The Unix operating system was created at Bell Labs in 1969. Today, it rules the world. Both Android and iOS are flavors of Unix. So is MacOS. So is GNU/Linux in all its flavors, like Ubuntu and Debian. So is Chrome OS. Virtually every “smart” gadget you own is running some flavor of Unix, from the no-name programmable Christmas lights you put up in December to the smart light-bulb and smart-speaker in your living room.
Over the years, many companies have marketed versions of Unix: Apple and Microsoft, HP and IBM, Silicon Graphics and Digital. Some of the most popular Unixes that came from universities (like BSD, from UC Berkeley) and from hobbyists (the Linux kernel was created by a 22-year-old hobbyist named Linus Torvalds).
But there’s one company that never marketed Unix: AT&T, the company that paid for Unix’s development. They never got into the Unix business.
In 1949, Harry Truman’s Department of Justice launched an antitrust complaint against AT&T, alleging that the company had engaged in anticompetitive conduct to secure a monopoly for its hardware division, Western Electric.
But when the US entered the Korean War, AT&T was able to secure a break by citing its centrality to the US military. With the Pentagon fighting to keep AT&T intact, the Eisenhower administration let AT&T off the hook: in 1956 the US dropped its lawsuit in exchange for a “consent decree,” through which AT&T promised to get out of the general electronics business and to share its patents and technical documentation with existing and new competitors.
Despite the consent decree, AT&T continued to fund a large and rollicking research and development department, the Bell Telephone Laboratories (BTL) in New Jersey. BTL was home to some of computing history’s most storied pioneers, including Ken Thompson and Dennis Ritchie, the principal inventors of Unix, who basically created the project out of intellectual curiosity.
Thanks to the consent decree, AT&T couldn’t do much with Unix, and so it remained an internal project until Ken Thompson gave a talk on his work at a 1973 Association for Computing Machinery conference. His paper stirred interest from academic and commercial computer science, and AT&T’s lawyers decided that the consent decree meant that they couldn’t start a new business based on Unix.
Instead, they offered the operating system under the consent decree’s terms: for a modest sum, anyone could get the Unix source code and adapt it for both commercial and noncommercial use. Soon, a thriving community of Unix hackers—many working for competing firms!—were quietly swapping patches and improvements, and these made their way back to the Unix maintainers at AT&T, who found ways to smuggle them back out in both official and unofficial ways (some AT&T engineers would leave data-tapes in secluded spots, then make anonymous calls to Unix hobbyists, letting them know where the tapes could be found!).
This legendary culture of knowledge sharing and collective effort presaged the free software/open source movement, but just as importantly, it is an example of adversarial interoperability, the process of making new products that can connect to, or add value to, incumbent products or services—without the consent of the incumbent system’s makers.
AT&T was a monopolist with a well-earned reputation for ruthlessness in crushing its competitors. Without the consent decree, AT&T would never have allowed this Unix culture to flourish. Even with the consent decree, the company did its best to undermine its own engineers who maintained Unix at Bell Labs. It was only because these engineers were more loyal to technical excellence than they were to their employers’ spiteful directives that Unix was able to make so much progress, so quickly.
The story of Unix is a case study in the role that adversarial interoperability plays in competition regulation. The DoJ’s consent decree didn’t merely ban AT&T from certain monopolistic conduct—it set up rules and incentives that encouraged AT&T to share its technical documentation, and, just as importantly, it stripped AT&T of the legal weapons it needed to stop competitors from making products that interoperated with its own.
Today’s tech giants have a whole new arsenal of anti-competitive weapons: between anti-circumvention laws, patents and abusive terms of service, Big Tech has powerful legal tools that let them decide exactly who may compete with them, and how (and they’re making new ones all the time).
AT&T had everything going for it: as a regulated vertical monopoly with massive cash reserves, allies in the Pentagon, and the ultimate “network effect” advantage, the company seemed unassailable. But the mere act of allowing competitors into one of its markets kickstarted a computing revolution that, decades later, is still underway. From your phone to your laptop to your car to your lightbulb, you are still enjoying the fruits of that long-ago 1956 consent decree.