"Continuing a tradition dating back at least as far as the famous disputes over the Boeing/McDonnell-Douglas and GE-Honeywell mergers, but having its fullest modern expression in its ongoing battle with Microsoft, the European Commission's announcement of a decision and $1.45 billion fine against Intel represents the culmination of both bad antitrust and excessive market intervention.
"The former problem stems from Europe's enforcement of its competition laws on evidence of harm to competitors rather than competition. While harm to competitors can be evidence of (or a prelude to) harm to competition, the theories supporting this are weak, controversial, and unsupported with evidence. At the same time, Intel's behavior undeniably results in significant, immediate gains to its customers, who have seen remarkable increases in computing power coupled with equally remarkable decreases in cost over the course of the last 10 years or so. The latter problem, excessive market intervention, actually arises out of the first. Competition policy that is concerned with the fortunes of particular firms will almost inevitably find justification for market intervention in markets where economies of scale and network effects create market winners and losers.
"Although the EU has claimed to be moving away from an antitrust that manipulates markets to mirror a bureaucratic conception of 'perfect competition,' and toward an antitrust concerned with actual competitive effects, EU law and enforcement policy make 'effects-based' antitrust, particularly when the industry leader is a strong foreign competitor, an unlikely outcome."
Contact Information for Geoffrey A. Manne:
Direct: 971.250.4339
Email: gmanne@lecg.com
About Geoffrey A. Manne:
Currently the Director of LeCG, a global expert services and consulting firm, Manne also serves as Lecturer in Law for Lewis & Clark Law School. In this capacity he lends his expertise to various law school endeavors. Before joining LeCG, Manne worked for Microsoft as a Law and Economics Specialist. Prior to that he served three years as an Assistant Professor at the law school. Immediately prior to joining the faculty in 2003, he practiced law at Latham & Watkins in Washington, DC, where he specialized in antitrust litigation and counseling. He also practiced in the areas of bankruptcy and commercial litigation and did some appellate work. Before private practice Manne was a Bigelow Fellow at the