Beneficial Antitrust Actions

When antitrust remedies are considered, as Robert Hahn did (Commentary, Sept. 20) in regard to Microsoft, prophets of doom are always among us. Policy actions could make matters worse, or alternatively they would have no effect and we would be back where we began. Fortunately, history teaches us a different lesson.

In the early years of this century, the petroleum industry was a major pillar of the U.S. economy, and many were surely anxious when the government dismembered John Rockefeller’s Standard Oil Trust in 1912. Yet, from the vantage point of more than 80 years, we can see how successful this action was. Standard Oil’s offspring are still vigorous members of the world petroleum industry, but they act in a highly competitive manner, which benefits consumers.

In 1983, the telephone monopoly was dismembered under the pressure of antitrust officials. Yet, we see now the flowering of telecommunications services that followed from heightened competition. And we know that in the decade following divestiture, between 1983 and 1993, AT&T; and the Baby Bells together represented the largest increase in market valuations on the New York Stock Exchange. If we have the courage of our convictions and the intelligence to make wise decisions, we can expect the same process to occur in software, as it did with telephones and petroleum.

WILLIAM S. COMANOR

Professor of Economics

UC Santa Barbara