FairSearch - for the right result

The Intel Judgment:

Nothing changes for the Google appeal

Statement by Thomas Vinje, FairSearch counsel and spokesman:

Some recent press statements have suggested that the ruling in the Court of Justice’s Intel case may be favourable to Google in any appeal of the Commission’s comparison shopping decision.  I wish to provide some clarifications in that respect, as I do not believe this to be the case.

On 6th September 2017, the Court of Justice of the European Union set aside the General Court’s (GC) judgment in the Intel case as a result of its failure to analyse whether the rebates at issue were capable of restricting competition[1].  The GC held that it did not need to examine Intel’s arguments on this score because such rebates “by their nature” foreclose competition.

The Court of Justice clearly found that exclusivity rebates should no longer be assumed to be capable of foreclosing competition, and specifically that a dominant firm’s offer of rebates in return for exclusivity must be assessed by reference to that conduct’s capacity to foreclose equally-efficient rivals.  Henceforth, both the Commission (as it actually did in its Intel decision) and the Courts must analyse whether any rebates at issue are capable of foreclosing competition.

Not a rebate case

The Court of Justice’s judgment changes the landscape for rebates cases.  But the Commission’s comparison shopping decision is not a rebates case, and the Intel judgment is irrelevant to how the Courts will approach any appeal of the Commission’s decision.

In cases involving conduct other than rebates and similar behaviour, there has never been any presumption of foreclosure.  Hence, the Court’s finding that in rebates cases the Courts must now consider whether the relevant conduct is capable of foreclosing competition changes nothing in those other sorts of cases.

Detailed review

In other words, in all the cases where the Commission already (before the Intel judgment) had to show that the conduct at issue was “capable of foreclosing competition”, nothing changes.  This includes the Commission’s comparison shopping decision, where clearly the Commission has at great length analysed whether Google’s conduct was capable of foreclosing competition – and where the Courts on any appeal inevitably would have evaluated the Commission’s analysis on this score.

In the case of Google’s appeal, the Commission’s assessment will be subject to a detailed review by the General Court — and it would have been so irrespective of the Intel judgment, insofar as the Google Search case does not fall with the category of presumed illegal conduct addressed by the Intel judgment.

Moreover, the Intel judgment does nothing to change the standard of foreclosure to which Google’s conduct must be subjected.  The Court sticks to its “capability of foreclosure” standard.  In other words, both before and after the Intel judgment, the Commission needs only to prove that conduct has a “capability” to foreclose competition.  And the Commission applied precisely this foreclosure standard in its comparison shopping decision.

In sum, nothing in the Intel judgment requires either the Commission to do anything different from what it has done or the Courts to do anything different from what they would have done on any appeal of the comparison shopping decision.  There is nothing in the Intel judgment upon which Google could rely that it could not already have relied upon in the Court’s previous jurisprudence.

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[1] The capability to restrict competition is the so-called “standard of foreclosure” that needs to be proved under EU law in abuse of dominance (Article 102 TFEU) cases.