Goran Serdarević, Manager at Frontier Economics focusing on competition and regulatory issues in the communications sector, spoke at the annual competition law conference organised by the Faculty of Economics and Business in Zagreb today. His speech focused on competition economics and the use of economic evidence in abuse of dominance cases.

Goran discussed the recent decision by the European Court of Justice (ECJ) to bring Intel’s high profile “abuse of dominance” case back to the General Court (GC). The European Commission (EC) had initially found Intel guilty of having abused its dominant position in the market for Computer Processing Units (CPUs) in 2009, and imposed a record fine of €1.06 billion on the company. The EC’s decision was based on Intel offering loyalty rebates if customers purchased large parts of their CPU requirements from Intel, concluding that these practices were abusive on the basis that their sole object was to prevent the main rival, AMD, from competing in this market. The ECJ’s decision to review the case again was mainly due to concerns that the GC had not thoroughly investigated appeal points based on economic analysis, in particular the so-called “As Efficient Competitor” (AEC) test.

Goran discussed the ECJ’s position on the AEC test in more detail, and potential implications of the decision for the use of economic evidence in abuse of dominance cases. He concluded that the ECJ decision:

• Will likely strengthen the incentive of defendants to submit economic evidence (such as the AEC test) in abuse of dominance cases
• May have implications for cases in front of national competition authorities, which tended to rely more on legal / case law precedents and less on economic evidence in the past
• Does not, however, have any particular implications for the appropriateness of the economic analysis undertaken by the EC in the Intel case.

The GC review and any subsequent revision of the AEC test by the Commission, if the GC supports Intel’s appeal, will set an important legal threshold for the future application of the AEC test.

Frontier regularly advises on competition issues across Europe, including the Central Eastern Europe (CEE) and South Eastern Europe (SEE) regions.

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