Intel Corp. v Commission Case Study

Paper Type:  Essay
Pages:  6
Wordcount:  1635 Words
Date:  2022-03-29

Essential Facts

This was an appeal filed by Intel Corporation Inc. before the Grand Chamber of Court of Justice of the European Union challenging the decision of the General Court of the European Union (Intel Corp. v Commission [2017]). The appeal follows a decision by the General Court to dismiss an action by Intel to have the European Commission's decision annulled. Intel, a company based in the US, is engaged in the trade of manufacturing, developing, designing, and marketing communication and data processing devices including central processing units (CPUs) for computers.

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The present dispute is about the market for x86 CPU computer processors which Intel manufactures. After one of Intel's competitors, Advanced Micro Devices Inc. (AMD), lodged a complaint with the EC against Intel accusing it of anticompetitive practice or abuse of dominant market position, the commission conducted several rounds of investigations and found Intel liable for engaging in the violation of Article 102 of the Treaty on the Functioning of the European Union (TFEU). In particular, the commission accused Intel of creating exclusive conditional rebates with other original equipment manufacturers (OEMs) including HP, Lenovo, and Dell with the intention of excluding AMD out of the x86 CPU market. The agreements were such that Intel would grant these OEMs conditional rebates if they agreed exclusively buy all their CPUs from Intel Corp. Further, Intel was also accused of paying the OEMs and colluding with them to restrict, cancel, or delay dealing in any product containing AMD computer processing units (Intel Corp. v Commission [2017]).

After finding that Intel had engaged in anticompetitive conduct contrary to Article 102 of the TFEU, the European Commission fined Intel EUR 1.06 billion which was upheld by the General Court. Intel appealed to the Court of Justice of the European Union's Grand Chamber alleging, inter alia, that the General Court (GC) made an error of law and fact by failing to consider all the relevant circumstances of complaint against it. It also claimed that the GC had failed to first determine whether Intel's conduct had any anticompetitve effects on the market for CPUs within the European Economic Area (EEA). Intel also argued on appeal that the General Court lacked jurisdiction to hear the appeal from the EC and that its rights of defense were violated during the commission's hearing of complaints against it by not being given adequate opportunity to defend itself.

Judgment of the Court

The appellate court rejected Intel's claim that the General Court lacked the jurisdiction to hear the complaint. The court argued that based on the Beguelin Import case (1971), the fact that one of the undertakings involved in an alleged anticompetitive agreement is located outside the EU cannot in itself foreclose Article 101 of TFEU's application. According to the Court, both Articles 101 and 102 of the TFEU are aimed at preventing unilateral or collective actions by companies or undertakings that have the overall effect of restricting, distorting, limiting, or preventing genuine competition among firms within the internal market.

The court also argued that if the provisions of competition laws were made only to affect the conduct of undertakings in places in which an agreement was formed, it would be easier for such undertaking to evade the law to their benefit. Hence, the General Court was properly seized of the matter pursuant to Articles 101 and 102 of the TFEU. The court's judgment on the other ground of appeal involving allegations of procedural irregularities impacting on Intel's rights to defend itself was that since the General Court had skipped some procedures during the trial for the sake of completeness, its decision cannot be set aside on this basis alone. Thus, the court rejected this claim

On the issue of whether or not the General Court made an error by not examining the rebates based on the relevant circumstances, the court's judgment was that since the General Court failed to give due consideration to Intel's claims on the use of As-Efficient-Competitor (AEC) test, its judgment must be set aside. The appellate court argued that the lower court failed to first ascertain, using the appropriate test, whether or not implementing loyalty rebates constituted an abuse of dominant position by Intel. Moreover, the court held that exclusive arrangements among firms such as those involving conditional rebates may be legal where the dominant undertaking successfully proves that their objective justifications outweigh their foreclosure effects and that the agreement does not foreclose worthy competitors of the dominant firm.

An Economic Analysis the Case

Impacts of Intel's Behavior on Competition and Consumers

The behavior by Intel involving the company giving conditional loyalty rebates to other undertakings requiring them and their customers to purchase UCUs exclusively from Intel may have various effects on both consumer and competitors. One of the impacts of Intel's conduct on consumers or users of its products is that it is likely to expose them to high prices of CPUs.

With the lateral or horizontal agreement between Intel and potential competitors such as Lenovo, Intel and the firms that have been granted rebates are likely to unfairly increase the prices of their CPUs. Hence, consumers of Intel products are likely to suffer because they do not have any otherwise but to purchase CPUs from either Intel or the undertaking that have been given the exclusive rebate to purchase and sell Intel products. Moreover, consumers of Intel products are likely to be affected by its anticompetitive conduct in that they may not be able to enjoy a variety of products from different firms. The exclusive dealing between Intel and other original equipment manufacturers means that these other companies cannot sell or stock the products of Intel's competitors and hence consumers have a limited choice when it comes to CPUs.

Further, Intel's behavior will most likely harm competition in that it will deny other undertakings in the CPU manufacturing industry from accessing the market. The most important consideration, however, is whether Intel's conduct or behavior is likely to lead to, strengthen, or create a dominant position. From the facts of the case, it is clear that Intel's behavior gives it market power and creates a collective dominance on the market thus pushing competitors out of the CPU market. Furthermore, the behavior by Intel will most likely cause instability in the market, dilute transparency of market conditions, and limit fair competition among the undertakings in the relevant market and industry.

The appellate court in the case remanded the case back to the General Court to consider all the relevant factors required to establish whether Intel's alleged anticompetitive conduct would result i inn a dominant position being created or strengthened. This decision by the court indicates the recognition by the court of the possibility of Intel's behavior being found to be anticompetitive upon the consideration of relevant factors. Even though the court found that the exclusive rebates will not foreclose efficient competitors of Intel and drive them out of business, it would be fair to argue that Intel's behavior was intended to have exactly this effect of foreclosing competitors and locking them out of the market so as to give Intel a dominant position in the market. Hence, as Nihoul (2014) argues, it is time for European courts to adopt a rule of reason in finding an abuse of dominance by undertakings to shield less competitive and efficient firms from being driven out of the market.

Economic Implication of the Decision

The judgment in Intell v. Commission (2017) will most likely have serious economic effects particularly on companies within the EU region. One of the economic implications of the court's decision is that it will be now easier for companies to engage in anticompetitive practice and go unpunished and difficult for completion bodies to prove liability. The decision also raises the threshold required to prove anticompetitive conduct among firms and hence it will have an immediate negative impact on the European markets and economies. It will enable giant firms to create and abuse market dominance without being held responaible and accountable for their behavior.

Consequently, many small companies will be pushed out of business leading to loss of jobs and damaged national economies. In this case, the court also gave a rather narrow definition of the relevant markets for CPUs and hence this will most likely impede the ability of the small firms in the same industry to compete internationally. The market dominance enjoyed by Intel and other giant companies will force some less efficient undertakings to move out of the market or be unable to venture into foreign markets. The collective dominance will also lead to market inefficiency within the larger EU region because the forces of demand and supply will no longer operate as usual. The anticompeitive practices and behaviors by compamies will make the market less attractive to other potential firms and hence discourage investments in national economies.

However, as Petit (n.d.) observes, the decision in Intel will also have positive economic effects in that it the court announced a more economic approach to the interpretation and enforcement of EU competition law and policy. The decision also removes many of the teleological, conceptual, and practical uncertainties that used to exist in the EU competition law (Petit, n.d.). With the AEC test for proving abuse of dominance, there is now more predictability which is economically important for companies as they enter into various agreements, such as mergers.


Intel Corp. v Commission (Case C-413/14 P, 6 September 2017). Retrieved March 22, 2018, from

Nihoul, P. (2014). The ruling of the General Court in Intel: Towards the end of an effect-based approach in European competition law. Journal of European Competition Law & Practice, 5(8), 521-530

Petit, N. (n.d.). The judgment of the EU Court of Justice in Intel and the rule of reason abuse in dominance cases. Retrieved March 22, 2018, from

Cite this page

Intel Corp. v Commission Case Study. (2022, Mar 29). Retrieved from

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