These incidents may appear isolated, but they fit into a bigger picture. Like the oil barons at the turn of the 20th century, the data barons are determined to extract as much as possible of a resource that’s central to the economy of their time. The more information they can get to feed the algorithms that power their ad-targeting machines and product-recommendation engines, the better. In the absence of serious competition or (until Europe’s recently introduced General Data Protection Regulation) serious legal constraints on the handling of personal data, they are going to keep undermining privacy in their push to know as much about their users as they possibly can.

Their dominance is allowing them to play a dangerous and outsize role in our politics and culture. The web giants have helped undermine confidence in democracy by underestimating the threat posed by Russian trolls, Macedonian fake-news farms, and other purveyors of propaganda. Zuckerberg at first dismissed claims that disinformation on Facebook had influenced the 2016 election as “pretty crazy.” But Facebook itself now says that between June 2015 and August 2017, as many as 126 million people may have seen content on the network that was created by a Russian troll farm.

Facebook and Google have built new tools for identifying disinformation and vetting advertisers, but it’s not yet clear how effective these will be. Even with news that is not clearly fake, researchers have shown that Facebook’s content-recommendation algorithms tend to serve up stuff that reinforces people’s prejudices. This might be happening even if the social-media industry were more fragmented. But the immense reach of platforms like Facebook has undoubtedly magnified the impact: according to a Pew Research Center study published last year, 45 percent of American adults now get at least some of their news from Facebook.

Then there’s the considerable market power they’ve built up, which has created turmoil in some industries and stifled innovation in the areas they dominate. Facebook and Google now amount to a digital advertising duopoly: they pocket three out of every four dollars spent on digital advertising in America, and they control 84 percent of global spending on such ads, excluding China. Google controls almost 80 percent of search advertising revenue in America and has a huge share in many other countries.

Amazon, meanwhile, accounts for over 83 percent of e-book sales in the US and nearly 90 percent of online print sales. The companies’ dominance has plunged the media and book publishing industries into turmoil: between 2006 and 2016, ad spending in US newspapers fell by almost two-thirds, and much of that money ended up in Facebook’s and Google’s hands. Amazon has also become a powerful online gatekeeper for many other kinds of online sales, and it handled around 44 percent of all e-commerce transactions in the US last year.

Amazon accounts for about 85% of US print book sales.

Their platforms give the data barons an unprecedented amount of control over what we see, read, and buy. Jonathan Taplin, the director emeritus of the Annenberg Innovation Lab at the University of Southern California, argues in Move Fast and Break Things, his book about the power of the internet giants, that rebel artists have long had to deal with “suits” who control distribution of their work. But the rise of companies like Facebook and Amazon has increased the stakes immeasurably. “The concentration of profits in the making of arts and news,” he writes, “has made more than just artists and journalists vulnerable: it has made all those who seek to profit from the free exchange of ideas and culture vulnerable to the power of a small group of … patrons.”

Their platforms give the data barons an unprecedented amount of control over what we see, read, and buy.

The data barons like to say that claims about their dominance are overblown. During his congressional testimony, Facebook’s Zuckerberg noted that the average American uses eight different communication and social apps. What he neglected to mention was that the social network owns several of the most popular ones, like its Messenger service and Instagram. Google argues that companies like Amazon and Facebook effectively compete with it in search by helping people find information, but its real competitors are dedicated search engines like DuckDuckGo and Microsoft’s Bing, which have relatively small market shares. Amazon can point to the fact that there are lots of companies offering e-commerce services, and that it competes with brick-and-mortar retailers, but its dominance in areas like book publishing is impossible to ignore.

The data barons’ power makes startups extremely reluctant to challenge them, and makes venture capitalists wary of backing the few mavericks that do. Speaking at an antitrust conference earlier this year, Albert Wenger, a managing partner at Union Square Ventures, said that one of founders’ top priorities these days is to avoid the internet giants’ “kill zones,” the areas in which they are capable of crushing any competition. And those zones are only going to grow as the web companies plunge into more businesses. Breakthrough ideas often come from startups rather than from large firms, so this could be depriving us of important innovations.

Special effects

It wasn’t supposed to be this way. By lowering barriers to entry and making it easy for consumers to switch services with a few clicks of a mouse, the internet in its early days seemed designed to ensure that digital empires would promptly be besieged by fleets of rebel startups. So why didn’t that happen?

They’ve become so dominant by developing products and services that many of us want to use.

Part of the answer involves one of Silicon Valley’s favorite buzz phrases: “network effects.” Many online products and services become more valuable as more people use them. Buyers flock to Amazon because they know they’ll find lots of sellers—and hence lots of choices; people join Facebook because their friends are there. The US internet giants have been particularly skilled at harnessing these effects, as have Chinese firms like Alibaba and Tencent, which have become similarly dominant in their home market.

Thanks to network effects, Facebook, Google, and Amazon have been able to harvest oceans of data, which they use to continually refine their products and services. That, in turn, wins them even more users, which yields even more data, and so on. When other businesses show signs of succeeding in their markets, the data barons have often swooped in to buy them using their high-priced shares or vast cash reserves. Facebook bought Instagram and WhatsApp; Amazon picked up Zappos and Quidsi, two fast-growing online retailers; and Google acquired Waze, which was on the road to becoming a serious competitor to Google Maps. Sometimes consumers don't even notice these deals: after the Cambridge Analytica scandal broke, some Facebook users posted that they intended to move to Instagram in protest, clearly unaware it belonged to Facebook.

The reason the data barons have been so aggressive is that they are all too aware of how network effects can be turned against them by rivals and used to threaten their data-driven monopoly power.

Why haven’t antitrust regulators blocked deals to promote competition? It’s mainly because of a change in US antitrust philosophy in the 1980s, inspired by neoclassical economists and legal scholars at the University of Chicago. Before the shift, antitrust enforcers were wary of any deals that reinforced a company’s dominant position. After it, they became more tolerant of such combinations, as long as prices for consumers didn’t rise. This was just fine with internet companies, since most of their services were free anyway. Critics say trustbusters exercised too little scrutiny. “Just because the web companies offer products for free doesn’t mean they should get a free pass,” says Jonathan Kanter, an antitrust lawyer at Paul Weiss.

When these companies were acquired by the data barons:

Move fast and challenge things

Another reason antitrust officials have struggled with the internet giants’ power is that they haven’t really appreciated how network effects can breed dominant market positions. At least Europe’s watchdogs have been tougher on anticompetitive behavior. Last year the European Union’s antitrust authority fined Google 2.4 billion euros ($2.7 billion) for unfairly favoring its own price--comparison shopping service in search results, depriving rivals of traffic. (The firm says it did nothing wrong and is appealing the ruling in court.) The EU is also investigating claims from rivals that Google uses its Android mobile operating system and AdSense advertising service to unfairly suppress competition.

In the US, the big web companies had lobbying clout and close links to the Obama administration, which may have given them an easier ride. But their standing with the government could be about to change: Steven Mnuchin, the US Treasury secretary, has urged the Department of Justice to take a hard look at the market power of big tech firms, and Joseph Simons, the new chairman of the Federal Trade Commission, which also has antitrust powers, said in his Senate confirmation hearing that he’d watch “big and influential” companies in Silicon Valley carefully. “I’m very optimistic that by the end of the year we’ll have a major investigation or two out there,” predicts Luther Lowe, the head of public policy at Yelp, a service that collects local reviews about things like restaurants and repair shops. Yelp has been locked in a long-running war of words with Google, which it says unfairly favors its own reviews in search results. Google rejects the charge.

If Lowe is right, the big internet firms could end up spending more time in American courts. But thanks to their vast wealth, fining them for any transgressions won’t diminish their power.

One radical solution would be to break them up, just as the US government splintered the dominant Standard Oil monopoly in the early 1900s. Some progressive advocacy groups in the US have been running online campaigns with slogans like “Facebook has too much power over our lives and democracy. It's time for us to take that power back,” and calling on the FTC to force the social network to sell Instagram, WhatsApp, and Messenger to create competition.