Feature

Intel and the new trustbusters

Europe fines Intel a record $1.45 billion for behavior the Bush administration found legal. What will Obama do?

What happened

Europe’s antitrust regulator fined computer chip giant Intel a record $1.45 billion for illegally stifling competition, by undercutting smaller rival AMD. The European Commission says Intel illegally cut deals with PC makers to lock out AMD, while Intel says it just offered volume discounts. Whether or not the EC proves that Intel broke EU laws, “there are questions about whether consumers were really harmed.” (BusinessWeek)

What the commentators said

Only the zealous EC would argue that consumers were hurt by Intel’s “heinous crime” of cutting prices, said The Wall Street Journal in an editorial. But it may not be alone for long: President Obama’s antitrust chief just announced “radical” changes that will move the U.S. away from its “consumer-harm test” model and toward the EU’s often anti-consumer policy of “protecting competitor welfare.”

The Obama team’s revisions were sorely needed, said The New York Times in an editorial, because President Bush’s antitrust division “bent so far backward to shield monopolies.” Bush’s team didn’t go after even one big company for trying to shut out a smaller rival. And look where we got letting the marketplace police itself.

Comparing the EC to the U.S. Justice Department is like apples and oranges, said Peter Gumbel in Fortune. The EC’s “clout” within Europe is “actually quite limited,” as it depends on approval from 27 member nations. That’s why it goes after big U.S. firms like Intel and Microsoft: politically, “it’s a lot easier to take on big and ugly Americans.”

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