On Antitrust, Don’t Take Big Tech’s Word for It
Open Markets legal director Sandeep Vaheesan explains how, paired with rules on unfair competition, breakups of dominant tech corporations can ensure business rivalry that confers benefits on consumers, workers, and suppliers.
Breaking up dominant digital corporations is moving from the realm of theory to probability. In January a federal judge denied Facebook’s motion to dismiss the Federal Trade Commission’s amended complaint seeking to force the company to sell off Instagram and WhatsApp. Congress may restructure these companies through new law, with pro-big business Republicans joining Democrats in the fight to control the power of Amazon, Facebook, and Google. A direct attack on the size of these companies would complement and reinforce new legislation and regulation governing their business practices. The increasing possibility of corporate breakups has triggered warnings from tech companies and their lobbyists of the supposed dangers to the public if very large companies are made smaller through litigation and legislation.
The New Deal-era restructuring of the electric power industry should steel the resolve of regulators and lawmakers fighting to breakup tech giants today. In the 1920s electric utilities offered a new and exciting form of energy and became arguably the most powerful industry in the United States at the time. They got their way in Congress, state legislatures, and with regulators, undertaking a systematic propaganda campaign to maintain their political economic dominance and discredit alternative arrangements, such as public ownership. Yet the federal government tamed them. Overcoming massive opposition from the power industry and its allies, the Roosevelt administration and progressives in Congress split up nation-spanning utility holding companies and brought them and their subsidiaries under effective federal and state regulation. This history offers several lessons for splitting up tech corporations today, both on the political fight ahead and the probable public benefits of the breakups.
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