Suppose we are given a sequence of n points in the Euclidean plane, an
d our objective is to construct, on-line, a connected graph that conne
cts all of them, trying to minimize the total sum of lengths of its ed
ges. The points appear one at a time, and at each step the on-line alg
orithm must construct a connected graph that contains all current poin
ts by connecting the new point to the previously constructed graph. Th
is can be done by joining the new point (not necessarily by a straight
line) to any point of the previous graph (not necessarily one of the
given points). The performance of our algorithm is measured by its com
petitive ratio: the supremum, over all sequences of points, of the rat
io between the total length of the graph constructed by our algorithm
and the total length of the best Steiner tree that connects all the po
ints. There are known on-line algorithms whose competitive ratio is O(
log n) even for all metric spaces, but the only lower bound known is o
f [IW] for some contrived discrete metric space. Moreover, for the pla
ne, on-line algorithms could have been more powerful and achieve a bet
ter competitive ratio, and no nontrivial lower bounds for the best pos
sible competitive ratio were known. Here we prove an almost tight lowe
r bound of OMEGA(log n/log log n) for the competitive ratio of any on-
line algorithm. The lower bound holds for deterministic algorithms as
well as for randomized ones, and obviously holds in any Euclidean spac
e of dimension greater than 2 as well.