EU Charges Against Intel Could Make Wider Splash

(MoneyWatch)  Expanding an existing problem, EU officials are ready to file new antitrust charges against Intel. But while the battleground would be in Europe, there's a chance that the repercussions could travel more widely. Both the Federal Trade Commission and the State of New York have announced inquiries into the company, and there isn't a wall of silence stretching down the Atlantic.

"The agencies in the US do speak to the people in Europe," says Ted Henneberry, chair of the European competition practice at international law firm Heller Ehrman. "They collaborate. They share information about what they're doing and why they're doing it."

What difference that might make legally is up to question, because the EU and the US have fundamentally different philosophies when it comes to antitrust. For example, in this country, there is a strong inclination to keep hands off pricing policies of corporations and to welcome anything that could bring lower costs to consumers. However, in Europe, "companies that are dominant have a 'special responsibility,' in [the EU's] words, to make sure the market doesn't get distorted," Henneberry notes.

If that forces Intel to effectively keep hands off AMD or other competitors to keep European regulators off their back, it might change some basics in the competitive landscape. Intel might decide to cede some portions of markets to keep AMD a viable competitor, and that could have an effect on the operations of both companies elsewhere in the world.

Any action might also cause other companies to reassess how they do business, particularly when it comes to using pricing strategies as a strategic weapon. "This case against Intel may encourage dominant firms to keep their prices high," says Boston University school of law professor Keith Hylton, author of the textbook Antitrust Law: Economic Theory and Common Law Evolution.

Waves at La Jolla image courtesy Jon Sullivan, public domain