Thursday, July 2, 2009
Posted by D. Daniel Sokol
ABSTRACT: On May 13th the European Commission levied a fine of $1.45 billion on Intel for violating its competition law rules by offering volume-based rebates to dealers and to computer manufacturers. The rebates were deemed to have excluded Intel’s rival, AMD, from the market for computer chips. Intel is also alleged to have pressured dealers and manufacturers to set limits on the quantity of AMD chips that they would purchase.
The case raises troubling issues when compared to American antitrust law, with respect to procedure and with respect to its impact on the competitive incentives of large firms.
There are questions of interpretation and evidence here, as in any other case. Intel disputes the claims that they set limits on AMD chips and that they acted with an intention to exclude AMD. From Intel’s perspective, this is just a case of price competition. The EC has pitched the case as one of exclusionary dealing involving several anticompetitive strategies.
Questions of interpretation and evidence are best left to the courts. As a commentator looking at the case from a distance, I have little worthwhile to offer on the substance of these issues. However, one point I think is worth noting is that there is a process for evaluating questions of evidence and interpretation in the EU that appears to be quite different from that in the United States.