Horror movies terrify us with nightmarish plots in which aliens take over humans' brains and thus enslave their bodies. Today, Intel Corporation is a victim of just such a nightmare with the Federal Trade Commission cast as the real-life "brain thief."
The FTC claims that because Intel is the "dominant" manufacturer of personal computer CPU's (the computer's "brain"), the company must be forced to give actual and would-be competitors a "fair" share of its patented technology and know-how. Intel is being compelled to give away what it has created its brainchild because the other companies are needy. The FTC's position is tantamount to this: the more that competitors need Intel's technology, the less Intel owns it.
What is the FTC's legal weapon in this case? It is an obscure antitrust concept, the "essential facilities" doctrine, which holds that if so-called monopolists produce something supposedly unique or "essential," it will effectively be declared public property, to which all comers must be given access. As unjust as this doctrine is (and our courts have rarely invoked it), it is particularly inappropriate as applied to patents intellectual property established by our Constitution which by their nature are meant to confer a "monopoly," in order to recognize an owner's exclusive right to his invention and thereby do him justice.
Yet even the FTC doesn't claim that Intel's market "dominance" was attained by force or fraud; it simply argues that Intel is too successful at inventing technology that is in great demand by customers. When not referring to coercive, government-sheltered franchises, the term "monopoly" boils down to: success in a free market. For this "sin" of success, says the FTC, Intel must be made to sacrifice. It must be forced to share its creations with any have-not, on the FTC's terms. Indeed, the FTC even declares that if sued by its competitors, Intel cannot treat them less favorably than before which means that the government is seeking to establish in law the tenet of turning the other cheek.
There are few starker examples than this lawsuit of our legal system's adoption of Marx's slogan "From each according to his ability, to each according to his need." Yet Americans would certainly oppose Thomas Edison's being hobbled for "over-invention." We would never support cutting Edison's patent rights on his lightbulb because it is so "essential" at the urging of gaslight-makers. Surely, it isn't part of the "American Dream" that too much success is a sin, or that a government agency is morally entitled to prosecute those it deems guilty of that sin. Such egalitarian leveling poisons the "pursuit of happiness" which lies at the heart of that dream. Worse, because antitrust prevents our most successful producers from acting to maintain (let alone enhance) their "monopolies," we are forcing them to destroy their own achievements.
The evils of antitrust law are magnified enormously by its deliberate ambiguity. Most people do not realize the virtually unlimited powers government grabs as a result of the law's failure to precisely define unlawful conduct. As Alan Greenspan wrote, antitrust "is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge's verdict--after the fact."
Crucial terms like "unfair competition" and "monopolist" are kept vague on purpose, to accommodate the government's demand that antitrust law be "elastic." This subjectivity empowers the state to find almost any thriving business guilty of an antitrust infraction and makes antitrust laws incompatible with the principles of a free society. (Such laws flagrantly violate our Constitution, under which ex post facto, or retroactive, punishments are barred and undefined laws are ruled "void for vagueness.") The FTC's attempted brain theft imperils not just Intel, but anyone with proprietary knowledge or intellectual property. It threatens anyone who has ambition enough to enjoy "too much" success. We must awake from this legal nightmare. In the name of whatever ambition you hold dear, urge lawmakers to revoke the FTC's antitrust powers and to reject its cynical strategy to "have the producers and eat them too." Else the next brain the bureaucrats steal if you're productive and successful could be yours.
Robert S. Getman, a business lawyer in private practice in New York City, is a senior writer for the Ayn Rand Institute. The Institute promotes the philosophy of Ayn Rand, author of Atlas Shrugged and The Fountainhead.