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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: RDM who wrote (48755)	2/5/1999 4:46:00 PM
From: d e conway	Read Replies (1) \| Respond to of 1572135

Thanks for the anti-trust link. The following would seem to be somewhat appropriate precedent... ------------------------------------------------ Northeastern Telephone v. AT&T (1981) Predatory Pricing and price discrimination Northeastern Telephone, a small supplier of telephone terminal equipment, accused AT&T, a giant twenty times its size in the terminal equipment market alone, of predatory pricing. The court defined predatory pricing as sacrificing current revenue in order to drive a competitor from the market to gain increase market power in the future. They also defined a benchmark for predatory pricing as being any price below marginal cost. Since marginal cost is difficult to observe in the real world, average variable cost is accepted as a proxy for marginal cost by the court. The court stated that since Northeastern had presented no evidence of pricing by AT&T below marginal cost/average variable cost, AT&T could not be found guilty of predatory pricing. Northeastern countered that AT&T's sheer size would allowing it to absorb losses in one sector while making it up with profits in another area. The court responded that while AT&T's sheer size would allow it to engage in predatory pricing without fear of bankruptcy, AT&T would still be subject to potentially unrecoverable losses from these actions. So, while size is a necessary condition of predatory pricing to occur, it is not sufficient to prove a claim of predation. ---------------------------------------------- Just where is Intel's variable cost on Celerys? Hey you attorneys out there...Cyrix & AMD have a case??? Dan