European Commission reaffirms tough stance on loyalty inducing rebates

After an investigation of two and a half years, the European Commission (“EC”) yesterday imposed a €997 million fine on Qualcomm for “illegally shutting out rivals” from the market for LTE baseband chipsets using significant payments to an important customer, Apple, in return for exclusivity. 

The EC’s decision in Qualcomm is further confirmation that abuse of dominance cases are at the top of the EC’s enforcement agenda following, as it does, so close on the heels of the €2.4 billion fine imposed on Google in the Google Search case last summer.

After an interesting statement yesterday by Commissioner Vestager, one can be optimistic that the decision, when published, will provide some useful guidance for dominant firms to help them tailor future dealings with customers and suppliers. Specifically, the Commissioner confirmed that the Qualcomm decision is “fully compliant” with the European Court of Justice’s (“ECJ”) Intel judgment of last year.The ECJ’s Intel judgment called for a more effects-based approach to the assessment of rebates by the EC, meaning that the EC needs to provide reasoned decisions which analyse all of the relevant circumstances when assessing the legality of loyalty rebates.

Read our summary report on the tough stance on loyalty inducing rebates.