The Web’s New Monopolists

[Commentary] What companies like Twitter, Square, and Facebook—not to mention Google, Amazon, and Apple—aspire to, and in some cases have achieved, is a status similar to that of traditional utilities like Ma Bell. They attempt to position themselves such that customers can’t get around them, or can’t afford to leave them. And when they succeed, they start appearing to some customers, would-be competitors, and regulators like scary monopolies that somebody needs to do something about.

What is new is that the path from looking for an edge to being attacked as a monopoly has gotten a lot shorter—and that gaining a monopoly seems such a plausible goal within some of the fastest-growing parts of the economy. Standard Oil had been in business for 36 years when the Justice Department sued it for antitrust violations; AT&T for 97. By comparison, Microsoft was just 15 when federal regulators started looking into its business practices, 23 when Justice sued. Google, a mere 14 years old. Today’s technology entrepreneurs are well aware of the tight link between profit and monopoly. Few are as open about it as the PayPal co-founder and early Facebook investor Peter Thiel, who has described monopoly as the natural goal of any smart tech entrepreneur. But everybody gets the basic idea. “There’s a joke in Silicon Valley,” says the UC Berkeley economist Carl Shapiro: “ ‘You know you’ve really made it when you’ve got antitrust problems.’ That’s the sign of success.”