Intel Dodges Class Action Lawsuit In Rare Favorable Ruling
Special Master Vincent Poppiti found insufficient evidence to suggest that class action status should be granted, noting that the independent claims fell far short of demonstrating the economic harm they claim occurred. Poppiti's analysis of said shortcomings is scathing in some paragraphs; he writes: "Plaintiffs cannot meet their burden with an expert's general statements about economic theory, and simply throw up their hands when record real-world facts fail to conform to economic theory."
That's Teddy Roosevelt, trust-buster extraordinaire, riding a moose. Your arguments are irrelevant.
More broadly, this Report and Recommendation demonstrates the truth of what Intel has said over the past five years, since these cases were first filed: Intel operates in a highly competitive industry; Intel's research and development have benefited consumers worldwide through lower prices and better products; and Intel has done nothing to harm consumers. Consumers, as well as computer manufacturers, have benefited from Intel's price discounts. When Intel's competitors offer lower prices, Intel responds with its own discounts that lower Intel's prices, just as any competitive company would.After reading over the 112 page decision we don't think Poppiti intended to exculpate Intel to the breadth and depth that the company implies. That said, Poppiti's decision becomes the <i>de facto</i> opinion of the court 21 days after its filing unless the plaintiffs object. We almost wish it wasn't so. Had the AMD/Intel case gone to trial, Sunnyvale would have had to demonstrate that Intel's actions and price rebates constituted an abuse of monopoly power that harmed consumers. AMD's original complaint, broken down to simplest terms, looked something like this:
1) Competition is good and benefits consumers
2) Intel has abusively restricted our ability to invest in future products and sell current ones.
3) This sustained abuse is unfairly destroying our ability to compete with Intel.
4) Less competition hurts consumers and leads to higher prices.
Part of what made the case interesting is the capital-intensive nature of the semiconductor industry in which money must be continually set aside for multi-billion dollar foundry upgrades or new facilities. Unlike the more narrow claims of the plaintiffs involved in Poppiti's decision, AMD alleged a pattern of abuse that went on for years and had a much broader impact on the entire computer industry. Intel sales practices in 2004-2006 could therefore be said to have impacted AMD's ability to manufacture and sell competitive products in 2008-2010. Regardless of which company you favor, the legal questions could've been fascinating.
As it stands, Intel's legal cases are mostly winding down. With the exception of the as-yet-unsettled FTC case, Intel's antitrust docket is looking pretty clean these days.