Answer :
The US Justice Department's 1984 antitrust lawsuit against AT&T led to the breakup of AT&T into 'Baby Bells' to provide local telephone service and upended their long-distance service monopoly. This highlighted the fragility of monopolies and government's commitment to enforce anti-trust laws, such as blocking the AT&T-BellSouth merger in 2006 and AT&T's attempt to acquire T-Mobile in 2011 to preserve market competition.
The antitrust lawsuit filed by the US Justice Department against AT&T in 1974 was a significant legal challenge resulting in the end of AT&T's monopoly over telephone services. In 1984, this culminated in a ruling that divided AT&T into seven Baby Bells, which provided local telephone services, while AT&T continued to offer long-distance services. Following the ruling, these regional companies were tasked with providing local services, illustrating a shift from a national monopoly to several regional monopolies. The aftershocks of this event showed the inherent instability of monopolistic power in an industry where technological changes and governmental policy play influential roles.
The events surrounding AT&T's breakup are indicative of the ongoing battle between large corporations seeking to maximize economies of scale and government regulations designed to prevent anti-competitive practices. For instance, after AT&T's reconsolidation efforts over the years, it encountered resistance from regulatory bodies. Notable instances include the Justice Department and the FCC blocking a proposed merger between AT&T and BellSouth in 2006, and the Justice Department's action to stop AT&T's acquisition of T-Mobile in 2011 to preserve market competition. These actions demonstrate the enforcement of anti-trust laws to maintain healthy competition and protect consumers from potential negative consequences of monopoly power in the market.