Theodore Roosevelt’s Struggle with Monopolies
Back in 1903, Theodore Roosevelt found himself facing a significant challenge. The Sherman Antitrust Act, which had been enacted in 1890, was effectively ineffective. It wasn’t regularly applied, and when it was, the legal process dragged on. Roosevelt was particularly intent on addressing what he viewed as monopolistic practices, especially within the railroad and energy sectors.
His concerns about monopolies were understandable. After all, the Gilded Age in America saw the nation morph from a regional player into a global powerhouse following the Civil War.
With the rapid expansion of commerce, a handful of corporations began to monopolize the market. Previous president William McKinley had sought assistance from Congress to rein them in but to no avail. By the time Roosevelt took office in 1901, some companies were nearly monopolizing entire industries.
Luckily for Roosevelt, Congress acted by passing the Expedited Method. This unanimous legislation allowed the attorney general to identify certain antitrust cases as nationally significant, thus creating a special three-judge panel, akin to contemporary local courts. Following expedited hearings, appeals were limited to the Supreme Court.
Roosevelt, along with his successor William Howard Taft, initiated numerous antitrust lawsuits aimed at dismantling the power of major industries like railroads, tobacco, and energy. It’s hard to imagine how dominant these corporations were back in the late 19th century.
For instance, Standard Oil controlled about 90% of American oil production. American Tobacco produced 86% of cigarettes sold in the U.S. The Northern Securities Company exerted almost complete control over freight railroads between Chicago and the Pacific Northwest. By the end of Taft’s term, these giants had been effectively dismantled.
Ironically, the Expedited Act ultimately fell victim to its own achievements. While many large trusts were dissolved and some companies were broken up, the Bell Telephone System lingered until the late 20th century. With the decline of large-scale antitrust lawsuits, smaller, more detailed lawsuits began to take their place. Eventually, the law was repealed in the 1980s, and antitrust cases started being treated like typical civil cases.
Fast forward to today, the oil industry is quite diverse, and no single tobacco company dominates the market. However, we’re seeing new industries sprout up with the potential for monopolies. The notion that one company might control the online search landscape seemed far-fetched merely three decades ago. Now, it’s also hard to believe that the same company could extend its reach to browsers and other facets of the Internet. Amazon stands out as a case in point, commanding a substantial slice of the book market.
Even more worrisome are the potential monopolies in artificial intelligence. OpenAI has been around for about a decade, while its main competitor, Anthropic, is quite new, having launched in 2021. It’s noteworthy that Google owns 14% of Anthropic.
The rapid development of AI raises alarms about the possibility of monopolies controlling expansive language models. This scenario poses serious concerns, especially since current U.S. antitrust laws don’t adequately address these evolving technological and economic landscapes.
While reforms to antitrust laws are urgently needed, the Basic Law, which still serves as the foundation for many antitrust lawsuits, is quite outdated, dating back to 1890. A practical solution could involve revisiting the Expedited Act, with minor adjustments to fit today’s judicial framework.
With expedited hearings by the Supreme Court, prioritizing antitrust cases could help prepare the United States to tackle the monopolies of the 21st century.
Initial worries about overburdening the Supreme Court can be set aside. In earlier times, the U.S. government operated less frequently. Nowadays, though Congress still takes Fridays off, members spend far more time in Washington, and the presidency is a continuous endeavor.
Yet, the Supreme Court’s schedule can remain empty for extended stretches. Should it need to handle multiple cases deemed critical by the attorney general, judges might find themselves needing to cut short vacation time.
Reviving the Expedited Act could benefit everyone involved. It would eliminate long waits for investors and employees involved in merger disputes. Antitrust advocates would no longer have to endure prolonged uncertainty. And, ultimately, America would be better positioned to deal with sudden monopolies that can emerge in a flash amid a bustling economy.
Delays in antitrust proceedings serve no one well. It’s crucial that Congress moves forward with a new iteration of the Fast Track Act to re-establish timely antitrust laws.
