an undertaking has abused its dominant position by making use of rebate schemes that are not directly linked to exclusive or quasi-exclusive supply. These are the rebates that, in the taxonomy employed in the judgment under appeal, fall within category 3.

68. In that subsequent case-law, the Court has constantly reiterated the statement of principle stemming from Hoffmann-La Roche concerning the presumptive abusiveness of loyalty rebates. Yet, as ACT correctly pointed out at the hearing, in practice it has consistently taken into account ‘all the circumstances’ in ascertaining whether the impugned conduct amounts to an abuse of a dominant position contrary to Article 102 TFEU.

69. In Michelin I, a target rebate case, the Court held that it is necessary to consider all the circumstances when dealing with a discount system which is not based on exclusive dealing or on an obligation to obtain a specific portion of supplies from the dominant undertaking. ( 42 ) In further subsequent cases relating to rebates that are not directly conditional on exclusivity, the Court held that in determining whether an undertaking has abused its dominant position it is useful to consider the criteria and the rules for the grant of the discount and whether, in providing an advantage not based on any economic service justifying it, the discount tends to remove or restrict the buyer’s freedom to choose his sources of supply, to bar competitors from access to the market, or to strengthen the dominant position by distorting competition. ( 43 )

70. Reiterating a statement of principle concerning a presumptive abusiveness is, as shown in the Court’s case-law, however, not the same thing as failing to consider the circumstances in a concrete case. In fact, the judgment under appeal constitutes one of the very few cases where the Court’s statement in Hoffmann-La Roche has been applied verbatim, without examining the circumstances of the case, before concluding that an undertaking has abused its dominant position. ( 44 ) To justify that strict approach to ‘exclusivity rebates’, the General Court considered in the judgment under appeal that the rebates and payments made by Intel were conditional on exclusivity (in a similar, yet not identical manner as in Hoffmann-La Roche, given the lack of a formal exclusivity obligation). That circumstance served to distinguish the present case from those mentioned in the previous point.

71. It could, therefore, easily be concluded that, on its face, the judgment under appeal simply reaffirms the existing case-law and applies it to Intel’s conduct.

72. However, such a conclusion would overlook the importance of the legal and economic context in accordance with that same case-law.

ii) The circumstances of the case as a means to determine whether the impugned conduct has a likely effect on competition

73. In this section, I shall explain why an abuse of dominance is never established in the abstract: even in the case of presumptively unlawful practices, the Court has consistently examined the legal and economic context of the impugned conduct. In that sense, the assessment of the context of the conduct scrutinised constitutes a necessary corollary to determining whether an abuse of dominance has taken place. That is not surprising. The conduct scrutinised must, at the very least, be able to foreclose competitors from the market in order to fall under the prohibition laid down in Article 102 TFEU. ( 45 )

74. Even a brief perusal of the cases discussed above (points 66 to 69), shows that the case-law does not omit to look at the legal and economic context of the conduct — or, to employ the standard formula in Article 102 TFEU cases, ‘all the circumstances’ — in order to determine whether an undertaking has abused its dominant position. That is the case for both rebates conditioned on exclusivity and other types of loyalty inducing arrangements.

75. Accordingly, in my view, the General Court’s interpretation of Hoffmann-La Roche misses an important point. Contrary to what was held in the judgment under appeal, ( 46 ) in Hoffmann-La Roche the Court considered several circumstances relating to the legal and economic context of the rebates in finding that the undertaking in question had abused its dominant position. True, that judgment does not explicitly state that an analysis of all the circumstances is crucial for determining whether the impugned conduct amounts to an abuse of a dominant position. Nevertheless, as noted above (point 66), a closer look at the judgment shows that the Court examined in commendable detail the particularities of the pharmaceutical market in question, the market coverage of the rebates, as well as the terms and conditions of the contracts between the dominant undertaking and its customers. ( 47 ) On the basis of that detailed analysis of the legal and economic context of the rebates, namely the conditions for the grant of the rebates, the market coverage thereof, as well as the duration of the rebate arrangements, the Court reached the conclusion that loyalty rebates are unlawful, save in exceptional circumstances. ( 48 )

76. As the General Court acknowledged in the judgment under appeal, ( 49 ) apart from Hoffmann-La Roche, the case-law of the Court pertaining to rebate schemes (other than those purely based on volume) has consistently and explicitly held it to be of particular importance to consider all the circumstances in order to determine whether the impugned conduct amounts to an abuse of a dominant position contrary to Article 102 TFEU. ( 50 ) That is, as such, not surprising: apart from Hoffmann-La Roche, I am not aware that the Court has dealt with other cases pertaining to exclusive supply obligations similar to those at issue there. Unsurprisingly, therefore, the need to consider all the circumstances was yet again reiterated in Post Danmark II, a preliminary ruling handed down after the judgment under appeal was delivered, in relation to retroactive rebates that are not tied to an exclusivity obligation. ( 51 )

77. But what does an assessment of ‘all the circumstances’entail?

78. As I see it, the analysis of ‘context’ — or ‘all the circumstances’, as it is termed in the Court’s case-law — aims simply but crucially to ascertain that it has been established, to the requisite legal standard, that an undertaking has abused its dominant position. ( 52 ) Even in the case of seemingly evident exclusionary behaviour, such as pricing below cost, context cannot be overlooked. ( 53 ) Otherwise, conduct which, on occasion, is simply not capable of restricting competition would be caught by a blanket prohibition. Such a blanket prohibition would also risk catching and penalising pro-competitive conduct.

79. That is why context is essential.

iii) There are only two categories of rebates according to the case-law

80. For the purposes of Article 102 TFEU, loyalty rebates constitute — as I see it — a near-equivalent to a restriction by object under Article 101 TFEU. This is because loyalty rebates, like restrictions by object, are presumptively unlawful. However, as already noted above (point 61), loyalty rebates must be understood as encompassing not only those conditional on the customer sourcing all or most of its requirements with the dominant undertaking, but also other pricing structures conditional upon the customer reaching a particular target.

81. Contrary to what the General Court held in the judgment under appeal, the case-law distinguishes between two, not three, categories of rebates. On the one hand, some rebates are presumptively lawful, such as volume-based rebates. ( 54 ) Any investigation into the (un)lawfulness of such rebates necessarily requires a full examination of their actual or potential effects. Those rebates are not at issue here.

82. On the other hand, for loyalty rebates (which are presumptively unlawful), whether those rebates are directly conditional upon exclusivity or not, the Court employs an approach that displays certain similarities with the approach to restrictions by object under Article 101 TFEU. That is because, under that provision too, in order to ascertain whether certain conduct constitutes a restriction by object, the legal and economic context of the impugned conduct must first be examined so as to exclude any other plausible explanation for that conduct. In other words, the particular context of the impugned conduct is never ignored.

83. As already mentioned above, in Hoffmann-La Roche the Court did consider all the circumstances. A requirement to that effect was later explicitly formulated by the Court in Michelin I in relation to rebates not directly connected to exclusivity. That requirement has subsequently been fine-tuned in cases such as British Airways, Michelin II and Tomra. The purpose of an analysis of all the circumstances is to ascertain whether an abuse of dominance has been established to the requisite legal standard and whether, as a consequence, the rebates are capable of anticompetitive foreclosure.

84. In the judgment under appeal, however, the General Court went one step further. By applying the statement of the Court in Hoffmann-La Roche to the letter, without placing that statement in its proper context, it distinguished one sub-type of loyalty rebate, which it termed ‘exclusivity rebates’, from other types of rebates that induce loyalty. ( 55 ) In doing so, it created a ‘super category’ of rebates for which consideration of all the circumstances is not required in order to conclude that the impugned conduct amounts to an abuse of dominance contrary to Article 102 TFEU. More importantly, the abusiveness of such rebates is assumed in the abstract, based purely on their form.

85. That is by no means a methodologically self-evident step to take. The following four reasons explain why.

– An assumption of unlawfulness by virtue of form cannot be rebutted

86. Firstly, if it were accepted that ‘exclusivity rebates’ constitute a distinct category of rebate that ought to be distinguished from other types of rebate schemes that induce loyalty, the underlying assumption of unlawfulness would no longer be open to rebuttal. ( 56 ) This is so because such a prohibition is based on the form of the conduct instead of its effects.

87. In fact, the judgment under appeal seems to adopt the starting point that an ‘exclusivity rebate’, when offered by a dominant undertaking, can under no circumstances have beneficial effects on competition. That is because, according to the General Court, competition is restricted by the mere existence of a dominant position itself. ( 57 ) That viewpoint amounts to negating the possibility, already accepted in Hoffmann-La Roche, ( 58 ) and reiterated in the judgment under appeal, ( 59 ) of invoking an objective (pro-competitive) justification for the use of the rebates in question.

88. Contrary to what the Commission suggested at the hearing, there is no efficiency or other consideration that can assist an undertaking in justifying the use of ‘exclusivity rebates’ where the prohibition is concerned with form, rather than effects. ( 60 ) Indeed, irrespective of the effects, the form remains the same. That is problematic. The dominant undertaking should be able, as the General Court rightly pointed out in the judgment under appeal, ( 61 ) and as the Commission itself accepted in its written pleadings, to justify the use of a rebate scheme by providing evidence that the exclusionary effect produced may be counterbalanced or even outweighed by advantages in terms of efficiency. ( 62 )

– Loyalty rebates are not always harmful

89. Secondly, creating a ‘super-category’ of rebates is warranted only if it is considered that there can be no redeeming features relating to arrangements that are conditioned on exclusivity, irrespective of the individual circumstances of the particular case. Paradoxically, however, the General Court itself admitted that exclusivity conditions can also have beneficial effects. Yet, it rejected any need to look into those effects on the ground that, owing to the dominant position of the undertaking on the market, competition is already and irrefutably restricted. ( 63 )

90. Experience and economic analysis do not unequivocally suggest that loyalty rebates are, as a rule, harmful or anticompetitive, even when offered by dominant undertakings. ( 64 ) That is because rebates enhance rivalry, the very essence of competition.

91. It is true, however, that the greatest competitive concern in relation to rebates is said to arise where the customers of a dominant undertaking must carry a percentage of its products and/or where the discount is conditional on the customer purchasing all (or a substantial part) of its requirements from it. That could be seen as an argument in favour of treating ‘exclusivity rebates’ more strictly. Yet, other types of rebates can have a similar distorting effect. This is so even where the scheme is not explicitly linked to exclusivity. ( 65 )

92. Indeed, as the case-law clearly illustrates, a mechanism that induces loyalty may take different forms. As was the case in Hoffmann-La Roche ( 66 ) and Tomra, ( 67 ) the loyalty mechanism can be inherent in the requirement that the customer purchase all or most of its material requirements from the dominant undertaking. It can also take the form of individualised sales targets ( 68 ) or bonuses, ( 69 ) which are not necessarily tied to a particular proportion of requirements or sales.

93. Seen in that light, there is no objective reason why category 2 rebates should receive a stricter treatment than those falling under category 3.

– The effects of loyalty rebates are context-dependent

94. Thirdly, contemporary economic literature commonly emphasises that the effects of exclusivity are context-dependent. ( 70 ) Conversely, few commentators would deny that loyalty rebates in particular can — depending on the circumstances — have an anticompetitive foreclosure effect.

95. Awareness of context-dependency may also help explain why the Court has, in its recent Article 102 TFEU case-law, highlighted the importance of considering all the circumstances. It did so, inter alia, in Tomra. Admittedly, as the General Court observed, ( 71 ) the rebates under scrutiny on appeal in Tomra concerned individualised retroactive rebates, that is, rebates belonging to category 3 in the taxonomy employed in the judgment under appeal. However, in Tomra the Court did not explicitly draw a distinction between rebates belonging to categories 2 and 3. It simply observed that where rebates are conditional on the customer obtaining all or most of its requirements from the dominant undertaking, it is necessary to consider all the circumstances in order to determine whether the impugned conduct amounts to an abuse of a dominant position. ( 72 )

96. The parties draw opposing conclusions from the Court’s statement: both parties argue that it settles the controversy surrounding the legal test to be applied in relation to ‘exclusivity rebates’ once and for all. Yet they continue to disagree on what that test should be.

97. To my mind, the Court’s statement in Tomra does not assist us here. As the parties’ diametrically opposed interpretations illustrate, the language employed in that judgment regarding the type of rebates that should be subject to an assessment of all the circumstances is simply too ambiguous.

98. Rather, it is open to question whether the distinction drawn by the General Court in the judgment under appeal between Tomra and Hoffmann-La Roche is warranted. In that regard, I would draw attention to two points.

99. On the one hand, similarly to Tomra, in Hoffmann-La Roche, the rebates considered there displayed certain characteristics of individualised retroactive rebates. In fact, several contracts examined in Hoffmann-La Roche not only contained a rebate clause relating to the majority of the purchaser’s requirements. They also included rebate clauses providing for a discount, the percentage of which was to increase depending on whether the percentage of the purchaser’s estimated requirements had been met during the reference period. ( 73 ) On the other hand, even assuming that a distinction would be warranted due to a supposed intrinsic difference between the rebates involved in the two cases — which I consider not to be the case — the Court by no means overlooked the context of the impugned rebates in Hoffmann-La Roche. Why should it have done so in Tomra, more than three decades later?

100. If anything, the difference between the rebates at issue in Tomra and Hoffmann-La Roche is one of degree rather than kind. The same can be said about Post Danmark II, a case in which the relevance of context and all the circumstances in determining whether the impugned conduct amounts to an abuse of a dominant position was recently confirmed. ( 74 )

– Related practices require consideration of all the circumstances

101. Fourthly, and lastly, the case-law relating to pricing and margin squeeze practices requires, as the appellant rightly points out, consideration of all the circumstances in order to determine whether the undertaking in question has abused its dominant position. ( 75 )

102. The General Court dismissed the relevance of that case-law on the ground that, unlike an incentive to exclusive supply, a particular price cannot be abusive in and of itself. ( 76 ) Yet, the judgment under appeal considers Intel’s rebates to be anticompetitive on account of price. ( 77 ) To my mind, dismissing the relevance of that case-law is problematic: it results in an unwarranted distinction between different types of pricing practices. Indeed, loyalty rebates, margin squeeze practices as well as predatory pricing possess the common feature of constituting ‘price based exclusion’. ( 78 )

103. It goes without saying that it is of the utmost importance that legal tests applied to one category of conduct are coherent with those applied to comparable practices. Sound and coherent legal categorisation benefits not only undertakings in terms of increased legal certainty, but also assists competition authorities in the enforcement of competition law. Arbitrary categorisation does not.

104. The Court seems to agree. Most recently in Post Danmark II, the Court applied the case-law relating to pricing and margin squeeze practices to support its findings in relation to a rebate scheme offered by a dominant undertaking. ( 79 ) It is true, however, that Post Danmark II could also be read as supporting the view that, in so far as ‘exclusivity rebates’ are concerned, there might be no need to consider all the circumstances. ( 80 ) The reason for this is that, in that case, the Court distinguished the rebates in question from those based on an exclusivity obligation before holding that all the circumstances must be considered to determine whether the dominant undertaking has abused its dominant position. Indeed, if anything, the retroactive rebates considered by the Court in that case resembled those that were considered, in the judgment under appeal, to be fidelity-inducing rebates belonging to category 3. ( 81 )

105. As explained above, such a distinction is a distinction without a difference (given that the difference lies in form rather than effects). More fundamentally, however, such a reading of that judgment would stand in contrast to the approach of the Court — sitting in Grand Chamber — in Post Danmark I, where it held that in so far as pricing practices are concerned, all the circumstances must be considered. ( 82 ) Tellingly in fact, the Court reiterated, at a different point in its judgment in Post Danmark II — and there without distinguishing between different types of rebates schemes — that ‘the assessment of whether a rebate scheme is capable of restricting competition must be carried out in the light of all relevant circumstances’. ( 83 ) Assuredly it did so in order to ensure a coherent jurisprudential approach to the assessment of conduct falling under the purview of Article 102 TFEU.

iv) Intermediate conclusion

106. Having regard to the above, ‘exclusivity rebates’ should not be regarded as a separate and unique category of rebates that requires no consideration of all the circumstances in order to determine whether the impugned conduct amounts to an abuse of a dominant position. Accordingly, in my opinion, the General Court erred in law in considering that ‘exclusivity rebates’ can be categorised as abusive without an analysis of the capacity of the rebates to restrict competition depending on the circumstances of the case.

107. That said, the General Court proceeded, in the alternative, to assess in detail whether the rebates and payments offered by the appellant were capable of restricting competition. That is to say, it investigated ‘all the circumstances’. That is why the finding regarding an error in law made in the previous point does not necessarily entail the setting aside of the judgment under appeal. Rather, such a conclusion can only be reached in so far as the alternative assessment performed by the General Court discloses an error in law.

108. Therefore, it is necessary to move on to consider that alternative assessment.

(b) The alternative assessment of capability carried out by the General Court

109. The appellant puts forward, in essence, three sets of arguments that call into question the General Court’s alternative assessment. First, it argues that the General Court erred in law in upholding the finding of an abuse by the Commission without considering the likelihood of anticompetitive effects. Second, the factors which the General Court took into account were either irrelevant or assessed incorrectly. Third, the General Court failed to assess correctly several other factors that are crucial for a finding of an abuse.

110. The Commission maintains that there is no higher ‘likelihood’ threshold that needs to be met (in comparison to the ‘capability’ standard) to establish the existence of an abuse of dominance: capability is enough. In its view, the arguments put forward by the appellant do not cast doubt on the findings made in the judgment under appeal regarding the capability of Intel’s conduct to restrict competition.

111. By its arguments, the appellant calls into question the legal test that was applied in the judgment under appeal to ascertain that the impugned conduct was capable of restricting competition. First: what level of probability is required in a capability assessment? Second: what are the relevant circumstances to be taken into consideration in determining whether the conduct in question is capable of restricting competition? I shall examine each of those questions in turn.

i) Capability and/or likelihood

112. The appellant argues that the General Court erred in law in upholding the finding of an abuse without considering the likelihood of anticompetitive harm from the impugned conduct.

113. In its alternative assessment, the General Court explained that the Commission may confine itself to determining that the conduct scrutinised was capable of restricting competition. In addition, it pointed out that the Commission does not need to prove that an actual foreclosure effect has materialised, even where all the circumstances are considered. ( 84 )

114. Certainly, evidence of actual effects does not need to be presented. This is because it is sufficient, in relation to conduct that is presumptively unlawful, that the impugned conduct be capable of restricting competition. Importantly, however, that capability cannot merely be hypothetical or theoretically possible. Otherwise, there would be no need to consider all the circumstances in the first place.

115. True, there is some discrepancy in the case-law regarding the terminology employed. The case-law refers to capability and likelihood, sometimes even interchangeably. ( 85 ) It is my understanding that those terms designate one and the same compulsory step in an analysis seeking to determine whether the use of loyalty rebates amounts to an abuse of a dominant position.

116. But what degree of probability of anticompetitive foreclosure is required? That question is at the core of the disagreement between the appellant and the Commission regarding the adequacy of the General Court’s assessment of capability: whereas the Commission believes that the assessment was adequate, Intel claims that the General Court failed to verify that the appellant’s conduct could, in the circumstances of the case, restrict competition.

117. The aim of the assessment of capability is to ascertain whether, in all likelihood, the impugned conduct has an anticompetitive foreclosure effect. For that reason, likelihood must be considerably more than a mere possibility that certain behaviour may restrict competition. ( 86 ) Contrariwise, the fact that an exclusionary effect appears more likely than not is simply not enough. ( 87 )

118. Although it is certainly true that in its case-law the Court has consistently emphasised the special responsibility of dominant undertakings, that responsibility cannot be taken to mean that the threshold for the application of the prohibition of abuse laid down in Article 102 TFEU can be lowered to such an extent as to become virtually non-existent. That would be the case if the degree of likelihood required for ascertaining that the impugned conduct amounts to an abuse of a dominant position was nothing more than the mere theoretical possibility of an exclusionary effect, as seems to be suggested by the Commission. If such a low level of likelihood were accepted, one would have to accept that EU competition law sanctions form, not anticompetitive effects.

119. Clearly, that would considerably hamper the attainment of the objectives of EU competition law. To assume the existence of an abuse on the basis that, on balance, anticompetitive foreclosure seems more likely than not risks capturing not only isolated instances of practices, but a non-negligible number of practices that may, in reality, be pro-competitive. The cost of error of such an approach would be unacceptably high due to over-inclusion.

120. To avoid over-inclusion, the assessment of capability as concerns presumptively unlawful behaviour must be understood as seeking to ascertain that, having regard to all circumstances, the behaviour in question does not just have ambivalent effects on the market or only produce ancillary restrictive effects necessary for the performance of something which is pro-competitive, but that its presumed restrictive effects are in fact confirmed. Absent such a confirmation, a fully-fledged analysis has to be performed.

121. Consequently, the question that arises here is whether the General Court’s assessment of capability is conclusive because, on the basis of that assessment, it is possible to confirm that the appellant had abused its dominant position contrary to Article 102 TFEU. In particular, it must be ascertained whether, as required by the case-law, that assessment can confirm that the rebates remove or restrict the customer’s freedom to choose its sources of supply, bar competitors from access to the market, or strengthen the dominant position by distorting competition. ( 88 )

ii) The factors considered by the General Court to support a finding of abuse

122. In the judgment under appeal, the General Court based the finding that the rebates and payments offered by the appellant were capable of restricting competition on the following factors: (i) the appellant was an unavoidable trading partner for the customers concerned; (ii) the OEMs’ low operating margins made the rebates attractive and reinforced their incentive to comply with the exclusivity condition; (iii) the appellant’s rebates were taken into consideration by its customers in deciding to obtain all or almost all of their requirements from that company; (iv) the appellant’s two different practices complemented and reinforced each other; (v) the appellant targeted undertakings which were of particular strategic importance for market access; and finally (vi) the appellant’s rebates were part of a long-term strategy aimed at barring AMD’s access to the most important sales channels. ( 89 )

123. Intel considers that those factors cannot be relied upon to establish, to the requisite legal standard, that Intel’s rebates and payments were capable of producing an anticompetitive foreclosure effect. More specifically, the appellant claims that the factors relied upon by the General Court boil down to two points: that the OEMs took Intel’s rebates into account because the rebates were attractive, and that Intel used two complementary infringements to exclude AMD from important customers.

124. First, therefore, the appellant contests the relevance of the circumstance that the rebates and payments in question were actually taken into account in the commercial decisions of those benefiting from them. ( 90 )

125. I agree with the appellant.

126. An attractive offer, which translates into a financial incentive to stay with the supplier making that offer, may be a factor that points to a loyalty-inducing effect at the level of an individual customer. However, it is unhelpful in establishing that the rebates have a likely anticompetitive foreclosure effect. Indeed, as the appellant rightly points out, it is the essence of competition that customers take lower prices into account in making purchasing decisions. Put differently, the fact that a lower price is in fact taken into account makes a foreclosure effect possible, but, on the other hand, it does not rule out the contrary either. In other words, that factor is simply inconclusive for the purposes of determining whether the impugned conduct is capable of restricting competition to the requisite degree of likelihood.

127. Second, the appellant contends that the existence of an overall strategy comprising two types of infringement (rebates and payments as well as naked restrictions), which were considered to complement and strengthen one another, cannot establish capability to restrict competition. ( 91 )

128. While a strategy of foreclosure may certainly provide an indication of a subjective intent to foreclose competitors, the mere will to do so does not translate into capability to restrict competition. A more fundamental problem can, however, be gleaned from the reasoning of the General Court. In fact, a closer look at the judgment under appeal reveals that the General Court has put the cart before the horse: it relied on the existence of an overall strategy based on two complementary infringements to determine the capability of the impugned conduct to restrict competition. In doing so, the General Court began its reasoning from the assumption that the strategy under consideration was abusive, rather than assessing all the circumstances to determine whether an infringement had been established to the requisite legal standard.

129. Having first addressed those two specific criticisms, I will now move on to examine the appellant’s more general criticism regarding the assessment of capability. The appellant claims that the factors considered as relevant are not sufficient to ascertain that the impugned conduct is capable of anticompetitive foreclosure. In particular, the General Court failed to attribute relevance to other factors that are of fundamental importance in such an assessment.

130. To recall, the assessment of all the circumstances aims to ascertain that the impugned conduct results, in all likelihood, in anticompetitive foreclosure. Keeping that in mind, the question that arises is the following: Are the findings made in the judgment under appeal — that Intel was an unavoidable trading partner and that the impugned rebates and payments targeted undertakings which were of particular strategic importance for market access — sufficient in law to establish Intel’s liability? The answer to that question hinges upon whether the circumstances argued to be crucial by Intel, and regarded as irrelevant by the General Court, cast doubt on the presumed anticompetitiveness of Intel’s conduct.

131. I shall address that issue next.

iii) Other circumstances

132. The appellant argues that the General Court erred in its analysis of the circumstances of the case by failing to consider the following circumstances: (i) the insufficient market coverage of the challenged rebates and payments; (ii) the short duration of the challenged rebates; (iii) market performance of the competitor and declining prices; and (iv) the AEC test carried out by the Commission.

133. For its part, the Commission considers that the judgment under appeal established, to the requisite legal standard, that the rebates and payments offered by Intel were capable of anticompetitive foreclosure. The unchallenged factors suffice to uphold the conclusion that Intel’s rebates and payments were capable of restricting competition.

134. I disagree with the Commission.

135. As already explained, in a somewhat similar fashion to the enforcement shortcut concerning restrictions by object under Article 101 TFEU, the assessment of all the circumstances under Article 102 TFEU involves examining the context of the impugned conduct to ascertain whether it can be confirmed to have an anticompetitive effect. If any of the circumstances thus examined casts doubt on the anticompetitive nature of the behaviour, a more thorough effects analysis becomes necessary.

136. As I will explain in the following points, the assessment of all the circumstances should have led the General Court to conclude that, in order to determine whether the impugned conduct amounted to an abuse of a dominant position contrary to Article 102 TFEU, an analysis of the actual or potential effects of that conduct was necessary.

– Market coverage

137. The appellant claims that consideration of a likely effect on competition must take account of the market coverage of the rebates in question. In its view, loyalty rebates are unlikely to restrict competition when their market coverage is low, because larger portions of the market may be reached by competitors without them having to match those discounts. The appellant also points out that, in its case, the tied share of the market was, in comparison, on average considerably lower than in cases such as Tomra and Van den Bergh Foods. ( 92 ) For example, in Tomra, the tied share of the market was (on average) 39%. ( 93 ) The Commission, on the other hand, considers the issue of market coverage not to be relevant in determining whether the impugned conduct is capable of anticompetitive foreclosure.

138. In the context of the alternative assessment of capability, the General Court stated that the market coverage of the rebates and payments offered by the appellant was approximately 14% on average during the total period of the infringement (if the calculation is not limited solely to the contestable share of demand). ( 94 ) It deemed that to be significant. ( 95 ) According to the judgment under appeal, the rebates and payments offered by Intel can be distinguished from the circumstances underlying Van den Bergh Foods given that the form of the scheme under consideration was different from that at issue in the present proceedings. ( 96 )

139. I, for one, am not convinced that the case-law referred to by the appellant is irrelevant, as stated by the General Court. The exclusivity mechanism in Van den Bergh Foods did indeed function through the supply of a free freezer. But that is a distinction without a difference. The supply of that freezer was conditional on its exclusive use for storing the dominant undertaking’s ice cream. As a result, 40% of all retailers of ice cream were subject to product exclusivity. ( 97 )

140. As explained, the focus of EU competition rules has consistently been on effects, not form. Viewed in that light, the size of the tied part of the market is equally relevant, irrespective of the form of the scheme. That is why it is generally accepted that the likelihood of negative effects on competition increases in line with the size of the tied market share. ( 98 )

141. That said, defining the level of market coverage that may cause anticompetitive effects is by no means an arithmetic exercise. Unsurprisingly, therefore, the Court has rejected the idea that a precise threshold of foreclosure of the market must be determined, beyond which the practices at issue can be regarded as abusive for the purposes of applying Article 102 TFEU. This was confirmed by the Court in Tomra. ( 99 )

142. It is certainly true that thresholds may prove problematic due to the specificities of different markets and the circumstances of each individual case. For example, where loyalty rebates target customers that are of particular importance for competitors to enter or expand their share of the market, even modest market coverage can certainly result in anticompetitive foreclosure. Whether that is the case will depend on a number of factors specific thereto.

143. Seen in that light, a market coverage of 14% may or may not have an anticompetitive foreclosure effect. What is certain, however, is that such market coverage cannot rule out that the rebates in question do not have an anticompetitive foreclosure effect. This is so even assuming that the rebates and payments in question target key customers. ( 100 ) Quite simply, 14% is inconclusive.

144. That inconclusiveness is not remedied by the reliance, in the judgment under appeal, on the established fact that the appellant was an unavoidable trading partner on the CPU market. It must be noted that, according to the General Court, the fact that an undertaking constitutes an unavoidable trading partner indicates, at the very least, that an ‘exclusivity rebate’ or payment offered by such an undertaking is capable of restricting competition. ( 101 )

145. That conclusion is only correct if it is accepted that the degree of likelihood required does not amount to anything more than the mere possibility that certain behaviour has anticompetitive effects. As previously explained, however, the assessment of all the circumstances seeks to ascertain that the impugned conduct has, in all likelihood, an anticompetitive effect.

146. On that basis, I conclude that the assessment of market coverage carried out in the judgment under appeal is inconclusive. Importantly, it cannot establish, to the requisite legal standard, that the share of the market affected by the rebates and payments was sufficient to bring about anticompetitive foreclosure.

– Duration

147. The appellant considers that the duration of a rebate arrangement is critical to an analysis of capability to restrict competition. In particular, it calls into question the assessment of duration in the judgment under appeal, which was based on the cumulation of multiple short-term agreements.

148. The Commission, on the other hand, argues that Intel is mistaken in considering that the potential exclusionary effects of loyalty rebates can only derive from a contractual obligation: on the contrary, the dominant undertaking’s market power renders such contractual obligations unnecessary. In short: duration is irrelevant.

149. Specifically, the General Court held that the relevant criterion is not the duration of the notice period for terminating a contract or the fixed duration of an individual contract which forms part of a series of successive contracts. Instead, the relevant criterion is, in its view, the overall period during which the appellant applies exclusivity rebates and payments vis-à-vis a customer. ( 102 ) That period amounted to approximately five years in the case of MSH, three years in the case of Dell and NEC, over two years in the case of HP and approximately one year in the case of Lenovo. The grant of ‘exclusivity rebates’ and payments during such periods was deemed generally capable of restricting competition. In the view of the General Court, that was in particular true of the CPU market, which is highly dynamic and characterised by short product-life cycles. ( 103 )

150. At the outset, I would observe that the short duration of an arrangement does not exclude that the arrangement is capable of having anticompetitive effects. Similarly, the question of whether the overall period is short or long in the abstract is irrelevant.

151. Where, as here, exclusivity hinges, in the final analysis, on the choice of the customer to source the majority of supplies from the dominant undertaking, it cannot simply be assumed — ex post facto — that the cumulation of short-term agreements shows that those rebates are capable of restricting competition.

152. There are at least two reasons for this.

153. First, unlike in a situation of exclusive dealing, there is no penalty involved in switching suppliers. This is true provided that a competitor can at least in principle match the lost rebate. If, however, the competitor cannot sell the goods in question without a loss, the customer is de facto tied to the dominant undertaking. Viewed from that perspective, the size of the rebate cannot be regarded as wholly insignificant either.

154. More specifically, in an ex post analysis of duration, as here, it is necessary to determine whether another supplier could have compensated for the loss of the rebates. Otherwise, customers’ choice to stay with the dominant undertaking would automatically be considered to indicate an abuse, despite the fact that customers could walk away from their agreements with the dominant undertaking without constraints.

155. Plainly, it cannot simply be assumed, on the basis of a customer’s choice to stay with the dominant undertaking, that that choice constitutes an expression of abusive behaviour. That is because there may be other plausible explanations for that choice. Those include, but are not limited to, quality concerns, the security of supply, and the preference of end-users.

156. Second, a long overall duration of the arrangement can certainly point to a loyalty-inducing effect of the rebate mechanism at the level of the individual customer. However, unless further compelling evidence to that effect has been presented, the fact that a customer has decided to stay with the dominant undertaking cannot suffice to establish that the rebates offered are capable of restricting competition to the requisite standard. Indeed, it should be borne in mind that where the customer has the option of switching suppliers on a regular basis, even where that option has not been exercised, loyalty rebates will also enhance rivalry. Thus, they can also have a pro-competitive effect.

157. Therefore, I consider that the assessment of duration undertaken in the judgment under appeal — which was limited to considering the overall duration of the arrangements scrutinised — is inconclusive. Quite simply, that assessment does not assist in ascertaining that that conduct has, in all likelihood, an anticompetitive effect.

– Market performance of the competitor and declining prices

158. The appellant contests the General Court’s rejection of AMD’s market performance and evidence concerning lack of foreclosure (declining prices of x86 CPUs) as irrelevant in the context of an assessment of capability.

159. According to the General Court, the competitor’s success and falling prices could not exclude that the appellant’s practices had no effect. It observed that in the absence of those practices, it may legitimately be considered that the increase in the competitor’s market share and in its research and development investment and the decrease in the price of x86 CPUs might have been greater. ( 104 )

160. In my view, the General Court was correct in considering that AMD’s market performance and the decrease in the price of x86 CPUs are inconclusive for the purposes of ascertaining whether the impugned conduct is capable of restricting competition. However, the same conclusion would apply even if competitor performance was poor. As I see it, the consideration of such factual elements can only serve a meaningful purpose as a part of a detailed assessment of actual or potential effects on competition. It does not assist in determining whether a presumptively unlawful rebate scheme is capable of restricting competition.

– The AEC test

161. The appellant considers that when, as in the present case, the Commission has carried out a substantial analysis of the economic circumstances in relation to allegedly abusive conduct it is wrong in law to ignore that analysis simply because it does not help to establish an infringement.

162. The Commission argues that the AEC test is not relevant for establishing that the impugned conduct is capable of restricting competition. In its view, the case-law of the Court does not support the appellant’s claim that the AEC test should be part of an assessment of all the circumstances.

163. In the judgment under appeal, the General Court dismissed the relevance of the AEC test for the purposes of determining, in the context of an assessment of all the circumstances, whether the impugned conduct is capable of restricting competition. Accordingly, it did not review the test applied by the Commission in the decision at issue. First, it considered that the AEC test was irrelevant because, in view of their form, the Commission is not required to demonstrate the foreclosure capability of ‘exclusivity rebates’ on a case-by-case basis. The judgment under appeal dismissed the relevance of the AEC test essentially because it only serves to verify that the impugned conduct does not make market access impossible. According to the judgment under appeal, ‘exclusivity rebates’ may hamper market access for competitors of the undertaking in a dominant position, even if access to the market is not economically speaking entirely impossible, but only made more difficult. ( 105 ) Second, it noted that, even in relation to rebates falling under category 3, the case-law does not require the use of an AEC test. Third, it observed that the AEC test has been deemed relevant by the Court only in pricing and margin squeeze practice cases, which are inherently different from ‘exclusivity rebate’ cases. ( 106 )

164. First, as I have demonstrated above (points 122 to 160), it is necessary to consider all the circumstances to ascertain whether the conduct in question is capable of foreclosing competitors also in so far as ‘exclusivity rebates’ are concerned. In other words, the foreclosure capability must be demonstrated in each individual case. Certainly, the AEC test can be dismissed as irrelevant if one accepts that a mere hypothetical or theoretical possibility that the impugned conduct has an anticompetitive foreclosure effect suffices to establish an abuse. Indeed, in theory, any rebate offered by a dominant undertaking can, in some circumstances, have an anticompetitive effect.

165. However, given that an exclusionary effect is required, the AEC test cannot be ignored. As the General Court noted, the test serves to identify conduct which makes it economically impossible for an as-efficient competitor to secure the contestable share of a customer’s demand. In other words, it can help identify conduct that has, in all likelihood, an anticompetitive effect. By contrast, where the test shows that an as-efficient competitor is able to cover its costs, the likelihood of an anticompetitive effect significantly decreases. That is why, from the perspective of capturing conduct that has an anticompetitive foreclosure effect, the AEC test is particularly useful.

166. As regards the second and the third considerations, I have explained above (points 101 to 105) why the case-law relating to pricing practices and margin squeeze practices should not be disregarded. In any event, any remaining uncertainty in that regard has disappeared with Post Danmark II. That case demonstrates that the case-law pertaining to other types of price-based exclusion cannot simply be disregarded in the context of rebate cases. As the Court confirmed, by reference inter alia to that case-law, the AEC test may prove useful in the context of assessing a rebate scheme too. ( 107 )

167. However, it is also worth observing that in Post Danmark II the Court was careful to qualify its position on the AEC test. It specifically observed that although the AEC test can prove helpful in certain situations, there is no legal obligation to make use of that test. ( 108 ) This is in line with the Court’s statement to the same effect in Tomra. In that case, the Court considered that the Commission is not required to demonstrate that loyalty rebates force the competitors of the dominant undertaking to charge prices below cost in order to compete for the contestable share of the market. Rather, the Court held that the Commission could establish that the rebates in question were capable of restricting competition on the basis of qualitative elements indicating their anticompetitive nature. ( 109 )

168. In that sense, it would certainly seem tempting to conclude that, in the present case, there is no need to have recourse to an AEC test. Following that logic, as argued by the Commission, the assessment of capability carried out by the General Court would not contain an error in law in having disregarded the AEC test as irrelevant.

169. However, that standpoint overlooks two issues. Unlike in Tomra, the Commission did in fact carry out an extensive AEC analysis in the decision at issue. More fundamentally still, the other circumstances assessed by the General Court do not unequivocally support a finding of an effect on competition. In those circumstances, it is clear to me that the AEC test cannot simply be ignored as an irrelevant circumstance.

170. Therefore, the General Court erred in law by not considering the AEC analysis carried out by the Commission in the decision at issue as a part of the assessment of all the circumstances.

171. To conclude my analysis of the alternative assessment of capability carried out by the General Court, I observe the following.

172. The circumstances considered in that assessment cannot confirm an effect on competition. At most, that assessment shows that an anticompetitive foreclosure effect of the impugned conduct is theoretically possible, but the effect as such has not been confirmed. As a matter of principle, an assessment of all the circumstances must, at the very least, take into account the market coverage and duration of the impugned conduct. In addition, it may be necessary to consider other circumstances that may differ from case to case. In the present case, the AEC test, precisely because that test was carried out by the Commission in the decision at issue, cannot be ignored in ascertaining whether the impugned conduct is capable of having an anticompetitive foreclosure effect. The assessment of the relevant circumstances should, taken as a whole, allow us to ascertain, to the requisite degree of likelihood, that the undertaking in question has abused its dominant position contrary to Article 102 TFEU. Absent such a confirmation due to, for example, low market coverage, short duration of the impugned arrangements or a positive result of an AEC test, a more thorough economic assessment of the actual or potential effects on competition is necessary for the purposes of establishing an abuse.

(c) Conclusion

173. I have concluded that the General Court erred in law, first, in finding that ‘exclusivity rebates’ constitute a separate and unique category of rebates that require no consideration of all the circumstances in order to establish an abuse of a dominant position contrary to Article 102 TFEU. Second, it erred in law in its alternative assessment of capability by failing to establish, on the basis of all the circumstances, that the rebates and payments offered by the appellant had, in all likelihood, an anticompetitive foreclosure effect.

174. It follows that the first ground ought to be upheld.

C – The second ground of appeal: market coverage in determining whether an undertaking has abused its dominant position

1. The main arguments of the parties

175. In the second ground of appeal, the appellant claims that, irrespective of the conclusion reached concerning the first ground, the market coverage of Intel’s conduct did not, in any event, allow it to restrict competition during 2006 and 2007. In that period, the infringement only concerned MSH and Lenovo. In the appellant’s view, the General Court erred in law in considering that, because the Commission had made a finding of a single and continuous infringement in the decision at issue for the years 2002 to 2007, the finding of an infringement for 2006 and 2007 could be based on the average market coverage across the entire period from 2002 to 2007 (rather than on the market coverage of the conduct in the two years in question). ( 110 )

176. The Commission points out that the second ground of appeal is a mere addition to the first ground. It is based entirely on the same premises as the first ground. That institution considers that market coverage is irrelevant for the purposes of determining whether Intel’s rebates were capable of restricting competition: the market coverage of Intel’s practices only relates to the extent to which those practices actually restricted competition. Owing to the strategic importance of the OEMs targeted in 2006 and 2007, the significance of Intel’s practices cannot be measured simply by reference to market coverage. In that context, the Commission argues that market coverage during those two years should be seen in the light of a single and continuous infringement which relates to the existence of an overall strategy to foreclose AMD from the worldwide market for CPUs.

2. Analysis

177. I have concluded above that the General Court erred in its alternative assessment of capability in accordance with all the circumstances. In particular, it erred in its assessment of market coverage by failing to acknowledge that a tied market share of 14% cannot establish, to the requisite legal standard, that the impugned conduct is capable of restricting competition. On that basis alone, the second ground ought to be upheld too.

178. Nevertheless, I believe this ground merits a brief discussion of its own. This is because the findings of the General Court regarding the existence of a single and continuous infringement constitute the basis for a finding of an infringement for the years 2006 and 2007. In fact, the General Court considered that, in the context of a single and continuous infringement based on an overall strategy of foreclosure, a global assessment of the average share of the tied market was sufficient for the purposes of ascertaining that the conduct in question was capable of anticompetitive foreclosure. ( 111 )

179. Hence, the crux of the present ground of appeal lies in defining the role of the concept of single and continuous infringement in assessing the capability of a single undertaking’s conduct to restrict competition. More specifically, the question arises as to whether recourse to that concept can remedy the fact that market coverage is too small to establish on its own that the impugned conduct was capable of restricting competition during a specific period of time.

180. In the case-law of the Court, the concept of single and continuous infringement has been employed, in particular, in the context of Article 101 TFEU to capture several elements of anticompetitive conduct under the umbrella of one single and continuous infringement for the purposes of enforcement. In that regard, the underlying rationale is to ensure effective enforcement in cases where infringements are composed of a complex of anticompetitive practices that can take different forms and even evolve over time. ( 112 )

181. In other words, the aim is to avoid the unfortunate enforcement outcome where various agreements and concerted practices under Article 101 TFEU, which in reality form part of an overall plan to restrict competition, are treated separately. For that reason, recourse to the concept of single and continuous infringement tempers the burden of proof generally weighing on enforcement authorities regarding the need to prove the continuous nature of the anticompetitive practices scrutinised. More particularly, where a complex of agreements and practices have been implemented over a long period of time, it is not unusual that changes in the scope, form and participants to those agreements and/or practices have taken place during the relevant time period. Without the assistance of the concept of single and continuous infringement, the Commission would have to meet a higher evidentiary threshold. It would need to identify and prove the existence of several distinct anticompetitive agreements and/or concerted practices as well as identify the parties involved in each of them separately. Treating the impugned practices separately could also in some cases result in a time-bar of older agreements and/or concerted practices. That would make enforcement less efficient.

182. The concept of single and continuous infringement thus constitutes a procedural rule.

183. By alleviating the evidentiary burden of the competition authorities, the concept is of particular relevance in the context of fining. More specifically, the fact that evidence has not been produced in relation to certain specific periods does not preclude the infringement from being regarded as established during a longer overall period. This requires, however, that that finding be supported by objective and consistent indications to that effect. Typically, in the context of an infringement extending over several years, the fact that an agreement is shown to have been applied during different periods, which may be separated by longer or shorter intervals, does not have an impact on the existence of the agreement as such. That is so provided that the various actions which form part of the infringement pursue a single purpose and fall within the framework of a single and continuous infringement. ( 113 ) Indeed, of particular significance is the fact that the Commission has been able to prove an overall plan to restrict competition. ( 114 )

184. By contrast, recourse to the concept of a single and continuous infringement does not — and cannot — extend the ambit of the prohibitions under the Treaties.

185. In the present instance, the concept of a single and continuous infringement has been inserted into a wholly different context. ( 115 ) In the judgment under appeal, it was employed to find an infringement concerning a single undertaking’s conduct, in relation to which it had not been verified that that conduct alone was capable of restricting competition within the internal market.

186. I must express my doubts as regards that exercise.

187. Fundamentally, as the appellant observes, recourse to the concept of a single and continuous infringement cannot convert lawful conduct into an infringement.

188. However, since the Commission did conclude that a single and continuous infringement had taken place, the General Court considered it to be sufficient to make a global assessment of the part of the market which was foreclosed on average during the period running from 2002 to 2007. ( 116 ) On that basis, it considered it irrelevant that the market coverage was considerably smaller during the years 2006 and 2007 than the tied share of the market on average (14%).

189. In other words, the General Court replaced a material criterion with a procedural one. It abandoned the criterion of sufficient market coverage, which it paradoxically held to be relevant for ascertaining whether the impugned conduct was capable of anticompetitive foreclosure, and replaced it with the criterion of a single and continuous infringement. That, quite simply, cannot stand. Either it is accepted that market coverage does not matter at all and that EU competition rules sanction form rather than effects (I have explained above why that is an untenable solution), or it has to be taken seriously in an assessment of all the circumstances.

190. In doing the above, the General Court failed to ascertain that the behaviour in question was capable of restricting competition during the whole period in question.

191. In any event, had it not failed to ascertain whether that was the case, it would have had to conclude that such a small tied market share is inconclusive for the purposes of establishing that the impugned conduct was capable of restricting competition.

192. Similarly to what was noted in point 143 above in relation to a market share of 14%, it cannot be excluded that a tied share of less than 5% of the market may also, in certain circumstances, be sufficient to foreclose competitors. Be that as it may, in the context of an assessment of capability such a market share is simply inconclusive. As explained, it cannot be assumed (on the basis of the form of the conduct) that certain arrangements are caught by the prohibition laid down in Article 102 TFEU without having due regard to the share of the tied market. In circumstances where the tied market share does not provide conclusive evidence of an effect on competition, determining that abuse has occurred requires consideration of the actual or potential effects of the conduct in question.

193. To reiterate, where market coverage is considered inconclusive for the purposes of establishing an effect on competition during a certain period of time, that problem cannot be remedied by applying the concept of a single and continuous infringement. Rather, as that concept itself suggests, for several instances of behaviour to constitute a single and continuous instance of infringement, each instance must also constitute in and of itself an infringement. Put differently, that behaviour must constitute an infringement throughout the whole period in question.

194. Therefore, the second ground of appeal ought to be upheld as well.

D – The third ground of appeal: classification of certain rebates as ‘exclusivity rebates’

1. The main arguments of the parties

195. The appellant, supported by ACT, submits that the General Court erred in law in classifying the rebate arrangements with HP and Lenovo as ‘exclusivity rebates’. Although those rebates covered 95% of HP’s corporate desktops and 80% of Lenovo’s notebooks, they constitute a minority of the CPU purchases of those two undertakings taken as a whole. Intel contends, in essence, that, because the exclusivity requirement attached to those rebates related to certain segments of the requirements for CPUs of those OEMs, the classification of the rebates in question as ‘exclusivity rebates’ is wrong in law. In the appellant’s view, the General Court erred in considering that that has the same effect as the supply of ‘all or most’ of the customer’s total requirements. More specifically, that approach effectively deprives the ‘all or most’ requirement of any rigour: it leads to an unwarranted broadening of the scope of the concept of ‘exclusivity rebates’ that would be automatically condemned under the General Court’s approach to Article 102 TFEU.

196. The Commission contends that this ground of appeal should be dismissed for two reasons. First, it argues that the OEMs’ procurement freedom in certain segments cannot neutralise the restriction on the OEMs’ freedom to choose their source of supply in one segment of the CPU market. Second, the Commission maintains that Intel has misconstrued the relevant case-law of the Court which requires that the dominant undertaking’s competitors must be able to compete on the merits for the entire market.

2. Analysis

197. Like the second ground of appeal, the third ground of appeal is intimately linked to the first. In substance, it raises the issue of whether the General Court was right to consider that the rebates offered by the appellant to HP and Lenovo could be categorised as ‘exclusivi