A monopoly is any firm that has a dominant share in the market for a given good or service (legal definitions range between 40% – 70%) resulting in power over that market. That is the beginning and the end of the definition. There is no further requirement that the firm be evil, gigantic, have caused consumer harm, be long-lasting, or anything else.
What Adam is thinking about is what a lawyer would call an “actionable” or “unlawful” monopoly; or perhaps a monopoly that violates s. 2 of the Sherman Act. But I never said in the Wall Street Journal that the Internet monopolies are unlawful. The point was that these are firms in the early age of monopoly, indeed in a kind of Golden Age.
To be more specific, by the economic and legal definition, in one or more markets, Google, Apple, Facebook, and eBay are pretty clearly monopolists. Google has market power over search. Apple, portable music players and iTunes downloads. Facebook, social media sites. eBay, online auctions.
Amazon and Twitter are closer cases; it all depends on market definition. Twitter’s market may be small, but the size of the market isn’t the point.
The key is understanding — and this is where a law degree can come in handy — that monopoly by itself is not unlawful in the United States. It is abuse of monopoly that is actionable.
I post this corrective because, for example, Techdirt has become confused by Adam’s post, writing that “domination of a market, by itself, does not create a monopoly.” Actually, Techdirt, it does. That is exactly the definition of monopoly.
Finally, whether the monopoly may disappear tomorrow is an important question. But it doesn’t mean there isn’t a monopoly right now.
One more corrective. Adam says the piece “completely ignores the competition taking place among many of these giants.”
From the Wall Street Journal: “There are digital Kashmirs, disputed territories that remain anyone’s game, like digital publishing. But the dominions of major firms have enjoyed surprisingly secure borders over the last five years, their core markets secure. Microsoft’s Bing, launched last year by a giant with $40 billion in cash on hand, has captured a mere 3.25% of query volume (Google retains 83%). … Though the border incursions do keep dominant firms on their toes, they have largely foundered as business ventures.”
End of corrective.