Antitrust experts examined the issue of whether antitrust law could be applied to the fast-paced IT industry at the Microprocessor Forum this week.
A debate at the conference in San Jose included Mozelle Thompson, a US Federal Trade Commission (FTC) representative, Richard Gilbert, a professor from Berkeley University in California and a number of lawyers who are involved in current antitrust cases, including the US Department of Justice (DoJ) versus Microsoft and chip giant, Intel.
?Right now we have a one size fits all antitrust policy?, said Berkley?s Gilbert, adding that the same principles had been applied in recent antitrust cases to everything from IT to asphalt ceilings for burial chambers.
Most panelists agreed that it is difficult to apply traditional antitrust principles to the IT industry.
?I would argue that the current approach to antitrust does not work [for the IT industry]?, said George Riley, a partner at lawyers, O?Melveny & Myers.
For one thing, he suggested, the procedures are too slow, which meant that the 1995 consent decree between the DoJ and Microsoft ?came too late? because the damage to the operating system market had already been done.
But the FTC?s Thompson was not convinced. ?Every industry says they?re special?, he observed, adding diplomatically, ?and of course they are?, but he admitted that many antitrust enforcers do not understand the IT industry. ?We approach this area with a high degree of circumspection?, he said.
But he did defend the use of traditional antitrust concepts in the IT marketplace, arguing that the FTC was well aware of the nature of the fast-paced IT industry and the great store it held by innovation and intellectual property.
Ron Johnston, a partner at Los Angeles law firm, Blanc Williams Johnston & Kronstadt, retorted, however: ?This is not just litigation about Microsoft and Intel - this is about you.?
He added that the verdicts of these high-profile antitrust cases would affect future applications of antitrust law and would potentially impact every company on the market.
The courts had traditionally tended not to ?interfere with or even second-guess design decisions? unless there was clear damage to consumers, he continued,. but this may change if the current cases go the other way.
?[Right now] you have the freedom to design your products, but watch these cases to see whether your freedom stays the way it is,? he warned.
Johnston also cautioned those companies that think antitrust principles do not apply to them because they are not industry giants like Microsoft or Intel that antitrust legislation applies to any organistion that holds power over a given market.
However, defining that market can be problematic - for instance, Data General, which is not widely considered to be a tier one hardware vendor, was once judged to hold power over the market for its own minicomputers.
But O?Melveny & Myers? Riley said that the number of private antitrust suits was likely to increase in the near future and he expected those states already involved in the Microsoft case to show increasing interest in antitrust matters.
As a result, he called for the formulation of new, less vague antitrust laws, although neither he not his fellow speakers could formulate any workable suggestions themselves.
But Berkeley?s Gilbert disagreed: ?I don?t think we need new antitrust laws, but the existing ones must be applied in a way that makes economic sense,? he said.
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