LEX The cause of plodding European bureaucrats has been joined by the fiery New York attorney-general Andrew Cuomo. On Wednesday he filed an antitrust lawsuit, which Intel will defend, alleging a systematic campaign of illegal conduct designed to protect the chipmaker’s dominance of the PC microprocessor market. Following a €1.1bn ($1.6bn) fine in May from the European Commission (which Intel is appealing against), and previous rulings in Japan and Korea, the company faces fresh scrutiny of its market power.
Share prices for Intel and competitor Advanced Micro Devices barely reacted. The problem for AMD, which is set to face Intel in a Delaware courtroom in March, is that legal victories offer only consolation, and perhaps the chance of a pay-out to help pay down debt. The period when the company had a clear technological advantage and opportunity to make a dent in Intel’s market share of about 70 per cent has passed.
Intel, which has $11bn of net cash sitting on its balance sheet, and outspends AMD on research by a factor of more than four, may be embarrassed by Mr Cuomo’s claims. But even if, as alleged, it is shown to have forced customers to guarantee market share levels in return for cash rebates, the structure of the industry will probably remain unchanged.
Greater regulatory assertiveness, however, may prompt a subtle shift in the tech world. The expectation has traditionally been that size brings a persistent advantage that gradually moves each area of the industry toward one or two big companies. But Brussels may block Oracle’s takeover of Sun Microsystems; meanwhile Google’s deal with book authors has prompted scrutiny of the search company. As with the rest of the business world, tech must come to terms with ever more official meddling.
