Now that European, South Korean and Japanese authorities have moved against chip giant Intel Corp for breaking antitrust laws, the question is: Are U.S. officials feeling pressure to take action, too?
The European Commission fined Intel 1.06 billion euros ($1.45 billion) on Wednesday for abusing its market dominance.
The size of the fine shows that there's been substantial harm to consumers, said David Balto, a former antitrust policy director for the U.S. Federal Trade Commission. That's going to compel the FTC to act.
Intel is under investigation by both the FTC, which made its probe formal in June 2008, and the New York attorney general's office.
The EU said Intel had paid computer makers to postpone or cancel plans to launch products that used Advanced Micro Devices chips; provided illegal rebates so computer manufacturers would use mostly or entirely Intel chips; and paid a major retailer to stock only computers with its chips.
The moves against Intel in Japan, South Korea and Europe, combined with President Barack Obama's more aggressive antitrust stance, means that Intel should expect much more scrutiny, said Ed Black, head of the Computer and Communications Industry Association.
The FTC has largely reserved its power to levy fines to consumer protection cases, but has ordered companies to end anti-competitive practices.
The U.S. can impose fines. It's not that they can't do it. They have tended not to use fines as a principal tool, call it habit, call it tradition, Black said. I wouldn't rule it out. I just wouldn't say it's necessarily to be predicted or expected.
Speaking before the ruling was released but after elements of it were reported, John Briggs, an antitrust expert with law firm Axinn, Veltrop and Harkrider, LLP, said he expected more legal trouble for Intel.
This kind of a ruling is going to motivate a lot of bees to go after a lot of pollen and honey, Briggs said. There are a lot of people who will be wanting a piece of Intel.
The commission might pursue Intel under Section 5 of the FTC Act, which forbids unfair methods of competition, rather than under antitrust law proper, said Michael Salinger, former director of the agency's Bureau of Economics.
A number of current commissioners are interested in expanding the scope of Section 5, Salinger said. What's likely to occur with the FTC, is that they will use the Intel case to explore the reach of the FTC Act.
Intel reached a settlement in 1999 in a previous FTC investigation, in which the agency accused Intel of refusing to deal with three customers in order to coerce them into surrendering certain intellectual property rights.
The FTC declined to comment for this story.
BIG CHANGES FOR A TOUGH COMPETITOR?
Smaller rival AMD has long accused Intel of abusing its dominance of the $280 billion chip market and filed its own lawsuit in 2005. A series of other private suits against Intel were consolidated and will be heard with AMD's suit when trial opens in March 2010.
Europe's decision will have no legal effect on these cases, said Michael Hausfeld of law firm Hausfeld LLP.
It clearly is a psychological boost, added Hausfeld. It's tremendous.
Japan's trade commission concluded in 2005 that Intel violated the country's anti-monopoly act. And in June 2008, South Korea fined Intel some $26 million, finding it offered rebates to PC makers in return for not buying AMD microprocessors.
Intel, whose microprocessors power more than 80 percent of the world's PCs, denied any wrongdoing on Wednesday and said it planned to appeal at Europe's Court of First Instance.
But antitrust expert Briggs said there were big changes ahead for Intel.
It's going to be a rough day for Intel and its shareholders, he said. They're going to have to pay a fine and will have to change their conduct in Europe.
(Reporting by Diane Bartz; Editing by Andre Grenon, Lisa Von Ahn, Tim Dobbyn)