From robber barons to tech bros: The origins of the anti-trust paradox 

The Justice Department has taken Google to court in the first anti-trust case of the internet age. The century long history of anti-trust lawsuits offers a lesson for today’s tech bros: Work with the regulator or face an endless barrage of litigation and court appearances. What’s happening with Big Tech happened with Big Oil, and Federal Trade Commissioner Lina Khan is using the history of trust busting to make her case. 

Lina Khan started at the Federal Trade Commission (FTC) in 2021. She has shifted the commission’s regulatory efforts away from the mere protection of consumer welfare to a broader struggle to restrain technologies and media platforms from excessive growth. In short, she aims to fix the system, not just the symptoms of corporate monopolies.  

For example, the Commission attempted to block the sale of a virtual reality company to Meta, but failed. FTC claimed it would make them the unrivaled leader in the industry. Meta says the acquisition would reduce the cost of business and benefit consumers by way of lower prices, but Khan and the FTC stressed that this level of market dominance creates an anti-competitive trust. In the end, a California judge sided with Meta. 

Khan has also failed to stop Microsoft’s acquisition of Activision on similar grounds. In August, the FTC sought a court order to halt an AI software investment scheme that promised consumers it could reveal the best deals for online shopping. Under Khan, the FTC has reportedly ordered investigations into several more companies beyond Big Tech that have driven prices down by volume selling. Lower prices, Khan argues, should not be the only criteria to judge a monopoly.  

That logic will come as no surprise to those who have followed her career. At Yale, she wrote that Amazon’s online platform had obvious benefits for consumer welfare, even as it stifled competition by sheer growth. The logic goes: The bigger the platform, the greater the control. Above anything else, monopolies desire control of the market. 

If you read Khan’s thesis, you might note that she cites Ida B. Tarbell at the outset. Tarbell chronicled the history of Standard Oil’s rise to become the largest petroleum refiner, producer and distributor in the world. It centralized control of oil in the hands of one person: John D. Rockefeller.

Tarbell’s journalism revealed a Gilded Age story of anti-competitive business practices that sidelined ethics in the pursuit of corporate growth. Standard Oil pushed out small producers and refiners by demanding the railroads give preferential rates to Rockefeller’s company. Distribution costs made the difference in Standard Oil’s price versus the higher prices of their competitors. Tarbell uncovered the conspiracy and the railroads complicity. Beholden to Rockefeller because he shipped the greatest volume of oil on their tracks, the railroads had no choice. 

Tarbell had help in the White House. Theodore Roosevelt and the Department of Commerce and Labor, founded in 1903, empowered the Bureau of Corporations to investigate anti-trust activities. Led by James R. Garfield, the namesake of the assassinated president, the Bureau took on cases that hit headlines by journalists like Tarbell and fellow muckrakers such as Upton Sinclair and Lincoln Steffens.

The press and the government worked in tandem to show the effects that monopolies had on employees, consumers, and society at large. The biggest victory came against Standard Oil. After a decade of lawsuits, the Bureau of Corporations succeeded in prosecuting the petroleum monopoly, which lead to its break-up. 

President Woodrow Wilson reorganized the Bureau of Corporations in 1914 and rebranded it the Federal Trade Commission. Its remit remained largely the same, but Wilson gave it the ability to prosecute corporate offenders alongside the Department of Justice.

Past commissioners have used the prosecutorial powers of the FTC with varying zeal. Lina Khan’s leadership revives the anti-trust intensity last seen during the progressive administrations of Roosevelt and Wilson. Part of the reason for that revival is the 21st century context. Big Tech corporations seek control of the market through the growth of their distribution platforms in a way that the United States has not witnessed since Standard Oil’s reign.  

Of course, the federal government – then and now – wants to protect consumers, but commissioners like Khan recognize that businesses would prioritize growth over profit to corner the market and consolidate power. And that process is never-ending because corporate monopolies will slash prices to push volume even if they are the primary distributor of a good or service.

At first glance that seems like a positive development for the average consumer — lower prices, efficient distribution, familiar platforms. The reality is that a monopolistic platform will erode smaller, innovative businesses and cauterize diversity in the marketplace through anti-competitive practices.  

Lina Khan is not attacking small businesses. Rather, she aims to realize the intentions of the Bureau of Corporations. She has taken up the regulatory charge of Theodore Roosevelt because without these regulations, unchecked corporate growth will only stifle innovation. Lower prices should not be the measure of anti-trust regulation.  

The political winds shifted this way once before. The same can happen in the 21st century.  

Michael Patrick Cullinane is a historian of American politics and an award-winning author. He is the chair of Theodore Roosevelt Studies at Dickinson State University in North Dakota and public historian for the Theodore Roosevelt Association. He specializes in the presidency and hosts a popular podcast on the Gilded Age and Progressive Era (1860s-1920s).