What does an antitrust attorney think of the FTC action against Intel?


Jun 21, 2002
Complete article by Lars H. Liebeler in The Huffington Post: True "Equality" In the Chip Market?

Some interesting quotes:

There are countless ironies and inconsistencies in the FTC's complaint. The FTC alleges that when Intel learned that an OEM was considering building a computer with AMD chips that it threatened to "penalize" the OEM by suspending its delivery of Intel microprocessors. Handing over business to a competitor is an odd response to a competitive threat, if what the FTC alleges is true.
But, back to the FTC's primary claim that Intel's repeated response to an OEM's interest in using a competitor's processors was to lower its prices to keep the business. In a remarkable re-characterization of absolutely unremarkable marketplace behavior that occurs each and every day around the world in every industry, the FTC calls Intel's price cuts and rebates "bribes." This is similar to calling a "sub club" card entitling lunchtime consumers to a free sub after buying five at regular cost an unlawful "kickback" scheme.
The current FTC complaint places Intel between the proverbial antitrust rock and hard place. Aggressive competition here has led to the FTC's complaint. But, what would have happened if Intel failed to compete? Hypothetically speaking, let's suppose that Intel was prescient enough to guess that the FTC would challenge its aggressive price cutting and large market share in the CPU market. In order to insure that the FTC would be comfortable with market dynamics it could have called a "truce" with AMD, for example, and agreed that it would not cut prices of its chips until the AMD share of the microprocessor market reached say 40%. Intel also might have agreed to share technology with AMD. Sounds fair doesn't it? This is in fact essentially a paraphrase of the FTC proposed remedy in the case just filed.

But how quickly would a case under Section 1 of the Sherman Act, which bars agreements between two firms in restraint of trade, be filed if such an agreement were even discussed? How about instantly. Indeed, the entire concept that a participant in the marketplace should not engage in price cutting in an attempt to retain or grow market share (i.e., to edge out competitors) is an anathema to the Sherman Act.

I'm sure some will ask "who is this guy". I did too, so I've already done your Googling for you: http://tl-lawfirm.com/pages/page.asp?page_id=71507.


Yes I'm aware of that. The point is, one lawyer comes out and says 'blah blah intel are innocent'.

Who cares? I'm saying they are guilty and you know what? Chances are I know more about it than this Lars Liebeler does. Hell *you* probably know more about it.