Dawn of the 20th century: a series of articles published in McClure's Magazine by the American journalist Ida M. Tarbell detail the rise and development - from the early days of unfettered competition to monopolization - of an industry and one man's dream. The industry is oil production, a nascent sector that emerged around 1872 in the so-called Oil Regions and became the driving force of the US economy over the next three decades. The dream is John D. Rockefeller's ambition to dominate the entire industry, from extraction and transportation to refinement and marketing. His methods? From rebates and drawbacks to bribes, blackmail, espionage and price cutting, all underpinned by remarkably modern and efficient management techniques. John D. Rockefeller’s dream, though briefly realized, was soon shattered. A series of journalistic exposés,[1] the enactment of antitrust legislation by Ohio Senator John Sherman, and President Theodore Roosevelt's determination to apply the Sherman Antitrust Act to predatory and discriminatory business practices (and to open access to the most crucial network of the time, the railways) brought down the magnate's empire and buried his dream.  

Fast forward to the end of the 20th century: the advent of personal computers and the widespread access to the Internet, a tool developed by the Pentagon and academia, brought software manufacturers (mainly Microsoft) under the growing scrutiny of antitrust authorities and academic authors. Antitrust issues such as the ordoliberal thought, Schumpeter’s creative innovative destruction, and other once arcane concepts for antitrust lawyers and scholars become daily topics for Wall Street Journal or Financial Times readers.

Worrisome non-market concerns about privacy, democracy, and the diminishing role of governments are still to surface. All are substantial issues, although antitrust laws aren't designed to address “the inequalities of condition, of wealth, and opportunity” that increasingly concern people and some authors alarmed by the pervasive reach of digital tools in our lives..[2] 

A vigorous debate develops among scholars, officials, and practitioners about the role of antitrust law in the new digital era and the responsibilities of competition authorities. Two distinct camps stand opposed to each other. One camp believes that the digital world can be managed, from a competition standpoint, using the same principles that have been in place since the beginning of the 20th century ("old wine in new bottles"). The other camp argues for new rules, including ex-ante regulation, unthinkable in "classic" antitrust contexts, claiming that globalization, rapid responses, and economic factors such as innovation, zero marginal cost, and network effects in the digital environment require innovative responses (including, for some of them, less antitrust).

To put things in perspective for younger generations who have always lived in the digital era: the Web was developed in 1991,[3] Google truly entered the market in late 1998, Facebook was created in 2004, and the iPhone was launched in 2008. 

So, this debate is still in its early stages, ongoing for just a few years, with the digital platforms yet to emerge, when Robert Pitofsky, the then FTC Chairman, summarizes his "old wine in new bottles" view in February 1999[4] [4] on “the question of whether antitrust principles, developed primarily in the context of smokestack industries, should apply comparably and with equal force to new problems that emerge in connection with high-tech industries” and stating, “I believe it is essential to acknowledge that high-tech industries are different and enforcement must take those differences into account”. He argues for the continued application of antitrust law, while acknowledging the need to consider factors such as "technical issues, speed of market transitions, need for collaborative activities, barriers to entry, output and price effects, network efficiencies".  Pitofsky’s analysis from early 1999 is lucid and forward-looking in giving his final answer to the question (“I believe antitrust should – indeed, must – continue to apply”). 

Pitofsky's perspective reflects the balanced view of a highly regarded Washington-based technician and antitrust scholar, a “follower” of Sherman. However, as Rockefeller, (whose dream had been broken by a journalist more versed in the role of women in the French Revolution than in antitrust law), learned, history is also shaped by non-technicians. Ida Tarbell fought for the economic and informational freedom of her fellow citizens in the Oil Regions, and more broadly, for all Americans. John Perry Barlow, a libertarian social activist and co-founder of the Electronic Frontiers Foundation (EFF), can be considered rather one of Tarbell's "followers". Certainly, he wasn't as balanced a legal expert as Pitofsky. In 1996, Barlow issued a Declaration of the Independence of Cyberspace, arguing for the digital realm to remain free from political and, by extension, legal interventions.

In retrospect, Barlow's stance might seem romantic and unrealistic, yet it was no less insightful than Pitofsky's perspective. In fact, it may have been more prophetic than Pitofsky's more "technical" analysis, especially when considering the title of one of Barlow's articles, "Selling Wine Without Bottles: The Economy of Mind in the Global Net,"  [5] which was published around the same time as Pitofsky's speech.

In a nutshell, Barlow claimed that:

• The internet would soon become the primary, if not the only, medium for information transmission. Once this happened, all the products of the Information Age would exist “either as pure thought or something very much like thought: voltage conditions darting around the Net at the speed of light”. These could be perceived as glowing pixels or transmitted sounds, but they could never be touched or claimed to be "owned" in the traditional sense of the word; 
• “Humans have not inhabited Cyberspace long enough or in sufficient diversity to have developed a Social Contract which conforms to the strange new conditions of that world.  Laws developed prior to consensus usually serve the already established few who can get them passed and not society as a whole”;
• “The greatest constraint on your future liberties may come not from government but from corporate legal departments labouring to protect by force what can no longer be protected by practical efficiency or general social consent”.

One can hardly disagree that the aforementioned points accurately depict what has transpired over the past quarter of a century. It also serves as a reminder that sometimes, lawyers may need to close their legal books and listen to music for insight (John Perry Barlow, in addition to his other roles, wrote many hits for the band The Grateful Dead).

The author apologizes for the lengthy preamble, but its purpose is to contextualize the debate that has reshaped the antitrust landscape, including the roles and organization of competition authorities, over the past thirty-five years. This is the same period it took for the burgeoning oil industry to be monopolized, regulated, and then returned to a competitive state over a century ago.The aim of this brief article is to analyze, in parallel, our current position in both law and reality, and to understand where this debate has led us. Particularly at a time when the "new oil" - the digital industry - is so deeply entrenched in our lives. Ultimately, the question arises: what is the difference, if any, between the thinking that led to the breakup of the Standard Oil Company and the current legal disputes that have recently come "dangerously"[6] close to a similar resolution, at least in the USA?

The early wave of antitrust enforcement in the digital world in Europe followed the “old wine in new bottles” approach, strongly enforcing long-standing concepts under Article 102 TFEU and in merger cases.  Though past experiences[7] showed that dominant positions are transitory in this new digital landscape, the European Commission often applied competition rules in a rather mechanical manner. Initial reasoning, as applied in a number of early cases, suggested that demand-side economies (network effects), through subsequent positive feedback effects, could tip the market to dominance for the first mover, starting from its initial locked-in consumers. However, the reality proved more complex. 

For instance, network effects often imply a lack of compatibility and an all-or-nothing consumer choice, which cannot be taken for granted, particularly in areas like physical networks. [8] And, as one commentator noted, “for internet and mobile telephone markets where the customer’s switching costs are low”, the network can quickly unravel if quality is poor or prices are high, posing “a real threat”.[9] 

The competition authorities' approach seemed to be tinged with anxiety and unease regarding the potential creation of dominance, focusing on preventative measures rather than forward-looking analysis. 

This apprehension seemed to diminish in the years after 2000 when, despite initial market consolidation, the European Commission appeared more lenient in merger cases.[10]  Dominance cases were sparse and often characterized by lengthy proceedings, incompatible with the almost instantaneous nature of competitive effects in new economy markets. 

We are talking more about the political initiative (of different Commissions), since the level of economic analysis evolved to become more sophisticated.[11] Instead of mechanically applying network effects theory, DGComp and the Chief Economist Office began more and more to scrutinize actual threats, review compatibility issues, and delve into the value of, and possible leverage on, data. The focus shifted from dominance itself to specific market dynamics, influenced by the understanding that in non-static monopolies, the market power/consumer benefits trade-off changes. In such an industry, fragmented markets could negatively impact consumer welfare in terms of higher prices, less innovation and quality, and similar effects could also result from strict enforcement of price discrimination or excessive price prohibitions when the marginal cost of supply is negligible or even zero (as is often the case in the tech industry). However, the Commission's action during this phase seemed less forceful than required, and the industry's lead over the enforcers seemed to widen.

Perhaps due to awareness of its lackluster impact in an increasingly fast market and its lack of control over this new world, the Commission has recently entered into a ‘third phase’, adopting an approach more inclined towards ex-ante regulation. The DMA and DSA, products of a long-running debate, can be viewed in different ways. Some see them as tools for review, while others cynically label them as tools for bureaucratic control. Some commentators laud these instruments as a counter to the laissez-faire attitude of US antitrust authorities, while others note that despite the lack of ex-ante controls and relatively rare ex-post enforcement of antitrust rules, the US tech sector has grown much more dynamically than its European counterpart. 

In the United States, in fact, the situation post-2000 was markedly different, leading to numerous disagreements in tech antitrust case assessments across the Atlantic (at least during the Monti/Kroes/Almunia era). Based on the assumption that in the new economy “The only incentive to produce anything is the possession of temporary monopoly power, because without that power the price will be bid down to marginal cost and the high initial fixed costs cannot be recouped”,[12] in the new millennium the approach of safeguarding competitors was abandoned.[13] Without going into much detail, irrespective of whether they were Democratic or Republican appointees, the DoJ and FTC maintained a consistent stance towards this sector during the Bush, Obama, and first term of Trump: confidence in the business's leapfrogging nature and the market's self-correcting abilities. Things started changing only under the Biden administration, with Kantor’s DoJ and Lina Khan’s FTC. It's widely accepted that US antitrust policies have become more aggressive in the past four years, with the two agencies dividing the work to concentrate resources on specific targets more effectively. However, it's worth noting that before Kantor and Khan, US antitrust agencies may have believed that US tech actors were already under enough pressure from foreign antitrust authorities, primarily those in the EU and China. 

Despite being more discontinuous in their enforcement, US antitrust authorities appear more consistent and effective than their Brussels-based counterparts, probably because they quickly and pragmatically adjusted to one simple fact: as the world changes, the characteristics of supply and demand also change. Since in this new environment “corporations function more as nonlinear, complementary clusters than as size or market-share defined hierarchies as more companies compete through [successful] cooperation and collaboration [with other companies]… More and more the strength and profitability of a corporation is defined by the networks to which it belongs”, then “New metrics by which to evaluate corporations are required”.[14] 

European antitrust authorities, however, still seem to view customers through an increasingly outdated lens, overlooking growing cultural and sociological factors that progressively add to traditional economic ones. Consumers are becoming more volatile, seeking experiential consumption and finding it less costly, yet more disruptive on a personal level, at the “comfort bubble” time, to switch from one social network to another. It's conceivable, if not even more plausible, that in this “new world”, adopting new metrics could enhance competition management more effectively than introducing new regulatory streams.[15]

No need to wait for the Draghi report to see that “the Emperor has no clothes”, that Europe has lagged in the new economy, and its influence in the tech sector is less and less significant.  Adding new tools to the regulatory arsenal or being overly cautious, even in non-horizontal mergers, at a time when the competition landscape is global, all the more in online industries[16], doesn't replace the need for a thorough understanding of the changing reality. Comprehending new metrics and hastily developing case-specific harm theories are distinct exercises: without entering into the merits of the cases, the "ecosystem harm theory" developed in the DoJ briefs in the recent Google US case appears less hasty than footnote 229 of the EU Booking/Etraveli decision.[17] If European antitrust authorities believe that confining gatekeepers with a DMA/DSA “straitjacket” is sufficient, it bodes poorly for Europe.

Firstly, the golden age for European competition law was when it was used against (national) regulation to deepen competition through markets: when using it to dismantle the territorial partition of markets through IP or customs regulations, when fostering competition in energy markets prior to the implementation of liberalization directives, when circumventing drug price harmonization concealed under the disguise of a national pharma regulation shield.

Secondly, possibly due to the professional background of the Commission staff and the insulated “bubble” nature of Brussels, the EU has struggled with regulation. While Pitofsky warned already in 1999 that digitalization would impact the entire economy across the board, the car industry was simultaneously starting to face the digitalization revolution and the related customer expectations vis-à-vis what is actually the third digital platform after PCs and phones, that is, cars.[18] The recent mismanagement of the transition from internal combustion vehicles to electric vehicles (EVs) in the car industry, an industry where the EU had global leadership and employs, directly or indirectly, 13.5 million EU citizens, is a stark example of the EU’s struggle with regulation. This botched transition has led to a decline in EV sales in the EU and of combustion vehicles globally, under the pressure of increasingly aggressive foreign competitors, the prospect of 15 billion Euro fines for the struggling industry, and the need for it to purchase carbon credits from Mr. Musk. Without this helping consumer welfare.[19] 

This situation arose because a fundamental concept was overlooked: while it's possible to impose emission standards on individual manufacturers, (i.e., each of your cars cannot produce more than X emissions),  imposing industry-wide standards that are dependent on demand, (at least X cars sold every year must be EVs), and therefore beyond the industry's control, is a recipe for disaster. A lack of understanding of new market metrics that could even be seen as an abuse of the regulator’s dominant position over the market!

Some argue that excessive intrusion in the new economy could stifle innovation, while others claim inherent anticompetitive dynamics.[20] The crucial point is that understanding new economy metrics is essential for a balanced approach. Data and oil are different. The old and new economies are different. People's minds have evolved since the time of John Rockefeller.

When John Perry Barlow talked about the “economy of mind” he understood in advance the deepest implications of this brave, dangerous, new world.  He wrote “The more universally resonant an idea… the more minds it will enter and remain within.  Trying to stop the spread of a really robust piece of information is about as easy as keeping killer bees South of the Border.  The stuff just leaks”. Unlike oil, data is abundant, not scarce. Although social media did not exist at that time, Barlow understood that the multiplication of data through consumer-generated content would be a strategic pathway, not a threat.

Therefore, the massive break-up idea proposed by some, reminiscent of Standard Oil times, may not be the right solution today and should be kept aside as a last resource in very extreme situations. But also the idea of dealing with this “economy of mind” just by adding brand new rules, could not lead far. Yes, if we look at the specific section of DG Comp dedicated to the DMA, there are several compliance reports, cases, and consultations aimed at preventing abuses. However, political elections have recently been annulled due to alleged misuse of social networks, another social network is currently accused of unduly influencing upcoming elections and causing, by its algorithms, the fall of Treasury bonds.

Without claiming to establish authentic “competition renewal agendas” to address these issues, as some authors have done,[21] perhaps the approach of "old wine in new bottles" could prove more effective. Provided it is driven by (i) the adoption of accurate, modern metrics, (ii) respect for the process of market innovation/creation/destruction for dominant positions, (iii) swift and substantial responses (making use of current powers by European antitrust authorities) to undue, abusive “leaking” into neighbouring markets, which could result in “clustering dominances” that may freeze market entry, competition and innovation. New metrics for this new world can include, for instance, government affiliations, sources of research funding, reserved access to large and sensitive datasets,[22] cross directorships,[23] and HR hiring.  

Indeed, as the Queen said, “Now, here, you see, it takes all the running you can do to keep in the same place.  If you want to get somewhere else, you must run at least twice as fast as that”.[24] The world is running faster, for both lions and gazelles, for both muckrakers and competition enforcers. Simply multiplying new rules and layers of compliance will not necessarily keep pace, since “Real world conditions will continue to change at a blinding pace, and the law will get further behind, more profoundly confused” (John Perry Barlow, another man with a dream and a poet).

The author gratefully acknowledges the invaluable insights and feedback provided by colleagues José Rivas, Federico Marini Balestra, and Simone Cadeddu on an earlier draft of this article. Any errors or inaccuracies remain solely the author's responsibility, and the views expressed herein do not necessarily represent those of the firm.

If you would like more information on this topic, or to exchange views or express your polite disagreement with a battle-hardened lawyer, please contact Nicola Ceraolo. 

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[1] The articles were later published in the form of a beautiful book, “The history of the STANDARD OIL COMPANY”, which can still be found online.

[2] Tim Wu, The curse of bigness – Antitrust in the new gilded age, Columbia Global Reports, 2018, p. 31, reporting the words of Senator Sherman during the debate of the Sherman Antitrust Act.

[3] According to something more than a legend, in 1992 it was still small enough that its creator, Tim Berners Lee, could keep a manual list of all the servers available…

[4] Antitrust analysis in High-Tech Industries: a 19th Century Discipline Addresses 21st Century Problem, Prepared remarks of Robert Pitofsky, Chairman, Federal Trade Commission, at American Bar Association, Section of Antitrust Law’s Antitrust issues in High-Tech Industries Workshop, February 25-26, 1999, Scottsdale, Arizona, USA.

[5] http://www.eff.org/pages/selling-wine-without-bottles-economy-mind-global-net.

[6] Although broadly voted and well-respected by his supporters, Donald J. Trump, new US President, can hardly be considered a “legal expert”, certainly not in the technical sense of the words. However, the author has committed to acknowledge debt to sources (whoever and however qualified they may be…) and this is the word he used when asked about the Google break-up mentioned by the DoJ as a possible compliance solution following Justice Mehta’s decision of August 5, 2024 in cases No. 20-cv-3010 (APM), US et al. V. Google LLC and State of Colorado et al. V. Google LLC, in The Washington Post, 5 major tech battles to watch in 2025, January 7, 2025

[7] Case 60/81, International Business Machines Corporation v Commission, judgment of 11 November 1981.

[8] Case M.1069, WorldCom/MCI (II), decision of the European Commission of 8 July 1998, and Case M.1741, MCI WorldCom/Sprint, decision of the European Commission of 28 June 2000.

[9] C. Veljanovki, E.C. Antitrust in the New Economy: Is the European Commission’s View of the Network Economy Right?, in ECLR [2001], issue 4, p. 115.

[10] Case M.6281, Microsoft/Skype, decision of the European Commission of 7 October 2011 (“large market shares may turn out to be ephemeral… are not necessarily indicative of market power and, therefore, of lasting damage to competition”, General Court in T-79/12 Cisco Systems Inc. v Commission, 11 December 2013 para. 69) and Case M.7217, Facebook/WhatsApp, decision of the European Commission of 3 October 2014.

[11] This was probably the case also thanks to the general stimulus of the Court of Justice, which over the same period quashed many Commission decisions, such as Case M.2220, General Electric/Honeywell, decision of the European Commission of 3 July 2001.

[12] L. Summers, The New Wealth of Nations, Remarks by Treasury Secretary Lawrence H. Summers at the Hambrecht & Quist Technology Conference, San Francisco, California, May 10, 2000.

[13] ”The Sherman Act… does not give judges carte blanche to insist that a monopolist alter its way of doing business whenever some other approach might yield greater competition”, U.S. Supreme Court, Verizon Communications Inc. v. law Offices of Curtis v. Trinko, LLP, 540 US398 (2003). See also AOL/Time-Warner merger (Federal Trade Commission decision of 14 December 2000).

[14] J.P. Quinlan – A.L. Prochniak, Rethinking the Concept of the Corporation, Morgan Stanley Dean Witter, Equity Research, 2000.

[15] For Tim Wu, The curse of bigness – Antitrust in the new gilded age, cit., p. 18, antitrust “needs better tools to assess new forms of market power, to assess macroeconomic arguments, and to take seriously the link between industrial concentration and political influence.  It needs to take advantage of all that economics and other social sciences have to offer”.

[16] Case M.10615, Booking/Etraveli, 25 September 2023,where, notably, the Commission blocked a merger which was cleared in phase 1 by the UK CMA, for instance, when discussing merger-specific lessening of competition, limits itself just to state that network effects “create a high barrier to entry and expansion to new entrants and smaller OTAs”.

[17] “Ecosystem of services refers to Booking’s wide range offer of services that cover multiple facets of the travel experience (for example, different types of accommodation, flights, taxis, car rental, tickets to attractions)”. European Commission, M,10615 – Booking Holdings/Etraveli Group.

[18] In a speech in NY in 2015 whose presentation can still be found online, the late CEO of FCA (now Stellantis), Sergio Marchionne, showed with a few numbers that already since 2000, historical returns (EBIT margin and ROI) of the car industry were broadly below cost of capital, the huge overall industry investments for product development (>2bn/week in 2014) were not sustainable without a sector consolidation and industry digitalization would soon make this even more unbearable, Confessions of a capital junkie.  An insider perspective on the cure for the industry’s value-destroying addiction to capital, April 19, 2015.

[19] According to Il Sole 24Ore, January 3, 2025, in front of lesser sales of vehicles in the fork 10/33% between 2016 and 2023, margins per vehicle of the same European carmakers have increased far over 50%.  In Italy, the average cost of a car has increased by almost 50% since Covid time.

[20] A. Ezrachi – M.E. Stucke, Virtual competition, the promise and perils of the algorithm-driven economy, p. 29.

[21]  Tim Wu, The curse of bigness – Antitrust in the new gilded age, cit., chapter “A neo-Brandeisian agenda”.

[22] According to several qualified online press sources (inter alia, The Economic Times, CnEVpost, Reuters,…) Tesla recently secured key clearance from Chinese authorities to use its Chinese car data for training its AI Full Self Driving algorithm while renouncing to transfer data outside China. 

[23] The FTC recently made its consent to the Exxon Mobil/Pioneer Natural Resources deal conditional to the latter’s CEO not being included in the former’s Board.  Collusion in concentrated markets (such as tech market) may sometimes follow without any unlawful contact.

[24] L. Carroll. Through the Looking Glass.