The approach to fidelity rebates
Produced in partnership with Cooley LLP
The approach to fidelity rebates

The following Competition practice note Produced in partnership with Cooley LLP provides comprehensive and up to date legal information covering:

  • The approach to fidelity rebates
  • Approach to fidelity rebates before Intel
  • The Intel decision
  • The General Court’s judgment in Intel
  • Exclusivity rebates
  • Rejected defences
  • The Advocate General’s opinion
  • The Court of Justice’s judgment
  • Implications for rebate schemes
  • Qualcomm

The analysis of the circumstances in which a dominant company may grant rebates to its customers to encourage them to purchase from it is one of the most complex and controversial aspects of Article 102 TFEU. On the one hand, such rebates (which, after all, are a common feature of commercial life) may be efficiency-enhancing. On the other hand, the availability of rebates for customers who purchase from a dominant supplier may make it harder for a competitor to tempt away those customers and hence entrench the supplier’s dominant position.

While it is in principle possible to balance these objectives by assessing the effect of a rebate scheme, this typically requires an extensive factual analysis, which can make it difficult to know in advance whether a specific rebate scheme will be unlawful. For some time, there has been a long-running debate over the extent to which the Commission can condemn such rebates in principle, based only on their form, or whether it must first demonstrate that they are likely to lead to anti-competitive harm, by reference to the particular circumstances of the case. The question of whether, and in which circumstances, rebates should be condemned goes to the heart of Article 102 TFEU.

On 6 September 2017, the Court of Justice in Intel v Commission brought important clarification to the debate by endorsing an effects-based

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