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Michelin Case

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Michelin II – The treatment of rebates*
Massimo Motta 1 European University Institute, Florence, and Universitat Pompeu Fabra, Barcelona

27 November 2006

Forthcoming in a book on EU competition case studies, edited by Bruce Lyons (Cambridge U.P.). The author has not been involved in this case, and his information about the case was only and exclusively drawn from public sources, such as the Commission Decision and the Court of First Instance’s Judgment. I am very grateful to Chiara Fumagalli and Liliane Karlinger for their comments on a previous draft.



1. Introduction
In 2001, the European Commission found that the French firm Michelin had – via its various types of rebates - abused its dominant position in the French markets for new replacement tyres and retreaded tyres for heavy vehicles, and imposed a fine of EUR 19.76 million to Michelin. 2 Two years later, the Court of First Instance upheld the Commission’s Decision in its entirety. 3 In many respects, this case is exemplary of the strict formalistic approach followed in abuse of dominance cases by the European Commission and the Community Courts, which severely limit the possibility of dominant firms to resort to certain business practices, such as exclusive dealing, rebates, tying. Indeed, the EU case law has so far disregarded the actual effects of the allegedly abusive practices (the Commission does not need to prove that exclusionary effects have indeed taken place, nor does it need to show that consumers have been hurt), the mere possibility that they could distort competition being enough for a finding of infringement of article 82 of the Treaty. As a matter of fact, Michelin II is even stricter than previous decisions and judgments because for the first time it is found that a dominant firm cannot even resort to pure (non-individualised) quantity discounts, 4 a practice until…...

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