What the EU Doesn’t Get: Harming Competitors is Called Competition (and shouldn’t be illegal)

by on May 13, 2009 · 11 comments

The European Commission is a loose cannon when it comes to antitrust and competition law. It’s record $1.45 billion fine is emblematic of what the Commission just doesn’t get:  there’s a difference, a difference that matters, between consumer and competitor harm.

EU Commissioner for Competition Neelie Kroes said otherwise:  Intel had “used illegal anticompetitive practices to exclude its only competitor and reduce consumers’ choice — and the whole story is about consumers.”

No, the whole story is not about consumers, Ms. Kroes. It’s clear that the only harm that Intel has carried out is on it’s main rival AMD–and that’s called competition. Over at the ACT blog, my colleague Mark Blafkin has a good post that details the lack of consumer harm.

Here’s the main point–competition shouldn’t be illegal. But according to EU law, companies with a dominant position in the market have  a legal duty to not eliminate competition, while in the U.S. only monopoly power imparts this duty. U.S. culture, reflected (partially) in antitrust law, holds that the competitive process of driving other companies out of business makes an economy efficient and innovative.

Previous post:

Next post: