On Monday, the US Department of Justice’s lead antitrust enforcer announced a new direction for her agency.  In a speech before the Center for American Progress, Christine Varney, assistant attorney general for antitrust, said “as antitrust enforcers we cannot sit on the sidelines any longer.”

According to the San Jose Mercury News, the speech is a troubling sign for technology industry titans, particularly Intel:

"In the past, the antitrust division was a leader in enforcement efforts in technology industries, and I believe we will take this mantle again," she said.

The policy shift could have broad implications for dominant companies as well as their smaller competitors. Google and Intel already face antitrust inquiries, and those could accelerate… Antitrust lawyers said Varney's speech could have almost immediate ramifications for Intel, which is widely expected to be slapped with a record-setting fine Wednesday from the European Commission in excess of $1 billion for anticompetitive practices, including illegal rebates and paying retailers not to sell PCs with chips from competitor AMD.”

The San Jose Mercury News and the antitrust cheerleaders quoted in the story might be getting ahead of themselves, however.  

While it is clear that AAG Varney plans to be vigilant enforcer of America’s antitrust laws, she did not suggest walking away from American antitrust law.  Over and over again, she returned to her “back to basics” mission: “consumer welfare.”  And through this lens, the competitive accusations against leading technology firms often look much less substantive.  

Let’s take a look at Intel, for example.  The European Commission is reportedly going to charge the chip manufacturer with illegally distorting competition on Wednesday, but it is NOT clear that American regulators will have any interest in picking up where the Commission leaves off.  In fact, the concept of "welfare" has never seemed to be at the core of the case.  As the BBC notes:

"…whether or not Intel has broken the rules, the issues are by no means clear-cut. Over the years since the complaint was first made, the price of personal computers and the computer chips that go in them has fallen enormously.  It can be argued that Intel has tried to squeeze its rival out of the market, but this does not necessarily mean consumers have suffered, as prices for computers and micro-chips have continued to fall across Europe."

The reality is that there is no evidence of consumer harm or a lack of competition in this market.  
  • Innovation is Thriving – Both AMD and Intel have been delivering powerful innovations for decades and virtually no one is complaining about a lack of innovation in the sector.  This Gizmodo piece highlights some of AMD's greatest achievements, while noting that Intel has jumped out in front again in recent years.
  • Despite Technological Hurdles, Computing Power Continues to Increase Exponentially In Line with Moore's Law – The microprocessor industry continues to deliver more processing power every year at nearly the same rate, despite predictions to the contrary.
  • Microprocessor Prices Fell By Nearly 50% Per Year From 2000-2006 According to Bureau of Labor Statistics Reports and Intel has said the average price of its chips for personal computers has fallen 60% over the past decade.  
  • When AMD Innovates, It Gains Market Share.  Throughout the years, when AMD has innovated and outpaced Intel the market has rewarded the company.  Just before AMD's launch of its Athlon 64 bit processors in September 2003, the company had 15.6 percent of the market.  By Q4 2006, AMD had 25.3 percent of the market, a 61.6 percent jump in market share.

Whatever the European Commission decides in its investigation of Intel, the evidence does not seem to show any consumer harm in this market.  This suggests that US authorities will still not be interested in pursuing it, and that competitors with a grudge but no facts to support consumer harm will continue forum shopping in the antitrust world.