What the AT&T Breakup Teaches Us About a Big Tech Breakup

The multi-pronged attempt by state Attorneys General, the Department of Justice, and the Federal Trade Commission to find Google and Facebook liable for violating antitrust law may result in breaking up these giant companies. But in order for any of this to cause lasting change, we need to look to the not-so-recent past.

In the world of antitrust, the calls to “break up” Big Tech companies translate to the fairly standard remedy of “structural separation,” where companies are barred from selling services and competing with the buyers of those services (for example, rail companies have been forced to stop selling freight services that compete with their own customers). It has been done before as part of the fight against communication monopolies. However, history shows us that the real work is not just breaking up companies, but following through afterward.

In order to make sure that the Internet becomes a space for innovation and competition, there has to be a vision of an ideal ecosystem. When we look back at the United States’ previous move from telecom monopoly into what can best be described as “regulated competition,” we can learn a lot of lessons—good and bad—about what can be done post-breakup.

The AT&T of Yore and the Big Tech of Today

Cast your mind back, back to when AT&T was a giant corporation. No, further back. When AT&T was the world’s largest corporation and the telephone monopoly. In the 1970s, AT&T resembled Big Tech companies in scale, significance, and influence.

AT&T grew by relentlessly gobbling up rival companies and eventually struck a deal with the government to make its monopolization legal in exchange for universal service (known as the Kingsbury Commitment). As a monopolist, AT&T's unilateral decisions dictated the way people communicated. The company exerted extraordinary influence over public debate and used its influence to argue that its monopoly was in the public interest. Its final antitrust battle was a quagmire that spanned two political administrations, and despite this, its political power was so great that it was able to get the Department of Defense to claim its monopoly was vital to national security.  

Today, Big Tech is reenacting the battle of the AT&T of yore. Facebook CEO Mark Zuckerberg assertion that his company’s dominance is the only means to compete with China is a repeat of AT&T’s attempt to use national security to bypass competition concerns. Similarly, Facebook's recent change of heart on whether Section 230 of the Communications Decency Act should be gutted is an effort to appease policymakers looking to scrutinize the company's dominance. Not coincidentally, Section 230 is the lifeblood of every would-be competitor to Facebook. In trading 230 in for policy concessions, Facebook both escapes a breakup and salts the earth against the growth of any new competitors to become the regulated monopoly that remains.

Google is a modern AT&T, too. Google acquired its way to dominance by purchasing a multitude of companies to extend its vertical reach over the years. Mergers and acquisitions were key to AT&T's monopoly strategy. That's why the government then sought to break up the company – and that's why the US government today is proposing breakups for  Google. Now, with AT&T,