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Elizabeth Warren has made antitrust a major public policy issue in her campaign for the Democratic presidential nomination. She has argued that several high-tech companies such as Amazon, Google and Facebook are just too big and that they should be broken up by the Justice Department in a major antitrust initiative.

Let’s be clear. Using antitrust regulation to break up large companies is an economic and civil liberties nightmare. Those who advocate such policies always fall victim to what Friedrich Hayek termed the “fatal conceit,” that is, the assumption that regulators (and the courts) somehow know better than market participants how goods and services should be produced and sold.

That said, in order to get some perspective on Elizabeth Warren’s proposals for divestiture, let’s examine briefly the two most important corporate breakups in antitrust history: Standard Oil of New Jersey and AT&T.

The Standard Oil Company was structured as a holding company (“Trust”) when it was prosecuted for violating the Sherman Antitrust Act in 1906. Standard held a controlling interest in dozens of subsidiary companies that produced and sold petroleum products in the US. When they lost their antitrust case in 1911, the Supreme Court essentially dissolved a good part of the holding company and instructed several of the operating oil companies (such as Chevron and Standard of Indiana) to operate independently of the parent firm. The argument was that this market restructuring would help restore some rivalry to the oil industry. Yet the old Standard Oil company already had competition from several large rivals such as Texaco, Atlantic Refining, and Gulf so it is still unclear whether divestiture itself actually improved economic conditions for consumers.

Elizabeth Warren wants to break up Google, Amazon, and Facebook but she must realize that these companies, unlike Standard Oil, do NOT have autonomous subsidiaries in similar areas of business. For example, there are no independent search-engine companies “inside” of Google that could compete directly with the original Google platform; the same observation and argument applies to Amazon and Facebook, too. So breaking these firms up does not in and of itself change the competitive landscape in favor of consumers. Antitrust regulation would have to go far beyond any simple breakup in order to achieve the bulk of Warren’s objectives. More on that below.

The breakup of AT&T (1982) is even more curious. Here the Department of Justice sanctioned a divestiture of the regional phone companies (the so-called “baby bells”) from AT&T the parent holding company (which also owned other companies such as Western Electric and Bell Labs). But this divestiture did NOT immediately create any new competition either since the local phone companies themselves were legal monopolies, protected from direct competition (and price regulated) by the states. Effective competition in telecommunications would have to wait for a relaxation of the FCC restrictions on entry into long-distance service and for the widespread adoption of cell phone technology. Thus even here divestiture alone was not sufficient to restore a competitive market process.

Elizabeth Warren has maintained that Amazon, Facebook, and Google are just too big; but too big for whom? She must know that simply being “too big” is not a violation of antitrust law. Indeed, the traditional mission of antitrust is to protect consumers from the high prices and anti-competitive practices established through “conspiracy” or through the exercise of “monopoly power” in some relevant market. Yet Facebook, Amazon, and Google do not charge high prices; indeed, they do not charge ANY explicit price at all but secure the bulk of their revenue through advertising. And even if some of their economic or privacy practices are determined to be questionable at some point, that alone would hardly justify any legal divestiture.

The fact remains that all of these companies are successful because consumers freely and repeatedly use their services. They all compete in legally open markets where other firms are free to raise capital and offer alternatives. Disgruntled consumers that choose not to use the free services of Amazon or Google can easily mouse click to other search engines (Bing in the case of Google) and several other online retailers in the case of Amazon. And, of course, no one is forced to participate in the Facebook universe at all (your author does not) and opting out (if you are in) is always possible. So from a strict price and choice perspective, it would be difficult to make a convincing argument that divestiture is justified or would produce the results intended.

It should be apparent that divestiture alone is not a sufficient condition for altering the competitive landscape in these three high-tech industries. Even beyond divestiture, then, progressives have suggested that the antitrust authorities and the courts might require that these dominant companies create a rival firm and then spin it off. Alternatively, the regulators could order these firms to license their patents and important platform technology to any new firm or smaller rival in order to promote additional competitors. Indeed, Warren has argued that we should view and regulate these companies as if they were public utilities so these licensing and “mandatory sharing technology” proposals are entirely consistent with that perspective.

The trustbusters and the courts actually did some of this — believe it or not — in several older antitrust cases, including the infamous United Shoe Machinery Case decided in 1953 and 1954. But very few antitrust experts now agree that United Shoe Machinery was intelligently decided or that the forced sharing of patents and technology promotes overall economic welfare in the long run.

Antitrust has a very checkered past and those who advocate its use would do well to study its history more closely. After all, there is almost no economic problem, real or imagined, that cannot be made worse by inappropriate government regulation. Antitrust is no exception.