EU Court lifts Intel antitrust fine
In the last few months, news concerning antitrust or competition policy has focused mostly on the change in ideological mood, so to say, in the US. Whatever influence Robert Bork and economists and jurists of the so-called Chicago School ever exerted on antitrust, it is gone. Now it is the time of so-called New Brandesians. People like new FTC chair Lina Khan, who think their mandate extends well beyond the traditional scope of antitrust policy. Recently, Khan said that “Congress wanted enforcers not just to act when you know, the third and fourth companies are merging or the first and second, but actually in the incipiency, when you said see trends towards concentration that those can also be important moments for enforcers to jump in”- a sort of competition Precogs, in a reference to the movie Minority Report.
In this context, unexpected news arrives from Europe, where antitrust enforcement traditionally tends to focus more on competitors (and preserving the weaker ones) rather than on consumer welfare.
The EU’s General Court in Luxembourg on Wednesday struck down much of a 2009 finding by the regulator that Intel had abused its dominant position by issuing loyalty rebates and payments that restricted rival chip maker Advanced Micro Devices Inc. from competing.
The court said that “analysis carried out by the commission is incomplete” and didn’t make it possible to establish a requisite legal standard for judging the competitive impact of rebates. Significantly, the court said it couldn’t identify the damages linked to Intel’s practices and so completely annulled the portion of the commission’s decision that related to the fine.
A central question for the court was whether the commission had completed a sufficient economic analysis to show that Intel’s alleged behavior harmed competition. Although the commission carried out an economic analysis of the case before imposing its fine, that work wasn’t assessed by the General Court when it dismissed Intel’s initial appeal in 2014.
Back in the day, I wrote a short piece on the Intel case, published by Economic Affairs, with Luca Mazzone, back then a brilliant youngster, now an economist with the IMF.
I think the paper is still informative. The gist of it is that the microprocessor market worked pretty well, supplying consumers with lower prices and better performing goods. The trustbusters’ interest in it can be explained perhaps because of the under quest for “imperfections” in the market, regardless of its successes. Deirdre N. McCloskey analyzed the phenomenon beautifully here.