For the first time in decades, American regulators are seriously contemplating a tactic not seen since the era of Rockefeller and Ma Bell: splitting up powerful companies in the name of competition. And this time, the targets are tech giants.
The last serious attempt at a court-ordered breakup came in 2000, when Microsoft was found to have used its Windows monopoly to crush competition in PC software. A lower court ordered a breakup—separating the operating system from Office and other applications—but the decision was reversed on appeal. The breakup remedy, the court ruled, should be used only with great caution. Microsoft ultimately escaped division but was forced to change its business practices.
That case still casts a long shadow. But now, two new antitrust trials in Washington have put the structural remedy back on the table. The FTC is seeking to force Meta to sell off Instagram and WhatsApp, arguing that the company bought them to eliminate competition. And the Department of Justice wants to unwind Google’s dominance in search by forcing divestiture of Chrome and possibly Android.
To understand what is at stake, it helps to look backward. History has shown that breakups can work—but not always in the way regulators hope.
In 1911, the Supreme Court dismantled Standard Oil into 34 companies. Initially hailed as a victory for competition, many of those entities later re-consolidated into today’s oil supermajors. The 1982 breakup of AT&T, on the other hand, produced real consumer benefits, especially in long-distance calling and telecommunications equipment.
And then there’s IBM. In 1969, facing an antitrust suit, it voluntarily unbundled its software and hardware, essentially creating the modern software industry. One of the biggest winners? Microsoft.
These cases illustrate a key point: structural remedies can spark innovation—but they are not magic bullets. Sometimes, softer measures like business conduct restrictions achieve more lasting results.
That lesson may guide judges this time around. While the temptation to “stir the pot” with a dramatic split is strong, the courts know breakups are hard to execute, slow to show results, and difficult to unwind if they go wrong.
But regulators are undeterred. With Meta and Google in the crosshairs, the government is signaling it is willing to push hard—even if the outcome is uncertain.
To understand the potential impact of today’s antitrust efforts, we must now examine the specifics of the Meta and Google cases—and the remedies being proposed.
(Part 2 continues…)