"Monopoly" is used in antitrust law, specifically Sec. 2
of the Sherman Act. The percentage of market share necessary for a
firm to be declared a monopoly is not fixed, but is very large,
60 to 90 per cent or so. Judge Hand in the famous Alcoa
Case (1945) said that 90 per cent would presumably be monopoly.
But, of course, everything depends on the definition of the "market".
In Intel's case, the market would probably be defined as mpu's but would be limited to those capable of running freestanding
PC's (and would exclude embedded mpu's). If limited to PC's, Intel
would doubtless be found to be a monopoly.
Monopoly is not illegal, but conspiring, attempting to gain, or abusing a monopoly is. Hand argued that merely acting while having
a monopoly necessarily was abusive and illegal, but very few judges believe this now.
Thus Intel as a precaution against either a
federal or private suit, must not be abusive -- such as attempting
to impose exclusive dealing, tie ins, destroy a rival, requirements
contract, etc. Thus it cannot compel a customer to use only Intel
chips, or restrict it to one part of the business, or condition the
supply of PII's on the customer buying NIC's. (For example, COMS is
dealing with CPQ to supply NIC's for CPQ's new BTO business, and
there is nothing Intel can do to leverage its NIC's on the supply
of PII's.
In short, Intel must act like a model business, while its little
rivals can engage in promotions, tie ins, and discounts would be
illegal for Intel. For example, AMD can publish the fact that it
will try to offer the K6 at 25% less than Intel's chips, but if Intel
attempted to maintain a 33% premium price over the K6 it would be
in trouble for "price fixing."
As a matter of policy, Dr. Grove has said that all relevant personnel
are annually trained in antitrust law so that they will not make
mistakes.
The penalties for violating the Sherman Act (or other antitrust laws) are severe. The court in a case brought by the federal government may
dissolve the corporation (as it did Standard Oil in 1911), force it to license patents (as it made AT&T free license the transistor), break the monopolist into pieces (as it did to AT&T in the 1980's), imprison the persons responsible (as it did in the 1950's to GE and Westinghouse), impose huge damages (single damages, cost of suit,
and reasonable attorney's fees). All of these remedies except perhaps
dissolution and break up are available to a prevailing private
plaintiff (including triple damages).
The past three Administrations have not aggressively enforced Sec. 2,
and since the 1980's the federal government has encouraged cooperative
ventures (like Sematech, I300I, and EUV), but a company like Intel
must be extraordinarily alert and well informed and avoid at almost
all costs the appearance of being a monopolist. I am concerned that
the recent purchase of the Exponential patents at auction (which I think was done by Intel) could easily be interpreted as an attempt to
extend and maintain the monopoly. I also think it was absolutely
essential that Intel own those patents to protect Merced, although
it might have been slicker to have them purchased by a firm in which
Intel had a veto but not a controlling interest. |
