Alcoa Inc (AA), AT&T Inc. (T): America’s Secret Weapon Against Too-Big-to-Fail

The Sherman Act proved less useful against metal smelters, as both Alcoa Inc (NYSE:AA) and United States Steel Corporation (NYSE:X) survived efforts to break them up by using similar reasoning, which reduced the scope of the Act to considering competitive methods rather than size alone. Despite the reduced importance of size considerations, AT&T Inc. (NYSE:T)’s massive reach was too much to ignore by the time it was finally broken up in 1982. Thanks to that split, we can add two more companies to the number of those Dow components created from a court’s divestiture order. The failure of the government’s antitrust case against Microsoft Corporation (NASDAQ:MSFT) was extremely controversial at the time, as the company had a number of defenders and detractors who each saw transparent political wrangling throughout its move through the courts. Microsoft Corporation (NASDAQ:MSFT) was actually ordered to split in mid-2000, but this was later overturned under somewhat dubious reasoning. At any rate, it did little to settle the issue of the Sherman Act’s applicability to software companies.

Today’s globalized business environment makes it somewhat less likely that the Sherman Antitrust Act will be used against any major American companies. However, it’s not beyond the realm of possibility, provided lawmakers and regulators can muster the conviction necessary to push back against today’s too-big-to-fail monopolies. What companies do you think might come under the crosshairs of a Sherman Act-wielding Department of Justice? Will there be as much of a reason to break up businesses as technology continues to make it easier to disrupt so many long-standing business models?

The article America’s Secret Weapon Against Too-Big-to-Fail originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology. The Motley Fool owns shares of Microsoft.

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