Big Tech’s online empires will one day fall

Linda J. Dodson

In the 1950s, IBM was accused of holding a monopoly over punch-card processing machines, resulting in an agreement with the US government that opened up the market in 1956. In the next decade, computing had moved on to mainframes, and the company’s 70pc share of the market led to a 13-year legal battle with Washington that was dubbed “the antitrust division’s Vietnam.”

Today, IBM has a much higher share of the mainframe computer market, but few are concerned about its monopoly, because mainframes are no longer at the cutting edge. 

To an extent, the same thing has happened to Microsoft, which is still a giant but is not nearly under the same competition pressure as Facebook, Amazon, Apple or Google. The US Justice Department’s case against the company, over its bundling of Internet Explorer with Windows, seemed vital at the time – the existence of one monopoly was more worrying than the multiple ones we have today. Today, in which almost everybody downloads Google’s Chrome browser, it seems almost quaint, although Windows still runs on most of the world’s PCs.

The reason we don’t worry about IBM or Microsoft as much is not because they have lost their respective monopolies; it is because the markets they control no longer seem so vital. Mainframes were supplanted by minicomputers and PCs by the web and smartphones. 

The downfall of Apple, Amazon, Facebook and Google, when it happens, is likely to follow a similar trajectory. No search engine will replace Google, but one day search engines will not be as central to our lives as they are today. It seems hard to imagine today, but the 1950s trustbusters might have thought the same about the punch card industry.

There are two rejoinders to this idea. One is that today’s tech giants are sufficiently paranoid, having seen what happened to the likes of IBM and Microsoft, to be unlikely to follow the same fate. Facebook successfully spotted the rise of both picture-based sharing and private messaging, and acquired Instagram and WhatsApp to counter these trends. This does a disservice to prior monopolies, which were just as anxious and ruthless as today’s. Eventually something came along they simply could not counter.

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