Intel, Anti-Trust, and Sportsmanship

Business is a rough game. Competitors are in it to win, and a certain amount of pushing and shoving is to be expected. But sometimes the ref just has to blow the whistle.

From CNN: European Commission fines computer chipmaker Intel $1.45B

(CNN) — The European Commission found leading computer chipmaker Intel guilty Wednesday of violating European anti-trust rules and ordered that it pay a fine of 1.06 billion euros ($1.45 billion).

The commission found Intel abused its dominant market position in the market for computer chips known as the x86 computer processing unit (CPU), Kroes said. The abuse lasted more than five years, she said.

“That Intel had such a large market share is not a problem in itself,” Kroes said. “What is a problem is that Intel abused its dominant position. Specifically, Intel used illegal anti-competitive practices to exclude essentially its only competitor, and that reduced consumer choice — and the whole story is about consumers.”

But just what’s wrong with that, ethically speaking? In this regard, the analogy with sports is instructive. (In fact, on CNN this morning I heard one reporter refer to the charge against Intel as one of “unsportsmanlike conduct.”) For a more scholarly take on that analogy, see philosopher Joseph Heath’s An Adversarial Ethic for Business or When Sun-Tzu met the Stakeholder. Heath’s argument is that in business, as in sports, we allow some aggressive behaviour that wouldn’t be allowed in polite company. And we do so because the net effect is socially positive: we get joy out of watching tough, competitive hockey, and we get lower prices out of the scrapping between Honda and Mazda. The limit of that aggressive behaviour, however, is reached roughly when it begins to undermine, rather than to promote, those positive externalities. And that is what Intel did wrong.

1 comment so far

  1. […] into the protectionism implied by the “Buy American” slogan? As I’ve pointed out before, one of the most general obligations businesses have is not to reduce the efficiency of markets, […]

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