Mannerisms

The EU drew heavily on America's 1890 Sherman Act, which encapsulated US competition law, when it drew up Article 81 of  The Treaty to Establish the European Community which was signed in 1957.

"The influence of US anti-trust law was profound during the early years of the development of competition policy in Europe", according to Mario Monti, a former Competition Commissioner at the EC, "today, after 50 years of application and development of anti-trust rules in Europe, we share the same goals, and pursue the same results, on both sides of the Atlantic."

Back in 1890, the Americans were, seemingly, very keen to stamp out anti-competitive practices. The Sherman Act was passed unanimously in the US House of Representatives, and there was only one vote against it in the US Senate.

"In the 1950s the Americans taught us anti-trust, now we're teaching them back", Kurt Biedenkopf, former Prime Minister of the German State of Saxony and a distinguished practitioner of competition law, told me, "if you form a quasi-monopoly or a duopoly in the US, it will influence the European market, and we will not agree to a combination that will produce a dominant position."

In fact it's not the dominant position per se which is illegal under EU/US competition law, but the use of underhanded means to either create a monopoly or to sustain a monopoly.

Therefore a monopoly achieved by sheer prowess is not illegal. But if other means than merit are used to create or sustain a monopoly then it can be judged illegal.

As one of the authors of the Sherman Act, Senator George Hoar of Masachussetts, said a company which "got the whole business because nobody could do it as well as he could" would not be in violation of the act.

But in pursuit of, or to try to maintain, a monopoly position means that a company has to be careful in its competitive practices.

Therefore, acts which would normally be legal, like paying customers if they don't take competitors' products, become illegal if you indulge in them when you have a dominant market position.

Therefore, if you have a dominant market position, your behaviour is judged by a higher standard than if you don't.

So it's only if you do something like paying customers not to use competitors' products while you're holding a dominant position in a market, that you get your collar felt by the competition authorities on either side of the Atlantic.

TOMORROW: TEN WORST QUESTIONS FOR THE CHIP INDUSTRY IN 2008