Sonia Arrison has an article at TechNewsWorld on the recent FTC investigation and New York state prosecution of Intel for supposed antitrust violations. In a classic Bootleggers and Baptists move, AMD is complaining that Intel has been offering sales incentives to undercut AMD. But it’s difficult to convincingly argue that Intel is destined for monopoly power. For a while, AMD’s Athlon 64 X2 was dominant, but now the Intel Core 2 Duo is just a superior processor to anything AMD has in the category. Now, however, the new competition may be for mobile devices, and Intel isn’t doing too well there. Companies like ARM and NVIDIA may become the next Intel – just illustrating Adam Thierer’s point that in the tech sector, no company can maintain dominance for very long.
Arrison details some of the problems with overzealous antitrust litigation:
Given that competition is so intense in the microprocessor market and in the technology sector in general, it’s not hard to see why competitors would attempt to deploy government bureaucrats as an additional weapon in their competitive arsenal. Filing antitrust complaints against competitors forces them to divert attention and resources away from research and development and into wasteful litigation. Indeed, Intel recently indicated that it is planning to increase the size of its lobbying operations in Washington.
This may be a general cost of antitrust, but Arrison neglects some factors particular to the tech world. In such a fast-changing, competitive market, antitrust may just not make sense. A company may have lots of market share at any particular time slice, but it always has to be looking out for the next tiny startup (like Microsoft or Google once were) to pop out of nowhere and destroy it. Antitrust in this context may slow technological process, not just through the actual cost of litigation but also through stifling creative market arrangements and encouraging regulators.