New York adopts an industrial policy

I didn’t get why the NY attorney general is suing Intel, other than it’s the same publicity-seeking path his predecessor to get elected governor. Antitrust enforcement is a Federal issue, whether for the US DoJ/FTC/FCC or the Eurocrats in Brussels.

However, blogger Geoffrey Manne suggests that NY has an interest in hurting Intel and helping AMD, given that AMD is talking about building a $3 billion plan in upstate New York. For some reason, I thought the idea of Federalism and the Constitution was to prevent inter-state trade wars, but I guess both have gone out the window along with original intent.

Like most lawyer-politicians, the AG’s understanding of business and economics is dubious at best. FT’s Lex aptly summarized the likely effect:

Share prices for Intel and competitor Advanced Micro Devices barely reacted. The problem for AMD, which is set to face Intel in a Delaware courtroom in March, is that legal victories offer only consolation, and perhaps the chance of a pay-out to help pay down debt. The period when the company had a clear technological advantage and opportunity to make a dent in Intel’s market share of about 70 per cent has passed.
…
[E]ven if, as alleged, Intel is shown to have forced customers to guarantee market share levels in return for cash rebates, the structure of the industry will probably remain unchanged.