It was the biggest corporate merger in history, and it stunned the markets. On Jan. 10, 2000, America Online, the world’s largest internet service provider, bid $183 billion for Time Warner, the world’s largest content provider. Steve Case, AOL’s CEO, talked of “the global company for the internet age.” Investor Roger McNamee called the event “transformational.” It was widely anticipated to be the start of something significant.

But the merger tanked. Time Warner cast off AOL in 2009. Verizon acquired AOL in 2015 for $4.4 billion, less than 1% of its 2000 value, adjusted for the S&P 500 index. AT&T bought Time Warner in 2018 for 20% of the adjusted price AOL paid in 2000. The merger’s failure is often attributed to executive mismanagement and clashing corporate cultures. But the episode holds lessons for politicians and antitrust regulators, who too often view market rivalry too narrowly.

America Online was enjoying big success: The company brought easy internet access to some 22 million subscribers. AOL rode the crest of the tech bubble, complete with a fabulous valuation. But competitive challenges lurked. AOL’s dial-up service chugged along traditional phone lines, even as cable and phone companies were building faster broadband networks. In 2000, AOL’s subscriber base dwarfed the U.S. high-speed market by a 3-to-1 ratio. By 2006, broadband users dominated AOL’s base 5 to 1.

Regulators feared AOL’s acquisition of Time Warner would stifle innovation. University of Michigan economist Jeffrey MacKie-Mason, who wrote the Federal Trade Commission’s report, said that the combination “will horizontally and vertically increase AOL’s power in the market for internet online services,” which would have anticompetitive effects and harm consumers.

The thinking was that a combined service and content provider would favor its own content and make life miserable for would-be internet upstarts. That would hamper the development of the entire system. As then-FTC Chairman Robert Pitofsky put it: “Our concern here was with access, that these two powerful companies would create barriers that would injure competitors” of AOL and Time Warner.