It’s very odd to see the Wall Street Journal today complaining about the EC’s application of anti-trust law to Intel. After all the WSJ is the organ of American business, and America pretty much invented modern anti-trust law with the Sherman Act of 1890.
Unbelievably, the WSJ opines: ‘The same commercial practices would be entirely legal if the company in question were not considered dominant’.
Well wake up you WSJ guys! Dominance is exactly what anti-trust is all about. Anti-trust law doesn’t start to apply until a company’s dominance over a market becomes established.
As defined by the US Cornell University Law School, anti-trust is:
‘Trusts and monopolies are concentrations of wealth in the hands of a few. Such conglomerations of economic resources are thought to be injurious to the public and individuals because such trusts minimize, if not obliterate, normal marketplace competition, and yield undesirable price controls. These, in turn, cause markets to stagnate and sap individual initiative.’
According to today’s WSJ; ‘This leaves companies in the absurd position of being free to compete as hard as possible until they reach a certain market share – at which point their hitherto legal behaviour becomes unlawful’.
Bingo! That’s exactly what anti-trust law is about. It puts legal restrictions on companies when they become dominant in their market. Those legal restrictions wouldn’t be imposed if the companies weren’t dominant in thier market.
What’s so odd, is that a respected mouth-piece of the US establishment like the WSJ, calls ‘absurd’ the well-enshrined principle of US law that market dominance can lead to anti-trust measures being taken.
By and large anti-trust law has worked pretty well in the US. For instance, since 1956, IBM has operated under a ‘consent decree’ imposed after anti-trust litigation was brought against IBM in 1952. The IBM consent decree obliged IBM, among other things, to disclose technical information which would allow others to compete in the computer market.
The IBM anti-trust action was initiated when IBM became bigger than its next biggest five rivals put together, and when IBM’s dominance threatened free and fair competition in the computer market.
So come off it WSJ. You Yanks started all this anti-trust stuff. If the EC is applying some open-market, democratic principles copied from the Land of the Free, then you have only yourselves to blame.
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Comments (1)
Wasn't the WSJ also strangely 'conflicted' over its acquisition by Murdoch?
As was pointed out (in The Independent, I think), proponents of free market capitalism, however red in tooth and claw, don't sound very convincing when they then plead 'special status' themselves, in the face of being devoured by a bigger beast in the jungle.
I'm sure most parties involved in 'hostile' takeovers could produce a long list of (special) reasons why their business should be preserved.
AW
Posted by Alun Williams | August 1, 2007 5:05 PM
Posted on August 1, 2007 17:05