Legal News

Friday Antitrust Roundup: Intel Gets Served, More!

By Ashby Jones

We’ve got a few antitrust tidbits to throw at you this afternoon. The big news on the trust-busting front: the Federal Trade Commission has opened a formal antitrust investigation of Intel’s business practices in the microprocessor market, a move which has long sought by smaller rival Advanced Micro Devices. The development comes a day after disclosures that Intel faces a $25.4 million antitrust fine in South Korea. Here’s the early story from the Journal’s Don Clark and a report from the NYT.

In a statement, the world’s largest semiconductor company said it received a subpoena from the agency on Wednesday. Intel, however, said its “business practices are well within U.S. law.”

Intel said it has been “working closely” with the FTC since 2006 on an informal inquiry into competition in the microprocessor market and provided “thousands of documents.” The subpoena will allow the FTC to obtain information from other parties, the company added.

“The evidence that this industry is fiercely competitive and working is compelling,” the statement reads. The company cited a 42% decline in microprocessor prices between 2000 and the end of 2007.

In other antitrust news, the Journal’s Andrew LaVallee reports that Verizon’s proposed takeover of Alltel is expected to go more smoothly than AT&T’s BellSouth acquisition two years ago, though it’s still stirring up worries among lawmakers and public-interest groups.

Rep. Edward Markey (D-MA; Boston College Law), who chairs the House’s telecom subcommittee, put out a statement calling for “the utmost scrutiny by antitrust officials and telecommunications policymakers.”

And Public Knowledge, a Washington, D.C. group focused on technology policy, lamented the deal in a statement attributed to co-founder Gigi Sohn (Penn Law): “With Sprint in a weakened condition, this deal will speed the unfortunate trend of giving consumers fewer, rather than more, choices in telecommunications services, while giving a few companies more control over the lives of consumers.”

But Fenwick & West antitrust lawyer Mark Ostrau (Stanford Law) said the government is usually satisfied as long as some competition remains. “Only in those markets where the two players are generally No. 1 and No. 2, and there’s a big gap before you get to No. 3, do they get concerned,” he said. Referring to the Alltell/Verizon deal, he says: “yes, there’s one fewer, but there’s still several.”

He’s also skeptical of talk of “control” when it comes to carriers. “Last time I checked, I had a choice of switching any time I wanted,” he added. “The only lock-in is the lock-in that consumers willingly choose when they get a discounted phone, but it isn’t like other industries where once you make your purchase decision, you’re no longer in the market.”

Full post as published by Law Blog - WSJ.com on June 06, 2008 (boomark / email).