[Originally posted on the ACT Blog]
As most readers know by now, the Federal Trade Commission ignored the pleas of ACT and 37 member companies for caution, and filed a lawsuit against Intel yesterday charging that the company has abused its dominant position in the computer chip market. What you may have missed yesterday, however, is the rather ironically timed announcement from the Obama administration that it is launching new policies to spur more manufacturing it the United States. In a statement, Vice President Biden said:
“We need legal, tax and regulatory regimes that promote American manufacturing and do not place an undue burden on those who wish to manufacture products in America.”
Why is the timing ironic?
Intel is one of the last great American manufacturers. While Intel does some manufacturing abroad, the vast majority of its chips are built by its 40,000 American workers. Most of Intel’s fabrication facilities are in the United States, including Arizona, California, Colorado, Massachusetts and Oregon, and the company has announced that it will spend $7 billion to build more facilities here.
The FTC filed its case on behalf of AMD and Nvidia, two companies who have decided to offshore nearly ALL of their manufacturing. AMD’s most advanced manufacturing facility is in Germany, and is “more of a German government fab than an AMD fab” after the German government invested more than $1.5 billion to build it.
When the European Competition Commissioner decided that Intel abused European antitrust law, she crowed that Intel should change its tagline from “Sponsors of Tomorrow” to “Sponsors of the European Taxpayer.” One would hope that the American government would not have similar designs on taking down a company that provides so many high paying American jobs.
What’s the Rush to Sue Intel?
Clearly, the fact that Intel is one of the last great US manufacturers does not exempt it from the rules of fair competition. Like all companies, however, Intel should be guaranteed a full, fair, and transparent investigation by the FTC. However, that simply doesn’t seem to be the case here. As we said yesterday:
Following the settlement between Intel and AMD that resolved the core issues that the FTC has been investigating for more than two years, the FTC has slapped together a completely new set of allegations into this complaint. The result is a complaint reads like a late homework assignment, with little substance and lots of rhetoric . . . The real question is “why is the FTC rushing this case?” They took more than 2 years to investigate their concerns about Intel’s pricing programs without filing a case, but they are now pushing these new claims out the door without giving them more than a couple months of thought?”
A regulatory regime where the federal government rushes to sue one of its biggest manufacturers without bothering to collect evidence, and uses it as a guinea pig for inventive legal theories is probably NOT going to “promote” more US-based manufacturing.