Legal News

Antitrust News: Varney to Unveil New Regime; EC to Fine Intel

By Ashby Jones

It’s mostly been true for at least as long as we’ve been alive: Republican administrations favor looser antitrust regimes; Democratic administrations like them tougher.

Any hope by big business that the current administration might break away from this trend will likely be officially dashed this week, according to an NYT story, when Christine Varney, the head of the Justice Department’s antitrust division, announces plans to “restore an aggressive enforcement policy against corporations that use their market dominance to elbow out competitors or keep them from gaining market share.” Click here and here for earlier posts on Varney, a former partner at Hogan & Hartson in D.C.

According to the story, Varney is to announce the policy reversal in two speeches she will give this week. Varney is expected to say that the administration rejects the impulse to go easy on antitrust enforcement during weak economic times.

As a result of the Bush administration's interpretation of antitrust laws, the enforcement pipeline for major monopoly cases - which can take years for prosecutors to develop - is thin. During the Bush administration, the Justice Department did not file a single case against a dominant firm for violating the antimonopoly law.

Many smaller companies complaining of abusive practices by their larger rivals were so frustrated by the Bush administration's antitrust policy that they went to the European Commission and to Asian authorities.

Ms. Varney's new policy more closely aligns American antitrust policy on monopolies and predatory practices with the views of antitrust regulators at the European Commission.

"This will be bad news for heavyweights in the tech industries - companies like Google and Microsoft," said Herbert Hovenkamp, an antitrust expert who teaches at the University of Iowa College of Law.

In other antitrust news, the European Commission on Wednesday will fine the world’s biggest computer-chip maker, Intel, for breaking European antitrust rules, people familiar with the matter said Friday. The commission, the executive arm of the European Union, will also tell Intel to make changes to the way it provides rebates to computer makers, the people said. Click here for the WSJ story.

Intel’s trouble with the commission dates from 2000, when chip-maker Advanced Micro Devices Inc., of Sunnyvale, Calif., filed a complaint saying Intel was blocking its access to the market. In 2007, the EU sent preliminary charges to Intel, alleging Intel kept AMD out of the microprocessor market by paying computer makers rebates to keep their usage of AMD chips down and by selling chips below cost to thwart AMD from swooping on key accounts. Last year, the EU added more charges, alleging Intel paid a major retailer to keep computers that use AMD chips off its shelves.

An Intel spokesman declined to comment, except to say that word of the pending decision amounts to rumors and speculation.

Full post as published by Law Blog - WSJ.com on May 11, 2009 (boomark / email).