Cyr column: Monopoly power is less dangerous today than in the past
Columns share an author’s personal perspective.
Big government is going after big business again. That is not inherently momentous news, but the context and character of this prosecution is extremely important and overall reassuring for the public at large.
Giant Google, which controls the dominant global internet search engine, has just been declared Public Enemy No. 1 by the federal government, at least in the non-criminal realm of civil law. On Oct. 20, the United States Department of Justice filed a civil antitrust lawsuit in the U.S. District Court in the District of Columbia.
The Feds charge Google violates the law by using monopoly practices in the online search and associated advertising markets. State attorneys general from Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas have joined the federal suit.
Since World War II, U.S. antitrust suits increasingly have focused on corporations in the advanced technology, communications and information industries. Earlier, primary extraction, processing and manufacturing industries were more likely to be targets.
Apple and Google currently largely define the global smartphone operating system market. The former pioneered the user-friendly desktop computer. Co-founder Steve Jobs, forced out in a power struggle, returned to engineer a brilliant turnaround centered on the iPod, iPhone and iPad. Such devices have become smaller even as the universe of readily available information has rapidly expanded.
As in the past, telephones, computers and good old TVs are helping to democratize the availability of information. Two continuous characteristics are complex interplay between technology and society and active government oversight.
Information transmission is now characterized by vast rapid change, but at the start telephone and computer companies enjoyed much more structured commercial environments. Dominant corporations effectively controlled largely stable markets, slow to change, in contrast to today.
Historically concentrated corporate power clearly threatened the public interest. John D. Rockefeller brilliantly built the Standard Oil Corporation into a powerful foundation of the American industrial economy, but monopoly of oil and kerosene production was also dangerous. Standard Oil could literally dominate the U.S. economy and shut down the government, including the military. The same dominance is not available in communications.
Antitrust prosecution broke up Standard Oil in 1911. Investigative journalist Ida M. Tarbell was instrumental in this result, thanks to her book “The History of the Standard Oil Company.”
Computer and communications companies also faced prosecution, though none had the power of Standard Oil. In 1969, the U.S. Justice Department went after IBM but dropped the suit in 1982. Entrepreneurs led by Apple were significantly weakening IBM’s hold. The market outmaneuvered the regulators.
The Feds had more success in pursuing AT&T with an antitrust suit begun in 1974. In 1984, the corporation was broken up. Southwestern Bell eventually purchased surviving long-distance carrier AT&T, re-adopted the name, and became a principal player over time.
In 1894, Ida Tarbell moved back to the U.S. after several years in Paris. Rather than rejoin family in Titusville, Pennsylvania, she settled in New York City, a courageously daring move then for a single woman.
However, as Steve Weinberg points out in “Taking on the Trust,” his book about her career, electricity was already radically transforming life in the great metropolis. Electric trains and lights permitted relatively safe, comfortable travel. Over time, technology was making life easier for the average person.
Consumers benefited from growing freedom of movement, as from information today. Investigator Tarbell made excellent use of newly available telephones.
Arthur I. Cyr is Clausen Distinguished Professor at Carthage College and author of “After the Cold War” (NYU Press and Macmillan). Contact firstname.lastname@example.org.