Meet the Anti-Apple Coalition.

Remember when everyone was terrified that Apple and Google were going to collude to take over the world? Surely Uncle Sam should step in, they claimed. Uncles Sam responded with “we’re watching you”. This was the next great anti-trust target…. or… not.

Over the course of just one year, Apple and Google have gone from cozy to cantankerous. The reason is simple: competition. As Google’s Android has gained momentum, they’ve become the main competitor to Apple’s industry changing iPhone. No matter how enormous the company, the advantages that come from competing to steal customers proves too temping to make industrial cartels unaided by government regulations very long-lived.

Left out in the cold of all this is the last great satan in need of anti-trust regulation, Microsoft, who has managed to prove yet another truism about the free market: staying on top is very, very hard. The paradigm shift to mobile computing has left Microsoft completely out, with Windows Mobile being relegated to the “other” category on the mobile market share pie chart. I’m not even sure if most teenagers have heard of IBM. American business history is a graveyard of these allegedly unstoppable, immortal juggernauts.

Even many principled small-government minded people believe that government has a role to play in regulating collusion and cartel activities of large firms. Milton Friedman himself confesses to holding out to this belief at one time.

When I started in this business, as a believer in competition, I was a great supporter of antitrust laws; I thought enforcing them was one of the few desirable things that the government could do to promote more competition. But as I watched what actually happened, I saw that, instead of promoting competition, antitrust laws tended to do exactly the opposite, because they tended, like so many government activities, to be taken over by the people they were supposed to regulate and control. And so over time I have gradually come to the conclusion that antitrust laws do far more harm than good and that we would be better off if we didn’t have them at all, if we could get rid of them. But we do have them.

The break up of the Apple/Google love fest is just one more example of why the real fear of anti-trust should be directed at the government itself. After all, highly regulated industries tend to have far more entrenched incumbents with much less competition and turnover (think energy, education and healthcare). We need more regulation of government not more government regulation…

…but what the hell do I know?