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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: wbmw who wrote (241406)	9/28/2007 6:05:33 PM
From: Petz	Read Replies (1) \| Respond to of 275872

re: In terms of the discounting, in order to prove that this is illegal, AMD would have to prove that it was harmful to consumers, which is a difficult thing to do... We've been over this many times. It is absolutely not necessary to prove this. For one thing, consumers don't buy microprocessors, OEMs do. AMD's US suit is defined with respect to the market for microprocessors (x86-only, IIRC). But there's no requirement to prove that the OEM's were harmed either. As an example of how unimportant harm to "consumers" is, take a look at this white paper by UK's anti-trust authority: oft.gov.uk A.1 This case study outlines the EC Commission decision against Deutsche Post AG (DPAG) for the abuse of a dominant position.202 This case concerns a network operator with a universal service obligation (USO) in its statutory monopoly that was accused of anti-competitive pricing behaviour in commercial markets where it faced competition. A.27 This pricing behaviour was found to be anti-competitive on the grounds that it prevented the development of effective competition in the mail order parcel business. Fact based story of harm to competition and recouping losses A.28 The decision offers no analysis on the question of recoupment. Whilst DPAG's pricing appears to have been so far below cost that it plausibly restricted the growth of competition from UPS and other private carriers, an interesting issue is whether there was (or would have been) harm to consumers from this action. This is all from a white paper by the UK's anti-trust enforcers reviewing various decisions of the EU Anti-Trust Commission. In this particular case, Deutsche Post AG was accused and found guilty of subidizing their commercial businesses from the profits of a monopoly. Whether there was harm to consumers is only considered to be an "interesting issue." If you read a little further, you'll find that Deutsche Post AG also used "loyalty rebates" to restrain competition. But the point I am making is simple: Deutsche Post AG was found guilty and a fine was imposed without reference or calculation of any harm to consumers. The commission actually forgave them for selling below cost prior to 1996 because the cost guidelines, needed to calculate a minimum allowed price, had not been established yet. But they were fined because "the form" of its discount scheme was anti-competitive. "Form" is underlined because apparently the EU Commission did not even prove that the loyalty rebates actually DID hurt competition. Now it is true that the US authorities are more consumer-minded than the EU. In reality, I hope AMD's legal team is busy proving harm to consumers as well as itself. It might come in handy. Petz