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The author is a professor at the Massachusetts Institute of Technology and was awarded the 2024 Nobel Prize in Economic Sciences.
In 1913, Woodrow Wilson warned: “If monopoly continues, monopoly always sits at the helm of the government. We don’t look at monopoly restraint itself.” A century later, his words feel more urgent than ever before. Silicon Valley tech giants dominate the market through aggressive acquisitions, lobbying and systematic erosion of competition, but are embedded in government machinery.
This accumulation of power is no coincidence. It is the product of decades of antitrust failure. Regulators have repeatedly allowed tech giants to win markets, buy competitors and restructure their industries. Once a hub of innovation, the sector now hosts some of the most powerful companies in history. Before the dissolution, standard oil market capitalisation was around $33 billion in today’s dollars. This is worth Google, Amazon and Apple.
Monopoly is most problematic when it impairs the ability to communicate with each other. Dissonance in social media platforms like X and Facebook is a deeper symptom of problem. A stable dent from our independent news. At the heart of this decline is Google. By controlling the $876 million (and growing) digital advertising ecosystem, Google transforms online ads into bottlenecks, bringing profits while starving revenue news organizations. Former Google executives compared its advantage with Citibank or Goldman Sachs, which own the New York Stock Exchange. This is an arrangement that you wouldn’t think of anywhere else.
The results are clear. As social media becomes more toxic and weaponized by extremists, trustworthy news continues to wither. Publishers that rely on advertising to maintain independent reporting compete in a market where Google sets terms and gains the largest share of profits. The impact resonates throughout society. Consumers are burdened with higher costs, reducing competition erosion and democratic accountability.
But the tide is turning. Last week, after last year’s ruling that Google holds a monopoly in the US search market, a US court ruled that it also holds a monopoly in areas where the company generates enormous profits. Digital advertising. U.S. District Judge Leonie Brinkema said: “Google is deliberately engaged in a series of anti-competitive acts to gain and maintain monopolies in the Publisher Ad Server and Ad Exchange markets, and to acquire and maintain monopolies for Open-Web Display Ads.”
Meanwhile, the EU is preparing to dominate parallel cases of Google’s advantage in advertising technology. These transatlantic efforts present rare opportunities to reinvigorate antitrust laws. Europe has long recognized the need to strengthen its own high-tech sector and reduce its dependence on Silicon Valley. However, this ambition cannot be realized unless it addresses exclusive bottlenecks.
Silicon Valley defenders have argued that disbanding companies slows innovation, but monopoly is bad for innovation. When telecommunications giant AT&T Monopoly was forced to license its patents in all corners in 1956 and eventually disbanded, it helped drive the digital revolution.
Disbanding alone is not enough. Reform needs to benefit society, not technology oligarchs, and empower citizens rather than exploiting data. My fellow MIT economist Simon Johnson and I propose a 50% levy on digital ad revenue of over $500 million per year to curb control of Google and Meta and create space for our competitors. While the EU takes action early in its Digital Markets and Digital Services Act, the Google Ad Tech case offers the opportunity to set a global precedent for meaningful antitrust enforcement and competition beyond fines.
Despite the Trump administration’s support for parts of the tech ecosystem, many conservatives remain critical of the big technology. US Vice President JD Vance praised Lina Kahn, former chairman of the US Federal Trade Commission, for reinvigorating US antitrust enforcement. This latest ruling on Google shows that there could be durable, bipartisan support for strong antitrust laws, along with aggressive testing on meta.
Europe should finish work now. For too long, Silicon Valley has decided on the rules of the internet, shaping markets to provide its own benefits, competition is declining, and inequality is rising. By setting up a course to disband Google’s ad monopoly, Europe can demonstrate that democratic institutions, not monopoly, should shape our digital future.
