By the end of the XX century, corporate concentration in the United States became a matter of public interest. Titans like John Pierpont Morgan were behind the creation of AT&T and the great U.S. Steel. Just as an example, in order to create his steel company Morgan bought Carnegie’s corporation – his largest competitor – and paid for it a price that instantaneously made Carnegie the wealthiest man in the world. For his part, Rockefeller was the owner of Standard Oil, the largest oil company in the United States, which transformed him into a tycoon. Just for the sake of comparison, Bill Gates’ net worth amounts to approximately 100 billion dollars in 2019, while, at the peak of his career, Rockefeller’s net worth was 253 billion dollars, adjusted in terms of inflation.
The political response came, among others, by way of the Sherman Act – the first competition law in history. However, the true antitrust movement only started to get strength when Theodore Roosevelt arrived at the White House and Louis Brandeis at the Supreme Court. Perhaps the most important example of the political spirit of this movement was the May 15 1911 decision where the Supreme Court of the United States ordered Standard Oil to split up into a number of regional competitors resulting in Standard Oil of Kentucky, of California, of New York, of Indiana, of Ohio, among others. Currently, Chevron, ExxonMobil, BP, Marathon, etc. are the successors of those companies.
Of course, forced split-up of a company is a recourse with gigantic impacts and, besides, such as all State-derived activities obtained from relatively incomplete information, it is prone to possible errors. Therefore, mandatory split-up as a recourse has been used exceptionally only, However, the US. government considered it necessary once again in 1982 when it split up Bell Systems into parts. What had been one single company resulted in eight competitors from which Bellsouth and AT&T, among others, derived.
The effects on the wellbeing and efficiency of such split-ups are argued. Some people maintain that there are proofs of greater innovation after the split-up, while others say that the benefits were surpassed by the huge cost of State intervention in the market.
At all events, the possibility of destroying monopolies by dint of the law is being considered once again in the United States and is a politically relevant topic. Some people consider that capitalism is becoming a less competitive force, that we are facing levels of corporate concentration and wealth comparable to Rockefeller’s times, and that evidence of monopolistic uncontrolled power are, precisely, the FANGs (Facebook, Amazon, Netflix and Google) in addition to companies such as Apple. Progressive voices from the Democratic Party in the United States such as Warren and Sanders have included a specific split-up plan for the great technological platforms as political basis of their campaign.
Is forced split-up a solution? Doubtless, this question has greatly concerned lawyers and economists recently. Some argue that this romantic view of competition law as the great savior of market economy is merely legal populism, while others mention the necessity of State intervention vis-à-vis the political influence that concentrated wealth implies. This not a simple discussion but, perhaps, one of the most consequential decisions of the last decades will result from this dialogue, particularly because in our globalized world whatever the U.S. Supreme Court decides about the future of Netflix will have a direct impact on consumers worldwide.