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More on the POLITICS of antitrust



At some points over the last decade, I would have said that the large-firm
monopolization case was dead. We had learned our lesson - big-time
trust-busting didn't pay. Mergers were OK and so were businesses that
succeed by competing hard. The few initiatives didn't go very far: the
early 1990s FTC investigation of Microsoft deadlocked; DOJ then wrested a
largely cosmetic consent decree in 1994/95; the FTC looked at but then
walked away from Intel. The political will to do any real damage seemed to
be lacking, perhaps because these were successful export industries. 

Not so now. The events of the last few months suggest that the outlook is
more serious both for Microsoft and for Intel, and further down the road,
for firms like Cisco (king of the network routers) or Sun (if Java ever
lives up to its hype). Money attracts politics (hence the bevy of attorney
generals in action now), and we were foolish to expect otherwise. The
implicit policy of going easy on America's information technology success
stories has been abandoned. Aside from the competitor complaints and aside
from the simple populist attack on wealth, another factor may play a role: 
populist resentment of the "digerati" (those who are computer savvy). (I
intend a parallel with the late 1920s, when despite the general boom,
large segments - the buggy whip manufacturers - complained about
"profitless prosperity," laying the political groundwork for Hoover's
veiled New Dealism. No, I am not predicting another Great Depression.)