Column : Lapse of Intel-igence

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: The $1.06-billion euro judgement against Intel by the European Commission is the largest anti-trust judgement in Europe, eclipsing the Saint Gobain (896 million euros, 2008) and Microsoft (497 million euros, 2004) verdicts of yesteryears. That it isn’t the first such judgement against Intel (which owns nearly 80% of the global market share) in its efforts to pulverise AMD, is cause for concern for the chip-making giant which also faces sanctions in Japan and South Korea, with talk of impending litigation in other countries as well. While this may not help its biggest competitor AMD gain significant market share beyond its present 20%, it puts anti-trust at the forefront of discussions once more. That both Intel and AMD are American entities makes this judgment less likely to be tainted by talks of bias or anti-American sentiment.

The EC judgment revolves around the business practices followed by Intel and the abuse of the dominant position it enjoys in the industry. The EU anti-trust/anti-competition law model spans three basic tenets of competition law and economics: anti-competitive agreements, abuse of dominance and merger control. While the basic microeconomic theories of perfect competition, free and clear fundamental entry and exit into markets and ease of migration across industries are idealistic at best, anti-trust law attempts to induce the semblance of a (more) level-playing field for smaller competitors in an industry dominated by large players.

The practice of anti-trust promotes competition, and in the US and Europe, it is a well-honed area of the law, enforced by authorities with specialisation in this area. The US leans heavily on the Sherman Act for single-firm monopolistic conduct, and on the Clayton Act for collusion between firms in an unethical manner. The key concept is the restraint of trade and commerce, and it is to protect consumers and competitors that these acts were established. The OECD also deals with anti-trust, and its Guiding Principles for Regulatory Quality and Performance stress the need to ‘eliminate unnecessary regulatory barriers to trade and investment through continued liberalisation’ and the need to enhance market openness throughout the regulatory process, thus strengthening economic efficiency and competitiveness.’