Conditional rebates and Intel: A step backwards by any standard?

Abstract

This paper considers the law on conditional rebates. It sets out the changes introduced by the Court of Justice of the European Union (CJEU) Intel decision and how these have been applied in the General Court Intel Renv case. It is explained that the changes are part of a broader move to bring EU competition law in line with a Consumer Welfare Standard (CWS). An analysis of the new test then reveals that it is flawed for five reasons: the new test ignores the fact that low prices and exclusion are separable. The test incorporates the As-Efficient Competitor test, which only protects firms with low costs, not those that are more competitive as a whole. The test introduces a new standard of harm, which means that the law no longer prevents the restriction of competition, but rather prevents making it impossible for a firm with the same costs as the dominant undertaking to compete, which is a different standard. The new standard diminishes the deterrent effect of the law. Finally, compared with the original test, the CJEU test fails to maximize consumer surplus (despite that being the aim of the CWS). Therefore, there is no reason to retain the test and it is recommended that it is reversed.