Article last updated 30 September 2025.
History doesn’t repeat, but it often rhymes. We are fast entering a time of intense scrutiny for the US technology giants. For the past couple of decades, the titans of social media and the internet have created a digital world that has radically altered how we communicate, transact and live. Only 30 years ago, a 15-minute phone call to the other side of the world could cost the better part of a day’s wages. Now you can video call anyone, anywhere for nothing.
We see parallels with earlier life-changing technologies and wonder whether societies and governments will respond as they have in the past.
Radical new technology has an insatiable appetite for capital. Billions have been borrowed and tens of billions more raised in equity to create the IT companies that dominate the US stock market and virtually control the Western web (figure 4). Similarly, money is pouring into companies that are developing self-driving cars and finding innovative ways to use the mind-boggling amount of data this new digital age is creating. This is little different to all the other times in human history when pioneers have bet the house on a completely new thing.
Figure 4: Shaking off a scandal
Facebook's share price swiftly recovered from the personal data controversy earlier this year.
Source: Datastream and Rathbones.
From visionaries to villains
In the 19th century, Andrew Carnegie could see that the modern world would be made of steel. Through innovation in the foundry he both drastically cut the cost of producing the metal and improved its strength and versatility. In 1867, he tendered and won the contract to supply steel for the world’s first great alloy bridge: the Eads Bridge across the Mississippi River that connected St Louis, Missouri, and East St Louis, Illinois, when it was completed seven years later. It heralded more than 150 years of steel-based construction that included railway lines, shipping, cars and skyscrapers.
Carnegie built his empire of steel into a colossus that began setting prices, rather than taking them as a commodity producer should. By 1900, he was lobbying Congress stridently to ensure tariffs on overseas competition remained in place, protecting millions of dollars of extra profit for himself. In 1901, Carnegie’s company was swallowed up in a huge agglomeration controlled by John Pierpont (JP) Morgan and Elbert Gary.
US Steel, as it was called, commanded two-thirds of the American steel market when it was formed. And yet, anti-trust cases against it floundered. Because of its cautious approach and lack of research and development, US Steel’s market share had slumped to 50% within six years. A century later, that had fallen further to 8%.
John D Rockefeller, the founder of Standard Oil, realised just how much latent power resided in the by-product of kerosene. His company focused on making petroleum, tar, paint and lubricants, the grease for the 20th century. By hook and crook, the company realised that incredible scale was needed to lower costs enough to supply these modern materials to the everyman, and so embarked on a spree of takeovers leaving it with 90% of the American market. It figured it could boost its profits and reinforce its power by also building and buying the pipes to get its products to market.
Standard Oil abused its position and treated consumers, suppliers and lawmakers with contempt (and occasional bribes). It was broken up by the government in 1911 after taking its case all the way to the Supreme Court (figure 5). Still, Mr Rockefeller’s empire turned out to be more lucrative in pieces than in sum. These smaller companies, in which he held large stakes, evolved into Exxon, Mobil and Chevron. The growth in these businesses ended up easily eclipsing the value of Standard Oil. You could say it was win-win: Mr Rockefeller got richer and America got a free and competitive oil market.
So how do these great private endeavours, which vastly improve human existence, become despised or mistrusted? Why is it that most — if not all — are broken up, stiffly regulated or generally attacked by governments?
As with all human affairs, it’s impossible to say for certain what causes the lauded pioneer of today to become the avaricious villain of tomorrow in society’s eye. However, if the company has become particularly rapacious, that tends to have a strong effect. The great trust-busting of the pre-war 1900s was driven by rising unease about the methods of the great railway, oil, steel and electric monopolies. Most of them had been bought or muscled away from their original founders to be run for the benefit of their shareholders.
These new owners focused on improving profitability, typically ditching blue-sky research and forging sharper deals with suppliers and staff. They bought up — or squeezed out — potential competition as soon as it appeared and dominated their new industries with overwhelming market share that gave them unrivalled pricing power. You could argue this sounds a little like the large tech giants of today: shelling out hundreds of millions for any potential rival while it’s still in its infancy. However, most still spend billions on research and development too.
In the 1900s, public outcry usually rose when companies made extortionate profits at the same time as they were giving workers and customers a poor deal. Typically, it was upsetting customers that led to government action. Similarly, the backlash against today’s media giants started when users felt they were getting a bad deal; when they realised how much power the companies commanded over their lives and even their moods. On the whole, the public was more interested in having cheap and plentiful products and services than worrying about the treatment of out-of-sight workers.
Figure 5: Breaking up Standard Oil in 1911
Standard Oil was broken up into a series of regional companies in 1911, which have since evolved into today's global corporations.
Source: Datastream and Rathbones.
When the new becomes the norm
There is a clue here for another reason why a new technology attracts the regulatory control of the state. There’s a tipping point where a luxurious new gadget or service becomes so ubiquitous that it becomes a de facto right. There was a time — not so long ago — when indoor plumbing or electricity were beyond the reach of many Americans and Britons. Now it’s unthinkable to let a home or office be without them. Perhaps it’s enlightening to think that you should now add internet access to that list of required amenities.
Usually, at this point regulation tends to be a good way to deliver this technology that society has deemed a right of all to those who would usually miss out under a private monopoly. In 1930s America, electricity was enjoyed by cities and large industrial businesses only — farmers were too isolated to make it worthwhile for the private companies to service them. But the state soon mandated that they be served, creating a boost to productivity that made America the bread basket of the world.
Society had dictated that electricity was the right of everyone, not a new-fangled technology that belonged to the person who toiled long and hard to create it. You can hear the chime echoing through history: society has now made the same argument about the internet.
Governments on both sides of the Atlantic (in fact, around the world) are spending trillions of dollars to extend internet access to virtually all their citizens. Something that was an esoteric luxury just a few decades ago, is now considered the equal of running water. You could argue that gives them a greater interest in how these networks are used and who profits from them.
The exact point where “fairness” says ownership of a technology passes from private hands to the public is unclear. But a safe guess is that it happens when most people in the world depend on something as a daily necessity. If at that point the private purveyor is price-gouging, abusing its position or simply unwilling to finish the proliferation of its service to all parts of society, then it seems highly likely that lawmakers will take action.
This is the first in a three-part series on how an anti-trust crusade could impact Silicon Valley. Click here for the next chapter which explores why some companies are broken up whole others stay whole.