OEMs including HP, Acer, and Lenovo. According to the Decision, the OEMs were planning the introduction of a specific AMD-based product, but in each case, Intel paid the OEMs to delay, cancel or otherwise restrict the commer-cialisation of the planned AMD-based products. The Commission also noted that in each case, the conduct of Intel had a material effect on the decision-making of OEMs in that they delayed, cancelled or otherwise restricted their commercialisation of the AMD-based computers.
Nevertheless, it is doubtful whether this was really so. For instance, in the case of Acer, the AMD-based products at issue were a laptop and a desktop computer series based on Athlon 64 x86 CPUs produced by AMD. The Com-mission presented no evidence to support the conclusion that Intel paid Acer to restrict the commercialisation of the products at issue. What the Commission stated was that ‘[c]ontemporaneous evidence demonstrates that Acer execu-tives experienced both direct and indirect pressure from Intel to not launch Athlon 64-based products, or not to be the first OEM to launch them’60. The Commission added that the understanding of Acer was that if it did not follow the request by Intel, certain Intel funding would fall61.
Indeed, Intel might react negatively to the relationships between Acer and AMD, and Acer later decided to postpone the launch of its AMD-based laptop computer series. Nonetheless, some negative response from Intel, a major com-petitor of AMD on the x86 CPU market, was not at all surprising. The pressure from Intel does not seem to be sufficient for the Commission to conclude that Intel paid Acer to restrict the commercialisation of the products at issue.
60 Supra note 1, para. 1660.
61 See id. para. 1661.
It must also be stressed that the evidence presented by the Commission does not provide a sound basis for the conclusion that ‘[i]n each case, Intel’s conduct had a material effect on the OEMs’ decision-making in that they de-layed, cancelled or otherwise restricted their commercialisation of the AMD-based computers’. For example, in the case of Lenovo, the Commission only referred to the fact that Lenovo entered into a written agreement with AMD to launch AMD-based laptop computers in 2006, and this proposed launch was postponed twice62. According to the Decision, ‘[t]he first postponement happened in the context of negotiations of increased funding with Intel. The second postponement occurred as a condition of increased funding from Intel as agreed in June 2006. Finally the launch was cancelled’63. As far as the first postponement was concerned, the Commission obviously failed to show that it was the funding negotiations concerned that led to the postponement of AMD-based laptop computers.
4. Conclusion
In the Intel Decision, there could be one relevant market of x86 CPUs for all computers, namely desktop, laptop, and server computers, or there could be three relevant markets of (1) x86 CPUs for desktop computers; (2) x86 CPUs for laptop computers; and (3) x86 CPUs for server computers. As to the mar-ket power of Intel in the relevant marmar-ket(s), Intel consistently held very high market shares in an overall x86 CPU market and in any of the sub-markets.
The Commission also identified certain barriers to entry and expansion in the relevant market(s). According to the Decision, Intel should be responsible for two kinds of abusive conduct. The first is the implementation of a rebates scheme by Intel and the other is the naked restrictions imposed by Intel on three OEMs, including HP, Acer, and Lenovo.
62 See id. para. 1663.
63 See id. para. 1663.
As regards the rebates scheme, the reasoning behind the Intel Decision is simple and clear: Intel is a dominant firm on the markets of x86 CPUs and this CPU producer abused its dominant position by operating an exclusionary rebates scheme. The application of as efficient competitor test indicates that the effective prices of Intel products were below AAC, therefore an as efficient competitor might not able to compete with Intel. As far as the naked restric-tions are concerned, Intel paid the OEMs to restrict the commercialisation of planned AMD-based products. The Commission also noted the conduct of Intel had a material effect on the decision-making of OEMs in that they restricted their commercialisation of the AMD-based computers.
This study indicates that the Intel Decision should be annulled by the General Court since it is significantly flawed. First of all, in the present case, the Commission did not take into serious account the dynamics of the relevant markets. The Commission was correct only to the extent that Intel held large market shares of the relevant markets at that time, but the market power evalu-ation by the Commission was defective mainly because Intel was not able freely to exercise the market power. Since Intel was faced with OEMs that had extraordinary bargaining power, the argument by Intel before the General Court should be based on how these OEMs were ready to play Intel and its ma-jor competitor AMD off each other. Also, Intel should elaborate on why it was incapable of behaving independently from the OEMs.
Second, the Commission’s explanations for the theory of as efficient competitor test do not help the public fully understand how the Commission performed this test. On the one hand, the Commission does not provide an ex-ample illustrating how the test was performed. On the other hand, the crucial f igures concerning the rebates scheme were unavailable owing to conf idential-ity concerns. The myth of how the test was applied by the Commission would presumably create chilling effects on numerous firms in various European
markets, particularly those holding dominant positions. To eliminate the risk of being punished by the Commission, the dominant firms must carry out a regular examination of their own cost structures. It must be emphasized that the Commission has employed AAC as a benchmark to determine whether a rebates scheme has exclusionary effect. The Commission has focused its atten-tion on the average cost of the incremental output, instead of that of the entire output. Proved consumer harm has never been a necessary element of as eff icient competitor test.
Third, this Article argues that the rebates system in question was a scheme made under the influences exercised by Intel, AMD, and the OEMs. It is worth noting that Intel and the OEMs made every effort to alter the level of rebates with a view to increasing their profits on the relevant market(s). Fourth, given the huge portion of economic analysis based on as efficient competitor test in the Decision, it is obvious that the Commission applied the Guidance Paper, in particular as efficient competitor test set out in the document, to the Intel case.
The way in which the Commission applied the test shows that the Commission did so as if the Guidance Paper was legally binding.
The General Court should focus on whether it was possible for Intel to re-alise that the test would be applied to assess the rebates scheme at issue, which could eventually lead to the conclusion that the implementation of the scheme constituted an abuse of dominant position under Article 102 TFEU. According to the Decision, the Commission adopted the measure after Intel implemented the rebates scheme. As it was impossible for Intel to get access to the unpub-lished document, the Intel Decision should be annulled for that the application of as efficient competitor test violated the principle of legal certainty. Where the Commission is entitled to make use of any economic tools in dealing with an Article 102 TFEU case, such enforcement may jeopardise the very core of the competition law system. This study argues that as efficient competitor test
can be applied if it is in the future incorporated into relevant Treaty provisions or legislation in the Union. Intel is under no legal obligation to perform the test to assess its own rebates scheme, as there is so far no such legal requirement under EU competition law.
As regards the issues of naked restrictions, the Commission failed to pres-ent sufficient evidence to support its view that Intel paid the OEMs to restrict the commercialisation of planned AMD-based products. Also, the Commission failed to prove that the conduct of Intel had a material effect on the decision-making of OEMs in that they restricted the commercialisation of AMD-based computers.