The Tech Oligarchy That Isn’t: Big Tech’s Power Is Overstated
Concerns about the power of “big tech” continue to emerge on both sides of the aisle. Although attacks against Internet platforms became the centerpiece of the Biden administration’s antitrust policy, some high-profile cases—including the Google search case—were launched during the first Trump administration. Indeed, conservatives like Josh Hawley and Sohrab Ahmari have called big tech companies “tyrannical” and their leaders as forming an “oligarchy.” Joe Biden echoed these sentiments in his farewell address, warning that “Today, an oligarchy is taking shape in America,” driven by a “tech-industrial complex.” Despite the new Trump administration in place, antitrust enforcers like Federal Trade Commission (FTC) Chairman Andrew Ferguson and Assistant Attorney General nominee Gail Slater have signaled that a punitive focus on big tech will continue under their watch.
Contrary to these claims, big tech is not emblematic of an oligarchy. Unlike the vast economic control typically associated with oligarchs, The Economist estimates that big tech firms collectively comprise just over 3 percent of the U.S. economy. For comparison, in 1937, John D. Rockefeller’s estimated net worth was 1.5 percent of GDP by itself.
Moreover, the presence of tech leaders at Trump’s inauguration is not a sign of the industry’s power over government, but rather the opposite. They were supplicants “kissing the ring” of the new president. If big tech companies had successfully engaged in regulatory capture, they would not be so consistently targeted by both the Biden and Trump administrations. In fact, the FTC in the new Trump administration has already launched an inquiry into the nature of big tech’s power, specifically regarding the issues of censorship and de-platforming.
Critics of big tech on both the right and left view the “private power” of dominant technology firms as unassailable and protected by anticompetitive or otherwise suspect conduct. However, the alleged monopoly power of these companies is often overstated.
Take Microsoft, for example. Although once seen as invincible in the computing devices market, the company was overtaken by dynamic competition—eventually getting leapfrogged by the smartphone and internet revolutions. As MIT Management Professor Catherine Tucker has explained, “Microsoft no longer commands an impressive market share of computing devices by any definition.” While Microsoft has expanded into important new markets like cloud computing, it faces stiff competition from rivals like Google, Amazon, and many other firms in this space. And if Microsoft were truly a lazy monopolist, it wouldn’t be pushing the frontier in areas like quantum computing.
Apple has also been accused of monopoly status in the smartphone market. Yet, even the DOJ’s antitrust complaint against the company suggests that other firms hold competitive market shares—Google’s Android, for example, holds about 40 percent of the U.S. market and up to 70 percent globally. Some claim that Apple’s 30 percent commission on app sales is direct evidence of monopoly power, but this rate has remained constant despite ongoing innovation and increasing app market transactions over time, strongly suggesting that quality-adjusted prices have fallen significantly. Moreover, as some have noted, Apple’s App Store now reaches 5.2 million paid developers—an increase of over 374 percent in the last decade. Again, better quality and growing output are hardly signs of lazy monopolists.
Neither is Google the monopolist it’s often portrayed to be. To be sure, although Judge Mehta ruled otherwise in the DOJ’s search case, his reasoning was flawed in many ways. First, it neglected that Google competes with several rivals in specialized forms of search, such as Amazon and Yelp. The opinion also discounted the dynamic competitive pressure from emerging technologies like AI. And, of course, it ignored the reality that Google’s apps, including search, are free to consumers, with low switching costs for those who prefer a different search engine. In other words, while being the default matters, offering the best services is far more important—that’s the real reason for Google’s success.
Similarly, Meta is undeserving of the monopoly appellation. Its family of social media platforms—Facebook, Instagram, and WhatsApp—compete with rival alternatives such as TikTok, X (Twitter), Reddit, YouTube, Bluesky, and others in the market for users’ attention. The FTC’s narrowly defined “Personal Social Networking” (PSN) services market definition, as ITIF has noted, is both artificial and economically incoherent. What’s more, unlike a price-gouging monopolist, Meta offers its core services for free, continuously innovates, and improves quality to maintain its market position.
Finally, Amazon has also faced monopoly accusations. The FTC’s complaint against the company uses general e-commerce as a relevant market, but this definition is much too narrow and, among other things, ignores the competition Amazon faces from specialized retailers, such as Best Buy and Staples. More generally, e-commerce accounts for a small share of overall retail; 80 percent of sales still take place in brick-and-mortar stores. Furthermore, rivals like Walmart—which is much larger than Amazon—have significantly expanded their e-commerce presence, while Chinese platforms like Temu are also gaining ground.
At its core, big tech in the U.S. is not a collusive oligarchy but a fiercely competitive industry that benefits consumers. Indeed, rather than enjoy the life of the comfortable monopolist, dynamic and Schumpeterian competition continues to check the power of these firms, including by creating new tech giants. Most recently, a new wave of innovation buoyed by developments in artificial intelligence has made Nvidia the second most valuable company in the world. And rather than capturing the government, big tech has faced continuous scrutiny for over a decade, regardless of which political party occupies the White House—a trend already persisting under the new Trump administration.
