Do Amazon and Google lock out competition? - The Economist   

Anti-monopoly cases have been known to reshape corporate America. In 1984 at&t’s telephone network was found to have excluded competing firms. The company was controversially broken up in a move that ultimately led to a boom in innovation among its rivals. Meanwhile, a case against Microsoft in 1998 may have kept the door open for Google’s subsequent rise. Microsoft had bundled together its Internet Explorer browser with its Windows operating system, and made other browsers more difficult to install. Some business historians think the case, by stopping this practice, made life easier for new browsers. It may also have distracted Microsoft from developing its own search engine.

Today, two big cases could redefine the limits of monopolies in the internet age. On September 12th America’s Department of Justice (doj) began its court battle against Google over the firm’s deals to obtain default status on phones and browsers. On September 26th the Federal Trade Commission (ftc), chaired by Lina Khan, sued Amazon for allegedly penalising third-party sellers that offered lower prices on other sites, among other harmful practices. In both cases, the government thinks the tech giants are so dominant that their attempts to preserve market power are suspect. This raises a question: what counts as anticompetitive?

Historically, practices that might be ignored for a startup have not been tolerated in a dominant firm. John Rockefeller’s Standard Oil was broken up in 1911, in part for striking deals with railroads that made it impossible for other oil firms to compete. Antitrust historians still debate the extent to which these deals were abusive—after all, Standard Oil benefited from economies of scale and bulk orders commonly receive discounts. But its size and bargaining power led to scrutiny. Before the firm’s break-up, it had cornered 90% of oil refineries. Microsoft’s bundling was found to be problematic because it had over 90% of the market for operating systems on personal computers. In both cases, the courts believed that dominant firms had made life too difficult for newcomers.

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