Wednesday, May 13, 2009
Posted by D. Daniel Sokol
This has been a difficult week for dominant firms. First, Christine Varney announces that the DOJ will withdraw the Section 2 Report. Today, the European Commission has fined Intel a record amount for abuse of dominance. Previously, Asian jurisdictions (Japan and Korea) have found against Intel. Next up for Intel - a US trial against AMD. The Wall Street Journal covers the story here, and the FT here.
As the Commission press release notes:
The Commission has found that Intel excluded its competitor in two ways:
- through illegal loyalty rebates
- by paying manufacturers and retailers to restrict the commercialisation of competitors' products.
These illegal actions were designed to preserve Intel's market share at a time when their only significant rival - AMD - was a growing threat to Intel's position. This threat was widely recognised by both computer manufacturers and in Intel's own internal documents seen by the Commission.
European jurisprudence has been more amenable to claims by rivals of exclusionary conduct than US jurisprudence. Even with a more aggressive set of US antitrust enforcers, it is not clear to me that existing case law in the US will favor plaintiffs in exclusionary conduct cases. It has been quite some time since a US Supreme Court antitrust decision has found in favor of plaintiffs.