Similarly, in the "preliminary view" of the European Commission, Intel has engaged in a variety of abusive practices to preserve its chip monopoly. In one instance, Intel allegedly provided substantial rebates to a leading PC retailer conditional on the company only selling Intel-based PCs. In another, it allegedly provided substantial sham rebates to a computer manufacturer "conditional on it obtaining all of its laptop CPU requirements from Intel." In other words, Intel is accused of raising chip prices and then giving significant "discounts" or "rebates" only to those customers who purchased all or almost all their chips from Intel. These quantity-based discounts or rebates were so large that customers apparently often paid no additional amount in total even though they received many more chips. If a customer purchased 80 percent of its chips from Intel, each chip might cost $10. But if it purchased 100 percent from Intel, each chip might cost only $8. This had the intended effect of making it impossible for Intel's only significant rival, AMD, to sell chips to these customers at any price. The sham discounts or rebates had no purpose other than to exclude Intel's main competitor.
World War 4.0
Consumers will win with pursuit, punishment of any anticompetitive practices by Intel
And there's more: The recent Statement of Objections said "Intel made payments in order to induce" a leading computer manufacturer "to delay the planned launch of a product line incorporating an AMD-based CPU." If true, it's difficult even to conceive of a legitimate business justification for this practice. To use an Olympic-year analogy, Intel is not being accused of taking steroids to run faster. Rather, it allegedly tripped its only rival. This is the opposite of traditional competition on the merits.
The Bush administration's Department of Justice caved during the Microsoft case's remedy stage. Years later, Microsoft still has a monopoly in the PC operating systems market. Assuming the truth of the current allegations, PC users everywhere should insist that the enforcers pursue the Intel cases vigorously, and this time impose a remedy tough enough to bring competition to this crucial market.
We need to remember that this really is a World War - tens of millions of computer users, from your grandmother to tomorrow's college student in the developing world, are affected by its outcome. The litigators pursuing this case must do more than speak loudly with just a small stick in their hands. They must swing an ax, fight and win the battle, and achieve a victory for consumers everywhere.
Robert H. Lande is the Venable professor of law at the University of Baltimore School of Law and a director of the American Antitrust Institute.
