Monopoly power less dangerous today than in the past

The hills are brought to life by the sounds of lawyers, often on the phone, discussing monopoly and antitrust issues. The executive order just issued by President Biden to encourage business competition will reinforce this powerful trend.

This development is clearly important. The antitrust activity of the twentieth century involved the telephone, but the use then was mainly for conversation on landlines.

In May 2021, a trial began in San Francisco involving Apple and Epic Games. When the hugely popular game maker Fortnite refused to require the use of Apple’s App Store, and therefore pay an additional 30%, the store removed the game. Apple is the target of a certain number of other lawsuits, some alleging patent infringement.

Also in May, Karl Racine, aggressive Washington DC attorney general, sued Amazon. The juggernaut reportedly pressured third-party sellers to set prices.

This month, attorneys general for 36 states and the District of Columbia sued Google. The global giant is said to be too aggressive in limiting consumers to the inclusive operating system for Android phones, including apps and services.

In October 2020, the Department of Justice and eleven state attorneys general sued Google for alleged anti-competitive practices. These include paying Apple billions of dollars a year to be the default product search engine.

Last December, the Federal Trade Commission and 46 states sued Facebook for anti-competitive practices, including buying WhatsApp and Instagram, in an attempt to stifle competition. In this case, a federal judge dismissed the lawsuit due to insufficient evidence and excessive government delay in filing the complaint.

At the start of the twentieth century, the radio and the telephone greatly expanded and democratized communication and information. After the Second World War, television and then personal computers strongly reinforced this transformation. Two continuing characteristics are the complex interplay between technology and society, and active government oversight.

Today’s information transmission industries involve vast, rapid change. In contrast, in earlier periods, established telephone and IT companies benefited from more structured and stable business environments.

Since the 1950s, antitrust lawsuits in the United States have increasingly focused on technology. Previously, the mining and manufacturing industries were more likely to be targets.

John D. Rockefeller brilliantly built the Standard Oil Corporation into the foundation of America’s industrial economy, but near-total control over oil and kerosene production was also dangerous. Standard Oil could literally control the US economy and shut down the federal government.

Antitrust action dismantled Standard Oil in 1911. Journalist Ida Tarbell played an important role in publicizing the abuses, an instructive example of public activism.

IT and communications companies can be sued, although none have the power of Standard Oil. In 1969, the US Department of Justice attacked IBM but dropped the lawsuit in 1982. The entrepreneurs led by Apple weakened IBM’s grip considerably. The market has foiled the regulators.

Federal authorities were more successful in prosecuting AT&T with an antitrust lawsuit that began in 1974. In 1984, the company was dissolved, only to reappear when the market changed again.

In 1894, Ida Tarbell returned to the United States after several years in Paris. Rather than join her family in Titusville, Pennsylvania, she moved to New York, a daring move then for a single woman.

Electric trains and lights made it relatively safe and comfortable to travel. Once again, the evolution of technology was helping the average person.

Consumers have benefited from greater freedom of movement, as well as information. Investigator Tarbell made excellent use of the newly available phones.

Read more: Ida M. Tarbell, “The History of the Standard Oil Company”

Email Arthur I. Cyr, Clausen Distinguished Professor at Carthage College, at [email protected]

About Norma Wade

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