antitrust — 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.” Read the rest of this entry »

The provocatively titled column “Munchausen Mommies of Antitrust,” by the Wall Street Journal’s Holman Jenkins, is a must-read. In fact, just about everything by Jenkins, who brings a rare combination of facts and insight to every week’s Business World column, is a must-read.

Read the rest of this entry »

Will Google follow in Microsoft’s footsteps and become the target of antitrust prosecution? In a recent article on the influential and popular blog TechCrunch, Wharton professor Eric Clemons argues that it could-and should.

Clemons’s argument, despite its considerable length and its use of multiple case studies and technical diagrams, can be summed up rather straightforwardly: Google is abusing the “market power” gained from its dominant search engine–by “overcharging” advertisers who want access to its search engine’s users. Clemons flatly asserts that “Google enjoys monopoly power over corporations that participate in its keyword auctions.” And: “Google is abusing its monopoly position by overcharging corporations for access to consumers.”

All of this talk of Google’s power makes Google sound like a menace to competition and customers. But let’s take a closer look at this power, to see where it comes from, and whether it’s good or bad Read the rest of this entry »

Last Thursday night, I delivered my talk “The Monopoly Myth: The Case of Standard Oil,” at USC. The theme of the talk was that John D. Rockefeller, the textbook example of the destructiveness of Big Business and market dominance, was in fact an incredible wealth creator who dominated simply because his company created better, cheaper, oil products than anyone else. I argued that Rockefeller’s 90% market share was just as earned as Michael Phelps’s eight gold medals.

The audience asked a lot of good questions after the talk, from whether “predatory pricing” is a problem, to how to properly define “monopoly,” to what a truly free market in health care would look like.

For anyone who’s in Southern California and interested, I’ll be delivering the same talk at the Hilton in Costa Mesa, CA on February 19, followed by a Q&A where I’ll be joined by Yaron Brook. For those of you outside Southern California, the talk should be available online at www.aynrandcenter.org soon after.

And for those of you who are particularly interested in economic and antitrust issues, you can find a detailed historical and economic analysis of the Standard Oil case in my essay “Vindicating Capitalism: The Real History of the Standard Oil Company” in the Summer 2008 issue of The Objective Standard.