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Why Were Facebook and Google Allowed to Get So Big?: QuickTake

Facebook Inc. Campus As Profit Beats Wall Street Forecasts
Photographer: David Paul Morris/Bloomberg

The rise of global technology superstars like Amazon, Apple, Facebook and Google created new challenges for the competition watchdogs who enforce the nation’s antitrust laws. Those companies dominate markets in e-books and smartphones, search advertising and social-media traffic, spurring a global debate over whether it’s time to rein in such winner-take-all companies. The U.S. has largely been hands off, but that may be changing.

They’re powerful, for sure. Google and Facebook Inc. together control almost 60 percent of digital ad revenue in the U.S. and 64 percent of mobile ad revenue, according to eMarketer. Apple Inc. has about 45 percent of the U.S. smartphone market. About 47 percent of all U.S. e-commerce sales go through Inc. But under modern antitrust enforcement, those percentages alone aren’t enough to alarm regulators in the U.S., which long ago stopped equating big with bad. (For comparison’s sake, Standard Oil’s market share got as high as 88 percent late in the 19th century.) What’s illegal is for a monopoly to abuse its market power to prevent rivals from threatening its dominance. Federal courts ruled Microsoft Corp. did so in the 1990s.