Growing numbers of legislators and policy experts charge that tech firms such as Amazon, Google, Facebook, Apple, and Microsoft are “monopolies” with the potential power to harm consumers. Many economists, lawyers, and politicians say that economic features of these companies’ product markets — such as network effects, economies of scale, data collection, tying of complementary goods, or operating online marketplaces — create unfair competition or insurmountable entry barriers for new competitors. They conclude that “forward-looking” antitrust policy is needed to prevent persistent market dominance from undermining consumer welfare. Economist Joseph Schumpeter warned against such monopoly fatalism. He recognized that the most important long-term competitive pressure comes from new products cannibalizing incumbent businesses through marked product quality improvements. An antitrust policy that second-guesses the future based on the present ignores this unpredictable margin of competition, to the detriment of consumers. Over the past century, large businesses operating in industries similar to today’s tech firms were regularly labeled as unassailable monopolies. Retailers, social networks, mobile phone producers, camera manufacturers, and internet browser and search engine companies have all been thought likely to dominate their sectors perpetually, based on similar economic reasoning to that heard about tech companies today.

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