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

To: wbmw who wrote (259509)	4/7/2009 1:09:05 AM
From: fastpathguru	Read Replies (2) \| Respond to of 275872

Re: "Protecting consumers as opposed to competition" - These are not mutually exclusive They are if the consumer is already benefitting from lower prices, and if the outcome of an anti-trust investigation is to legislate against using price to win market share. Elmer's point is that the consumer would lose out on the competitive pricing if that were the case. If Intel was using discriminatory loyalty rebates as AMD asserts, then prices for the consumer could have been even lower had AMD not been prevented from having free access to the market. And please don't use the ignorant retort of "how can rebates create higher prices for the consumer" without understanding the economics of discriminatory loyalty rebates. Please. I beg you. Go here and search for "loyalty rebates". You'll find several very good papers on the topic. Pay special attention to references to "suction effect" and "equally efficient competitor" tests. papers.ssrn.com Re: [the following is wrong:] the only goal of antitrust law is to protect consumers Are we talking the letter of the law or the spirit of the law with this sentence? Why bother inventing legislation if it doesn't protect the consumer? The word "goal" makes the subject of my statement clear. I have said all along that a goal of antitrust legislation is to protect the consumer. Elmer says its the ONLY goal, rejecting the notion that businesses themselves can be victims of monopoly abuse when the process of competition is perverted by an abusive monopoly. Obviously, and contradicting Elmer's tooth&nail defense, antitrust law provides mechanisms for competitors as well as consumers to seek relief from the effects of abusive monopolies. To reject that simple statement is to shove one's head deep into the sand. Re: the only alternative to solely protecting consumers, i.e. enforcing antitrust laws without requiring explicit (as opposed to implicit) consumer harm, is that "incompetence is rewarded" as if a competitor who has been victimized by an abusive monopoly does not deserve justice A competitor who has been driven out of business because they are inefficient does not deserve justice. That's how our capitalistic system of survival-of-the-fittest is supposed to work. An inefficient competitor can be marginalized or driven out of business without resorting to tactics that run afoul of antitrust laws, i.e. cheating. But even inefficient competitors should not have to face a cheater in the market. Cheaters should be punished whether they are facing strong or weak opponent(s). That seems simple enough... Cheating should be prohibited. The complications come from determining what behavior constitutes cheating. Your reference to evolution applies to antitrust law as well... Given the vast economic ecosystem, dominant firms are constantly pushing the solution envelope in their quest for growth, and antitrust law evolves alongside them in order to maintain the level playing field. The spirit of anti-trust is to prevent an inefficient company from delivering a less competitive product at loss-leading prices to drive out a competitor. Simply comparing relative efficiencies is not a litmus test for determining antitrust abuse, it's more complicated than that. For instance, more efficient companies should not be penalized for achieving that status, therefore the "equally efficient competitor" test was created to distinguish truly anticompetitive behavior from simple leveraging of greater efficiency. (Another sure sign of an intellectually unarmed opponent is the trotting out of the old You're Just Penalizing Intel For Being A More Efficient Competitor Than AMD argument. It's wrong because the equally efficient competitor test sidesteps issues arising from unequal efficiencies between competitors.) It's a good law, and it currently exists. But this discussion uses the hypothesis of preventing an efficient company from delivering an effective product at competitive above-cost pricing, and that's not currently illegal, nor should it be - even if it still ends up driving the competitor out of business. See above... I would say that you just described what the Intel folk want the parameters of the discussion to be... You cannot intelligently discuss the case without understanding the mechanics of discriminatory loyalty rebates and the tests that will potentially be used to determine their legality. Now, this has all been high level and objective. If you agree so far, then we can talk about whether this applies to Intel or AMD in particular. But do you agree so far...? Sure, it's a good baseline. As long as you are not going to follow the rabble down the road of ignorance... fpg