Target: Intel, and Competition

Wall Street Journal ^ | May 14, 2009

[reaganaut1]

The world is returning to the 1970s on most economic policies, so why not antitrust too? Judging by events this week, antitrust enforcement in the U.S. and Europe is in for a major comeback, whether or not consumers benefit.

Yesterday in Brussels, the European Commission imposed a record antitrust fine of $1.45 billion on Intel for the heinous crime of discounting computer chips in its fierce and long-running competition with AMD. Meanwhile on Monday, President Obama's new antitrust chief, Christine Varney, issued a radical revision of the Department of Justice's own antitrust enforcement standards. Ms. Varney's ambition seems to be nothing less than bringing Europe's corporatist approach to competition policy to the U.S. To succeed, she will have to flout or overturn decades of Supreme Court precedent on the limits of U.S. antitrust law.

But Ms. Varney can be sure of a friendly ear in Brussels, which has never let go of the idea that competition is best when there isn't much of it. The Commission's attitude is on full display in the fining of Intel for allegedly abusing its dominant position in the market for computer processors. For years, Intel and AMD have been essentially the only game in town for computer CPUs. The Commission's complaint amounts to little more than a whinge that Intel won more of this business than the Commission would prefer.

This is couched in dark-sounding talk about Intel paying computer makers not to buy AMD chips. But remember there is only so much demand and there are only two major market players. So any order won by Intel by offering a discount or a rebate is, by definition, an order lost by AMD. And yet the Commission bizarrely claims that "millions of Europeans" have been harmed by this price war.

[reaganaut1]

Intel the "monopolist" keeps selling faster computer chips at lower prices. The government education monopoly produces a product that continually gets more expensive but does not improve in quality. Of course it's the private company that is attacked.

[eyeamok]

gee were awful sorry, we no longer sell any products within the EU.
Thank You
Intel

then watch them squirm and reverse course on their antitrust shenanigans

[livius]

They’ve been after Intel and Microsoft for a long time, and it’s really motivated by jealousy. I was there when the initial Microsoft attacks began, and it was simply because they were annoyed that people really wanted MS consumer products, they wanted integrated applications, and the Europeans hadn’t created anything that could compete. There was a lot of overt anti-Americanism in the original attacks on MS.

There’s probably some latent anti-Americanism in the attacks on Intel, although I suspect that a lot of it is also a reflection of what’s going on here, where governments see successful private companies and industries as their rivals and do everything to bring them down or at least make them less successful.

[Inwoodian]

Who gets the 1.45 billion dollar fine?

[CodeToad]

Intel should just pull back 100% from anything but US sales. That would still be a good profit. Let the Euroweenies buy 100% AMD and have no parts replacements for Intel systems.

[webboy45]

The WSJ has slanted this story. Europe’s complaint is that Intel paid retailers to not carry systems with AMD chips. This isn’t the first time Intel has been accused of doing this.

[indthkr]

"Who gets the 1.45 billion dollar fine?"

Probably AMD's european operations via the EU........