In the early 20th century, President Theodore Roosevelt warned Congress of quickening economic consolidation and monopolization that threatened the welfare of America’s working people.“There are real and grave evils, one of the chief being over-capitalization because of its many baleful consequences,” Roosevelt said in his 1901 speech. “A resolute and practical effort must be made to correct these evils.”
Within a few months of his speech, Roosevelt had instructed the Department of Justice to dismantle a merger orchestrated by J.P. Morgan and John D. Rockefeller. The two men had recently established the Northern Securities Company, a railroad powerhouse that controlled virtually every mile of track from Chicago to the pacific northwest. Challenging the railroad industry took guts, and top titans fought Roosevelt’s actions all the way to the Supreme Court. In 1904, the court ruled in a 5-4 split decision that Roosevelt had properly acted under the powers enumerated in the Sherman Act, a landmark law that outlawed monopolization. In subsequent administrations, the powerful provisions of the Sherman Act have been used to bust up other dominant companies, from Standard Oil to AT&T.
The Sherman Act remains at the heart of federal antitrust law, yet it is rarely enforced today with the same zeal as Teddy Roosevelt and other political reformers unafraid to challenge the most powerful.
While meaningful change at the federal level will be difficult to achieve, there are other actors that have jumped into the fight.
President Obama stood up to only a handful more mergers than former Republican President George W. Bush. Both leaders' work toward limiting harmful corporate mergers paled in comparison to Bill Clinton’s record. Under President Trump, the federal government today has pursued companies that display noncompetitive practices. Yet enforcement under Trump is selective, even “schizophrenic,” according to the New York Times . While Trump’s Department of Justice has taken legal action against AT&T’s proposed merger with Time Warner, Disney’s acquisition of 20th Century Fox has, so far, gone unchallenged. On the whole, Trump has most often sided with big business, whether it be by reversing net neutrality protections or gutting the Consumer Financial Protection Bureau.
Trump and those before him have objectively failed to curb the market consolidation of the tech and retail behemoths of the age, including Amazon, Google, Walmart, and Apple. There are many many lesser known companies that now wield tight control over a particular market and have also faced little regulation, whether it’s Whirlpool over washing machines or Signarama over banner manufacturing. (Washington’s inaction comes amid a crackdown by European authorities, who are ramping up oversight of major tech companies, including Apple and Google.)
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There is now a body of work suggesting that monopolization not only reduces economic competition, but also contributes substantially to income inequality. Furthermore, economic monopolization also promotes political consolidation. Even the conservative-leaning magazine The Economist has sounded the alarm bells. “Profits are too high” read a 2016 investigation by the magazine. “America needs a giant dose of competition.”
Writing in The Atlantic , Barry Lynn posited that there would be huge electoral benefits for a new generation of political leaders hell-bent on trust-busting.
“They are tuned in to something real. They are tuned in to a problem. The time is right for recalibration.”
“The effects of monopoly enrage voters in their day-to-day lives, as they face the sky-high prices set by drug-company cartels and the abuses of cable providers, health insurers, and airlines,” Lynn wrote. “Ordinary Americans didn’t need experts to explain the danger of monopoly. Populist movements like the Tea Party, Occupy, and the [Bernie] Sanders campaign have all focused to varying degrees on the threats posed by concentration. Polls show that a majority of Americans now believe big corporations are too powerful.”
Last year, Democrats introduced a“Better Deal” political platform that, while largely nebulous, prioritized the revitalization of antitrust actions. Sanders has introduced a number of bills aimed at increasing competition and reducing the power of monopolies, including a bill that would allow for the importation of prescription drugs from other countries. The other major anti-trust leader in the party, Senator Elizabeth Warren, is fiercely fighting to protect her baby, the Consumer Financial Protection Bureau.
There are few Republicans who have taken up the anti-trust mantle, so likelihood of meaningful Congressional action or significant DOJ action in the current environment is slim. The president also wields key powers over antitrust efforts, as he appoints staffers at the Department of Justice and the Federal Trade Commission tasked with interpreting and enforcing statutes.
So while meaningful change at the federal level will be difficult to achieve, there are other actors that have jumped into the fight. A number of states have filed antitrust suits in recent years, including Missouri, which opened an antitrust investigation into Google last November. There’s also the Open Markets Institute, a think tank founded last year that is targeting major monopolized industries with detailed studies and policy proposals.
Allen Grunes, a former antitrust attorney at the Justice Department, told Bloomberg that he was heartened to see scholars and politicians taking the issue more seriously.
“They are tuned in to something real. They are tuned in to a problem,” Grunes said. “The time is right for recalibration.”
With virtually no chance of meaningful antitrust actions coming from the federal level, state attorneys general have taken the lead on going after powerful corporations. Find out who your state attorney general is and brush up on the list of recent state antitrust actions. You can also call congress to directly get in touch with your elected official.