The Google antitrust trial, which began last week, is ostensibly focused on the past – on a series of deals that Google made with other companies over the past two decades.
The history of antitrust prosecutions shows this again and again: Loosening the grip of a controlling monopolist may not always solve the problem at hand (here, an online search monopoly). But it can open up closed markets, shake up the industry and spark innovation in unexpected areas. If Judge Amit P. Mehta of the U.S. District Court for the District of Columbia, who is presiding over the trial without a jury, decides this case correctly, he’ll be helping the entire tech world and the American economy more broadly. Consider the antitrust lawsuit that led to the breakup of AT&T’s telephone monopoly in 1984. At the time, prosecutors were focused on lowering the pricing of long-distance telephone calls and giving consumers greater choice. But more important and less anticipated, the breakup helped to jump-start the internet revolution of the 1990s, in part by making it easier for companies to conduct business over phone lines and for customers to connect modems to them. Or consider IBM’s monopoly on mainframe computing, which was challenged by private and public antitrust suits in the 1960s and ’70s. At the time, a chief concern was the use of « vaporware » tactics in the mainframe market, which affected a now-long-dead company called the Control Data Corporation. But what matters today is that IBM, out of fear that it would be broken up, unbundled its software from its hardware, which created a market for software sold as a separate product – spawning, over time, what is now a multi-trillion-dollar industry. The suit also weakened IBM at the very time that personal computers were emerging, benefiting tiny upstarts like Apple and Microsoft.
