Wednesday, June 03, 2009 2:08:49 PM
When trying to understand the law, it is always a good idea to pay serious attention to Supreme Court decisions that are directly on point. Once you do this you can understand that the Brooke Rule totally kills all of AMD's antitrust claims. The Intel brief accurately and concisely describes the legal principle of Brooke.
http://download.intel.com/pressroom/legal/1443_Opening%20Brief%20in%20Support%20re%201442%20Motion_Intel.pdf
Legal Principal I However Articulated, All Claims That Intel Took Business From AMD By Making Price Concessions Must Fail As A Matter Of Law If Intel's Prices Exceeded Its Costs
A. In Brooke Group And Subsequent Decisions, The Supreme Court Has Firmly Entrenched The Bright Line Principle That above-Cost Price Cutting Is Per Se Legal, Regardless Of The Form It Takes, And Regardless Of The Impact It May Have On A Rival
B. The Brooke Group Safe Harbor Applies Whenever The Average Price For All Goods Sold Exceeds Their Average Cost, And Permits No Different Analysis Where A Plaintiff Claims That Some Portion Is "Uncontestable."
Windsock,
No matter what you or Intel say, precedent is not law.
Here is the Bush/DOJ Antitrust Modernization report's discussion of "BUNDLED DISCOUNTS AND SINGLE-PRODUCT LOYALTY DISCOUNTS".
These are the guidelines that were recently declared to be overly strict, overly limiting of antitrust enforcement, and RESCINDED by the Obama administration.
http://www.usdoj.gov/atr/public/reports/236681_chapter6.htm
Even in the overly strict Bush Admin report/guidelines, even one of the most pro-discount scholars in the report cannot deny that loyalty rebates, in an environment of significant market power, can be anticompetitive:
The principle that "[d]iscounting is presumptively procompetitive and should be condemned only in the presence of significant market power and proven anticompetitive effects"(186) guides Professor Hovenkamp's analysis.(187)
That is the voice most aligned with Intel's and then it gets worse (for Intel) from there.
Upon reading the Bush Admin AMC report on single firm conduct, specifically re: loyalty rebates, EVEN UNDER THOSE GUIDELINES an argument can be made that the behavior described in the EC decision could be anticompetitive.
And then, of course, the report was rescinded.
Your Brooke Group safe harbor is not as simple as Intel declares, either...
See McKenzie vs. PeaceHealth,
http://www.techlawjournal.com/courts/2007/mckenzie_peacehealth/20070904.pdf
where the 9th circuit upheld a Brooke Group type standard for determining the predatory effects of a bundling/discount scheme, and then applied a discount attribution and equally efficient competitor standard (i.e. what the EC did for Intel) to determine whether the competed-for component of a purchaser's needs were priced below cost.
fpg
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