EU files new charges against Intel

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All is not black and white

Most will applaud this EU initiative, indicating that it will prevent illegal business practices by monopolistic giants and invite competion, fair trade, innovation and lower prices. But of course, this is a fairly naive assessment of the EU's stance on antitrust laws. Things are not always so black and white.

In reality, we are facing a situation where companies losing sales to their competitors will lobby the EU to sue their rival to better compete with them. That in itself is an unfair advantage. And what would the EU gain from that? Money, of course. Lot's of it. Fines awarded by the EU go straight to their EU Central Fund. It does not go to the companies victims of illegal business practices. It goes in a central fund bank account managed by the EU. So why would AMD not sue directly Intel? Because that would be costly, time consuming... and they might lose. The EU are both judges and jury and when they set their sights on a company sitting on a mountain a cash (like Microsoft and Intel), you can be assured that a guilty verdict will be rendered.

The problem is not only fines, but that the EU can force a company to give out trade secrets to their competitors, like it was the case with Microsoft. Or even force the offending company to produce inferior products so that other companies can better compete. What if they come to a verdict that dictates that Intel must hand over all their future product schematics to AMD to facilitate competiton? A combination of revealing trade secrets + heafty fines could mean that Intel would eventually be forced to reduce their R&D initiatives. How would that help produce better products and lower prices.

And then there's the hypocrisy. The allegations presented by the EU concerning Intel's business practices, though devious no doubt, are actually quite common place. Countries of the EU consistently break fair trade laws by restricting imports and imposing heavy duty taxes to drive up prices of foreign consumer products, thus helping maintain healthy sales of the domestic lines (such as Japanese car imports in France, Italy and Germany). And I could cite hundreds of unfair practices in the energy industry, the automotive industry and retail industry that will never see the light of day in any Federal or EU court. Why is that? Why are we focusing so much on tech and telecom companies when it comes to antitrust suits?

Posted by: sanscartier@...   Posted on: 07/18/08 You are currently: a Guest | Members login | Terms of Use

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