“To eliminate the possibility of any rival growing up,” wrote former Vice President Henry Wallace, “some monopolists would sacrifice democracy itself.” To many progressives in the early 20th century, the development of monopolies and trusts remained the key issue facing the American economy and people. Such idealogy culminated in what we know now today as trust-busting. The breaking up of monopolies and trusts to, as Wallace puts it, prevent the “sacrifice of democracy.”
First—what exactly are trusts and monopolies? Although similar and often used interchangeably, trusts and monopolies have slight differences.
Trust: a collection of companies that come together under a single board of trustees that set prices and dominate and dominate markets.
Monopoly: typically a single company that dominates a market or commodity by either controlling an entire process (like owning both steel and railroad companies) or by intimidating, buying, and damaging similar businesses.
The origins of trust-busting can be traced back to the Gilded Age when big businesses began to develop. The first significant piece of “trust-busting” legislation was the Sherman Antitrust Act of 1890. This act deemed monopolizing a felony, and when accompanied by the Clayton Act of 1914 has broken up countless trusts since.
Moreover, trust-busting would not be where it is today without progressives and “muckrakers” pushing the government to enforce the antitrust acts. Most notable was Ida M. Tarbell for her History of the Standard Oil Company. She and other progressives directly led to the Supreme Court’s 1911 decision to break up the Standard Oil Company.
So, how is trust-busting legislation applied today?
In the 21st Century, the United States uses anti-trust legislation constantly. Recently, though, it has been used to sue both Alphabet (Google’s parent company) and Amazon. Google has been sued numerous times in the past couple of years. Epic Games sued Google for the Google Play Store, in which it was decided that Google’s rules for its Google Play Store violated antitrust law. Additionally, an arguably larger case is currently being held against Google. The US Justice Department is suing Google for monopolizing with its advertisement technology. This could be a landmark case for anti-trust laws, representing the first modern internet monopoly trial.
In all, trustbusting seeks to ensure fair trade and prevent harmful monopolies while encapsulating a rich history and sustaining modern implications.