Cynical Capitalist

Government and monopolies don't mix

The Sherman Antitrust Act is a landmark federal statute on competition law passed by Congress in 1890. It prohibits certain business activities that reduce competition in the marketplace. It was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by the United States federal government.

Standard Oil
Established in 1870, Standard Oil was the largest oil refiner in the world and one of the world's first and largest multinational corporations. By 1890, Standard Oil controlled 88% of the refined oil flows in the United States. In 1909, the US Department of Justice sued Standard and on May 15, 1911, the US Supreme Court upheld the lower court judgment and declared the Standard Oil group to be an "unreasonable" monopoly under the Sherman Antitrust Act. It ordered Standard to break up into 34 independent companies, the biggest two of the companies were Exxon and Mobil.

Bell Systems
Once a government-regulated monopoly, Bell Systems (AT&T) went through "The Bell System divestiture", or the "breakup of AT&T" initiated by the filing of an antitrust lawsuit by the U.S. Department of Justice in 1974. Effective January 1, 1984, AT&T's local operations were split into seven independent Regional Holding Companies, also known as Regional Bell Operating Companies (RBOCs), or "Baby Bells". Afterwards, AT&T, reduced in value by approximately 70%, continued to operate all of its long-distance services.

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