Intel’s “ridiculous antitrust defense” — VOICES for REASON

Commentators are aghast at the defense mounted by Intel, the leading manufacturer of computer chips, against the $1.45 billion fine levied by the European Union earlier this year for antitrust violations. The New York Times scoffed at Intel’s “bid … to raise sympathy among American antitrust regulators for a poor, abused American near-monopoly,” and one industry commentator sneered at “Intel’s ridiculous antitrust defense,” calling it a “novel—and frankly outrageous—stratagem.”

What is this legal strategy of Intel’s that is attracting such scorn? It is the assertion that Intel, a corporation, has a right to the same due process of law that individuals have. Intel’s argument, as summarized by the Times, is that corporations “are entitled to the due process rights that European human rights law grants in criminal cases to ensure that the accused—usually powerless individuals—are not steamrollered by the overwhelming power of the state.” Those due process rights were violated, Intel alleges, by the European Commission, which “unfairly plays the role of prosecutor, judge, and jury.”

Although this is a complicated case, I’m only going to focus on one aspect of it. I’m not going to discuss the inherent injustice of antitrust laws—Ayn Rand addressed that issue at length in her speech, “America’s Persecuted Minority: Big Business,” and elsewhere. Nor will I discuss the details of EU due process law. What I want to focus on is the conventional wisdom that a corporation doesn’t have the same legal rights as an individual. It’s an issue that arises in a variety of contexts (for example, in the pending case of Citizens United v. Federal Election Commission, the Supreme Court has been asked to decide whether corporations have a lesser constitutional right than individuals to speak out during election campaigns).

In the Intel case, consider the Times’s statement that due process laws are designed to protect “powerless” individuals from being “steamrollered by the overwhelming power of the state.” What’s the implication? That businesses are not powerless and are not therefore subject to being steamrollered by the state. Thus, the Times casually refers to Intel’s “annual sales of $38 billion” and its “squadron of lawyers,” as if any rich corporation is by definition shielded from the governmental oppression that can befall a lone individual.

But this ignores the crucial difference between economic power and political power. Intel’s economic power is the power to produce desirable products for voluntary trade to mutual benefit. The EU’s political power is the power of physical force: guns, jails, and fines. Intel cannot force anyone to buy its computer chips—customers are always free to accept or reject the terms on which Intel offers its products on the market. But the EU can force Intel to hand over its profits.

In other words, Intel is powerless in the only relevant sense of that word—it is not a force-wielding entity with guns, armies, and physical power to resist the overwhelming force of the EU. Intel is therefore subject to being steamrollered by the state, as much as any individual.

Corporations are nothing but voluntary contractual arrangements among individual shareholders, each of whom has fundamental rights to life, liberty, and property. When a corporation does business, it is merely exercising the individual rights delegated by its shareholders. Why, then, should a corporation’s claim to legal protection be accorded a lesser status than those individuals’ claims? There is no justification for it.

Intel’s defense strategy involves a relatively narrow issue of due process under European law. But a larger question looms: Should corporations be, in effect, laughed out of court for daring to claim the same legal protections as individuals? Every person who values property rights and corporate productivity should be alarmed at the smug assurance with which commentators are answering that question in the affirmative.

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