The European Court of Justice has ruled that authorities investigating alleged abuses of dominant position by means of exclusivity clauses must assess the validity of economic evidence, including “as efficient competitor” tests, presented by the dominant firm.
On 31 October 2017, the Italian competition authority (AGCM) found that Unilever had abused its dominant position in the Italian market for “out-of-home” packaged ice cream, imposing a fine of EUR 60.7 million. AGCM dismissed economic evidence produced by CRA, most importantly in the form of an “as efficient competitor” test, claiming it was not required to examine the economic analyses in detail since, unlike the “retroactive” rebates in the Intel case, the contested contracts included explicit exclusivity clauses. During the appeal, the tribunal (Council of State, Italy) referred this issue, among other questions, to the European Court of Justice (ECJ).
On 19 January 2023, the ECJ stated that “both rebate practices and exclusivity clauses are capable of being objectively justified or of having the disadvantages which they generate counterbalanced, or even outweighed, by advantages in terms of efficiency” and that authorities “must ensure, at the stage of classifying the infringement, that those clauses were, in the circumstances of the case, actually capable of excluding competitors as efficient as that undertaking from the market.” The ECJ then ruled that, while AGCM was not legally obliged to conduct an “as efficient competitor” test, “if the results of such a test are submitted by the undertaking concerned during the administrative procedure, the competition authority is required to assess the probative value of those results.”
A CRA team advised Unilever in the proceedings before the AGCM and the subsequent referral.
For more details, see the court’s judgement here.