European Commission confirms final texts for new EU rules for vertical agreements

On 10 May, the European Commission (the ‘Commission’) published final texts of the new Vertical Agreements Block Exemption Regulation (‘VBER’) and the accompanying Guidelines on Vertical Restraints (‘Guidelines’).  These two documents set out the full legal framework for the assessment of vertical agreements under EU competition law that will apply from 1 June. 

Although the process leading up to this moment started back in 2018, this means that businesses and their advisers have been given only three weeks to digest the final texts before they come into force.  While the main changes that will come into force on 1 June are largely as previewed in the draft texts that were published for consultation back in July last year, there are some surprises.

To discover and be surprised, download a copy of our briefing.

Intel Wins Historic Court Fight Over EU Antitrust Fine

by Stephanie Bodoni (26 January 2022)

  • Court topples $1.2 billion penalty levied by EU in 2009
  • Critics of EU procedures question time taken for ruling

Oliver Bretz quoted in Bloomberg and the Luxembourg Times on the Competition law aspect of the Intel case.

Intel Corp. won a historic victory in its court fight over a record 1.06 billion-euro ($1.2 billion) competition fine, in a landmark ruling that upends one of the European Union’s most important antitrust cases.

The EU General Court ruled on Wednesday that regulators made key errors in a landmark 2009 decision over allegedly illegal rebates that the U.S. chip giant gave to PC makers to squeeze out rival Advanced Micro Devices Inc.

While the surprise ruling can be appealed one more time, it’s a stinging defeat for the European Commission, which hasn’t lost a big antitrust case in court for more than 20 years. 

The Luxembourg-based EU court said the commission provided an “incomplete” analysis when it fined Intel, criticizing it for failing to provide sufficient evidence to back up its findings of anti-competitive risks. 

Margrethe Vestager, the EU’s antitrust commissioner, said her team would “study in detail what it can learn” from the judgment on the case, which was pushed through by her predecessor Joaquin Almunia.

Intel “always believed that our actions regarding rebates were lawful and did not harm competition,” it said in an email. “The semiconductor industry has never been more competitive than it is today and we look forward to continuing to invest and grow in Europe.” 

The judgment follows a 2017 ruling from the bloc’s top court, which criticized the General Court — the EU’s second-highest tribunal — for not properly checking all factual and economic evidence when it previously weighed Intel’s appeal. 

The EU commission in 2009 hit Intel with what was then the bloc’s biggest antitrust fine. It represented about 4% of Intel’s $37.6 billion in sales in 2008. Since then, Santa Clara, California-based Intel has been locked in a non-stop legal dispute with the EU’s antitrust arm. 

Wednesday’s victory may now offer encouragement for other companies to go to court. Many companies under investigation for monopoly abuse have opted not to fight hard since the chances of overturning the EU at court were viewed as low.

But European consumer group BEUC said the duration of the court fight reveals a major flaw in the EU justice system.

Twenty Years

“The ruling is disappointing, as we believe Intel engaged in anti-competitive behaviour which limited consumer choice,” said Agustin Reyna, BEUC’s director for legal and economic affairs.

“But it is even more striking that it has taken over twenty years for a decision on this antitrust case,” Reyna said. “What we need is an urgent, speeding up of antitrust procedures. It cannot take so long for the conclusion of a case in which there are such serious competition concerns raised.”

Following its investigation, the commission said it found evidence that Intel hindered competition by giving rebates to computer makers from 2002 until 2005 — if they bought at least 95% of PC chips from Intel. It said Intel imposed “restrictive conditions” for the remaining 5%, supplied by AMD, which struggled to overcome Intel’s hold on the market for processors that run the devices.

The court on Wednesday said the commission had failed to show “to the requisite legal standard” that the contested rebates posed an anti-competitive risk. 

“There is finally a degree of common sense creeping in,” said Oliver Bretz, a lawyer at Euclid Law in London. In the Intel case that means “to require that rebates have to be capable or likely to have anti-competitive effects, based on the evidence.”

The case is: T-286/09 RENV – Intel Corporation v. Commission.

The articles were posted in Bloomberg and in the Luxembourg Times.

Global Competition Review names Sarah Long to its “40 Under 40” list for 2020.

Congratulations to our Euclid Law Partner Sarah Long recognised as One of the World’s Leading Young Antitrust and Competition Law Partner for 2020.

The award recognises the top private practitioners and economists in the world and is a testament to Sarah’s professionalism, passion and dedication to the trade.

“[…] I was drawn to the intellectual challenge of practising competition law and the intersection between law, economics and business. This remains what I enjoy most about practising competition law: getting to really understand a business so that the advice can be tailored to suit the specific market and the commercial realities of that company.” – Sarah Long

Read the full interview here.