by Ronald Fink
The record-setting penalty that the European Commission's anti-trust authorities levied against Intel this week for anti-competitive behavior could trigger similar action in the U.S, attorneys familiar with the case said.
The EU imposed a $1.45 billion fine on Intel. The penalty substantially exceeded the EU's previous largest fine, a $655 million levy against Microsoft in 2004.
Meanwhile, the head of the Department of Justice's anti-trust division, Christine Varney, indicated in a speech this week in Washington, D.C., that the Obama administration would take a much firmer approach to anti-trust enforcement than its predecessor. A report in the New York Times suggested that the administration planned to coordinate its activities with the EU.
The EU said Intel had paid computer makers to postpone or cancel plans to launch products that used Advanced Micro Devices chips; provided illegal, secret rebates so computer manufacturers would use mostly or entirely Intel chips; and paid a major retailer to stock only computers with its chips.
The EU ordered Intel to "cease the illegal practices immediately to the extent that they are still ongoing."
Although the EU has long been considered more aggressive than the U.S. in anti-trust enforcement, the gap widened considerably under the Bush administration, one lawyer told CIOZone. The attorney said that the DoJ under Bush was widely considered to have taken a "radical" approach by historical standards in leaning the other way.
Under Obama, said the lawyer, "you'll almost certainly find us more in alignment with the Europeans."
There are limits to such an alignment, however, reflecting the degree to which U.S. enforcement actions can be fought through the courts. Whereas the EU's decisions can only be appealed through the commission itself, defendants in the U.S. can battle the government all the way to the Supreme Court. And the high court has recently been quite cautious when it comes to anti-trust enforcement action against individual companies.
"U.S. court have not been receptive" to arguments in favor of enforcement against so-called "single firm" action, said Carl Hittinger, a partner in the Philadelphia office of law firm DLA Piper. "The EU doesn't have that issue."
Nonetheless, the DoJ's Varney, who is assistant attorney general in charge of the agency's anti-trust division, told the Center for American Progress on Monday that Justice has repudiated guidelines known as the Section 2 report. The agency developed those guidelines last September under the Bush administration. Even the Federal Trade Commission criticized them at the time as a "blueprint for radically weakened enforcement."
Calling the guidelines "excessively cautious, Varney went on to say that "withdrawing the Section 2 report is a shift in philosophy and the clearest way to let everyone know that the antitrust division will be aggressively pursuing cases where monopolists try to use their dominance in the marketplace to stifle competition and harm consumers."
Albert Foer, president of the American Antitrust Institute, said that the FTC may not even need Varney's support to go after Intel. He said that he believes the FTC—along with several states led by New York—is already investigating Intel along the same lines as the EU. He noted that several other nations, including Japan and Korea, have previously investigated Intel and found it liable.
"Another detailed finding, this time by the EU, that is in line with what other national investigations have supported would put the FTC in a rather awkward position if it chooses not to go forward with its own investigation," Foer said. He added that he said he saw no reason that the FTC had to wait for the DoJ to act, and that the FTC had good relations with the EU even under the Bush administration.
Last week, Google confirmed that the FTC was investigating whether CEO Eric Schmidt's directorship of Apple violated anti-trust provisions against interlocking boards of companies that compete with each other. Experts said the move was another indication that the Obama administration would take a much harder line against potentially anti-competitive behavior than its predecessor did.
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