Monopoly power is less dangerous today than in the past

Big government is going after big business — again. This time, tech giant Google has faced two federal prosecutions, almost simultaneously.

In October, a trial began on charges Google is a monopoly. In September, a federal judge ruled the company uses illegal tactics.

Google’s dominance in online search activity is widely feared by competitors and organizations dependent on the giant for visibility and cooperation.

In October 2020, the United States Department of Justice filed a civil antitrust lawsuit in the U.S. District Court in the District of Columbia. The Feds charged 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 joined with Feds. This case was ruled on last month.

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. Cofounder 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 help to democratize 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 that were 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, 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. However, as Steve Weinberg points out in “Taking on the Trust,” his book about her career, she returned to a country in which electricity was already radically transforming life. 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.

Technology, properly regulated, benefits us.

• Arthur I. Cyr, acyr@carthage.edu, of Northbrook, teaches political economy at Carthage College in Kenosha, Wisconsin. He is a former vice president of the Chicago Council on Foreign Relations and author of “After the Cold War.”