Big Tech monopolies should be broken up

What's this about?

People disagree about whether huge tech firms should split into smaller parts. The key question is when their power harms fair choice.

What supporters say

• Big tech firms gain strength when more people use their apps, sites, and tools.
• They collect huge amounts of data and can keep users inside one group of services.
• A court found that Google broke the law by keeping too much control over web search.
• Apple runs the App Store while also selling its own apps, which may hurt other app makers.

What critics say

• A company should not split up just because it is large or popular.
• Leaders need proof that a firm controls a key path and harms fair rivals.
• Claims against Amazon and Meta have not yet ended in final court rulings.
• Buying smaller firms does not always harm new ideas or fair rivalry.

The bottom line

The evidence does not support breaking up every big tech firm. Splits may help in special cases, when a firm controls a key gateway and competes with businesses that need it.

Big Tech companies should not be broken up simply because they are large. But structural separation or divestiture may be justified in specific cases where a platform has proven monopoly power, controls an essential gateway and competes against businesses that rely on it.

The case for

Digital markets can make market power unusually hard to challenge. Large platforms benefit from network effects, vast stores of data, economies of scale and services designed to keep users inside a single ecosystem. These advantages can help a dominant company remain dominant and use its position in one service to strengthen another. 1

There is also more than a theoretical concern about anticompetitive behavior. The US Department of Justice says a federal court found Google liable for unlawfully monopolizing the online-search and search-text-advertising markets. That finding gives the debate over stronger remedies a concrete legal basis, rather than relying only on Google’s large market share (see Figure 2). 2 By contrast, government cases against Amazon and Meta involve allegations of monopoly-maintenance practices and acquisitions aimed at removing threats; they are not final findings of liability.

The argument for a breakup is strongest when a company both sets the rules for a platform and competes with firms that depend on that platform. Apple’s App Store is one example: its control of app distribution, payment requirements and competing services can give it leverage over developers (see Figure 1). 3 Separating the platform operator from the businesses operating on it could remove the incentive to favor the company’s own products, rather than requiring regulators to police thousands of individual decisions.

Past acquisitions add to the case in some situations. Research cited by the OECD suggests that buying smaller, emerging or data-rich companies can sometimes weaken future competition and innovation, even though acquisition motives and outcomes vary widely. 4 If an acquisition has already eliminated a viable independent rival, tighter future merger review cannot restore it. Divestiture could therefore be a possible corrective tool, particularly where the acquired business might otherwise have become a meaningful competitor (see Figure 3).

The case against

Size alone is not proof of a harmful monopoly. Google’s worldwide share of search is very high, but that fact by itself cannot show whether its position reflects better products, exclusionary conduct, or both. Nor can it tell regulators what remedy would work best. 5

How a market is defined matters as well. Amazon may account for a large share of e-commerce, but a much smaller share when all retail sales are included. Such differences can substantially change an assessment of a company’s market power.

Breaking up a platform could also destroy real benefits. Digital services often depend on scale to match buyers and sellers, subsidize one side of a market, improve quality and support investment. Integration can make products easier to use and help free services deliver value to consumers. Some practices that appear exclusionary may, in certain circumstances, support quality or innovation. 6

A breakup would also be difficult to carry out. Officials would have to decide how to divide data, algorithms, employees, contracts and other assets, while preventing the separated businesses from coordinating or later reuniting. Scholars have proposed ways to draw these lines, but there is little direct evidence from completed large-scale digital breakups showing that they produce better outcomes than narrower remedies, such as access rules, interoperability requirements or limits on specific conduct. 7

The bottom line

The evidence supports a case-by-case approach, not a blanket order to break up Big Tech. There are serious competition concerns in some digital markets, and Google’s search case rests on a court finding, while the claims involving Amazon and Meta remain allegations in ongoing litigation.

Structural remedies are most defensible where durable or unlawful gatekeeper power has been shown in a clearly defined market; where the platform controls infrastructure needed by dependent rivals; and where less drastic measures cannot restore competition. Stronger merger enforcement should generally prevent problems before they arise, but divestiture can remain relevant when an earlier acquisition or integration has already removed a realistic alternative.

The central uncertainty is not whether some large platforms can wield harmful power. It is whether a particular breakup would improve consumer welfare more than targeted alternatives while preserving the efficiencies of integrated services. The overall conclusion is therefore qualified support for carefully targeted breakups, with lower confidence about the effects of any specific breakup plan.