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Europe asserts its right to regulate

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Regulate,
Europe,
US,
Intel

Evan Hansen and Declan McCullagh CNET News

Published: 11 Jun 2004 10:40 BST

The European Union's revival this week of a moribund antitrust investigation of chipmaker Intel reaffirms the region's growing reputation as an aggressive regulator willing to cross swords with the United States.

The EU could yet exonerate Intel in the investigation, which was launched two years ago at the behest of Intel rival Advanced Micro Devices. Still, legal experts say the renewed action in the case underscores Europe's growing prominence in competition regulation, where it has increasingly found itself at odds with the United States on a handful of important emerging policy issues.

"Europe has become a player in the debate on what the appropriate competition policies should be," says M.J. Moltenbrey, an attorney in the Washington, D.C., office of United Kingdom-based law firm Freshfields Bruckhaus Deringer. "People used to look to the US as the cutting edge in antitrust law, keeping up with the latest economic theories. Now the EU is at least an equal pulpit."

Europe's changing role in competition regulation was first recognised about three years ago, when the EU's Competition Bureau disapproved General Electric's proposed merger with Honeywell -- a move that came after US regulators had already signed off on the deal. Earlier this year, the bureau slapped Microsoft with a record $600m (£329m) fine -- a decision US officials say clashed with its own consent decree with the software giant, reached last year.

The severity of that penalty reflects a precept of European antitrust law that focuses more heavily on monopolists' effects on competing businesses rather than on consumers. As a result, European authorities in the Microsoft case placed more emphasis than US regulators did on the way the company's behaviour affected rivals such as Sun Microsystems and RealNetworks.

That same philosophy has also led EU regulators in general to place more emphasis than US investigators might on complaints brought forward by, in the Intel case, competitors such as AMD.

The Intel investigation, which essentially focuses on whether the chipmaker has used its dominant position to influence the market for PC processors, was opened in 2001. The probe had been quiet lately but was never concluded. AMD has kept in touch with the commission and has continued to pass along information.