Andrey Mir writes that antitrust scholarship and enforcement seeking to break up platform monopolies overlook the benefits that these platforms provide because they are monopolies. He says the community must keep this in mind as it seeks to alleviate harms that any monopoly incurs to the economy.
This article is based in part on conversations from the 2025 Stigler Center Antitrust and Competition Conference: Economic Concentration and the Marketplace of Ideas. You can read the other articles part of these conversations here.
Traditionally, monopoly is viewed as a threat to the market economy. It is blamed for stifling competition, driving up prices, lowering quality, limiting consumer choice, blocking new entrants, and concentrating economic and often political power in too few hands.
However, classical political economy, and most contemporary competition literature, misses the fact that the monopolistic tendency of digital platforms is driven by users who benefit from them. Recognizing this requires a media ecology perspective, which reveals exactly what kind of service a platform provides to its users.
In his 2010 book Cognitive Surplus, media theorist Clay Shirky suggests an illustration of monopolistic platform benefits. Imagine you need to carpool at a certain time to a certain destination. Digital media offer a great service for this: carpooling platforms (think something akin to UberPool or Lyft Line.). But if you make 20 attempts to find a travel companion and succeed only five times, the platform fails, and you won’t use it. On the contrary, if 20 attempts give you, say, 16 matches, the platform works—it provides the requested service.
When can the platform do this? When it connects all the drivers and riders in the area—when it has a monopoly in this niche. If all drivers and riders are connected and seek to join each other on a single platform, all possible matches will happen, and all their ride-sharing needs will be met.
This phenomenon is called the network effect: connected people provide services to each other by virtue of their connections. The network effect has a mathematical expression in the so-called Metcalfe’s Law: the value of a network is proportional to the square of the number of networked users. In other words, the more users that participate, the more connections they form, and the more each of them benefits from those connections.
The platform economy created a new form of value that has nothing to do with exchange value or use value. The value of a platform lies in its reach—the number of connections it enables. Curiously, this value even disregards the traditional concept of a commodity. For example, with sufficient reach, a platform user can sell even a “nothing.” In 2014, the funk band Vulfpeck from Ann Arbor, Michigan, posted a new album on Spotify titled Sleepify, which contained ten tracks of pure silence. They asked fans to stream the songs on a loop, allowing the band to collect royalties of half a cent per stream to crowdfund an upcoming free concert tour. Their fans responded enthusiastically, and the story went viral. Within a month, the blank tracks were played over five million times, earning the band about $20,000. The network effect provided by Spotify allowed Vulfpeck to reach a sufficient number of fans—connectivity itself produced value. (Spotify tolerated the gambit for a while, then took the album down.)
No wonder all actors in the digital economy seek to build sufficient reach—readership, viewership, followership. It is a convertible value for achieving any social, political, or commercial goals, including selling “nothing.”
The personal reach of each user can be active or passive. Active reach is represented by the social graph: the user’s direct connections. Our friends and friends of friends are potential addressees we can reach at will. Passive reach refers to a user’s potential to be included in viral processes through his or her friends. It depends not only on the user’s social graph but also on the size of the entire connected community—the platform itself. Greater viral stories involve more people who spread them, making them even greater. Major events occur on major platforms, and every user has the opportunity to join and become part of a larger whole.
Never before have humans been able to become part of such a massive crowd, instantly gathered around the most “significant” viral events. Marshall McLuhan coined the term “Global Village” for humankind synchronized by television; social media created “Global Villages” on steroids.
Being part of a community is part of the survival strategy of social animals; that’s why it’s supported by bursts of hormonal cocktails containing oxytocin and dopamine. We feel elated when joining a party or a crowd. Digital media greatly amplify this drive for community by removing any time–space limitations on joining crowds of any size. In our rush to join others, we perform the “labor of swarming” for one another, creating swarms—viral epidemics—around various events and attracting each other even more.
The network effect at such speed and scale was simply impossible in the pre-digital world, where the potential for connection was limited by time–space constraints and social barriers. According to anthropologist Robin Dunbar, the human brain can comfortably maintain 150 stable relationships—this is the size of our physical network. Digital media have overridden Dunbar’s number. They allow us to technically maintain hundreds or even thousands of connections, assaulting our mental integrity but enabling global connectivity and boosting the networking potential for every user.
So, joining larger swarms is a natural—even physiological—impulse. With a sufficient number of connections, the network effect comes into effect. The larger the swarm, the more matches it provides: the more, the merrier. The quality of the network effect grows with the growth of its quantitative characteristics. Therefore, platforms hosting human connections naturally tend toward monopolism, which is beneficial for users—regardless of the capitalist greed of the platforms’ overlords (though they surely don’t mind).
The ideal platform is a monopolistic platform that gathers all users. Then all possible matches between them become inevitable. In terms of connectivity—which is precisely the purpose and condition of the platform economy—we would benefit most from a single eBay, a single LinkedIn, a single Facebook, a single Tinder, and so on.
Hence, the thesis is: the network effect not only drives platforms toward monopolies but also makes platform monopolies beneficial for users. This thesis, however, comes with some restrictions and reservations.
Monopoly-limiting factors
– Niche specialization. New niches emerge, splitting monopolistic platforms. For example, Bluesky created a niche based on political preferences, allowing progressives to abandon X/Twitter.
– Generational shift. New generations of users emerge; likewise, new generations of digital features appear—both creating opportunities for new platforms, as exemplified by MySpace–Facebook or Instagram–TikTok. However, within a niche, just as within generational waves of users or features, a platform still strives for monopolization.
Monopoly-amplifying factor
Any platform aims to capture all user activity, either by introducing new features or by acquiring smaller platforms that offer them. Meta/Facebook is an exemplar of this behavior. In the past, it launched Facebook Marketplace and Threads to compete with Craigslist and X and acquired Instagram and WhatsApp. In fact, a universal monopolistic platform can be extremely beneficial for users, as it creates a complete ecosystem to meet all digital needs: socializing, vanity-driven self-expression, e-shopping, dating, doing business, and accessing financial or government services. On such a platform, you don’t need to remember multiple passwords, adapt to different designs, or transfer data and connections for new tasks. So far, the Chinese super app WeChat has come closest to achieving this level of ecosystem integration.
Platform monopoly risks
– Global glitches. Technical failures can lead to catastrophic disruptions, similar to the 2003 Northeast power blackout caused by a software bug, which affected tens of millions of people. As our lives become ever more dependent on digital services, the risks and consequences of technical failure grow accordingly.
– Abuse of monopolistic power. This classical risk of monopoly only intensifies in the digital environment. Economic, political, and policy abuses of monopolistic power could theoretically be checked by regulation—but regulating platforms introduces its own political risks, as illustrated by the Twitter Files.
Regulatory risks
– Abuse of regulation. As the platform economy generates immense power, regulating platforms effectively transfers that power to the regulator. Platforms have become new gatekeepers in nearly every aspect of life—so whoever controls the platforms controls both social and private spheres. The temptation to abuse platform regulation is strong, and the future of politics will be shaped by the evolving relationship between states and platforms.
– Restraining platform monopoly means restraining user benefits. Both the service a platform provides—connectivity—and its disservices—polarization and abuse by malicious actors—stem from the same mechanism: the network effect. Fighting the disservice means also undermining the service.
It turns out that in the digital economy, monopoly can be both detrimental and beneficial. While it carries the traditional risks to markets and consumers, it also harnesses the network effect to its fullest extent for the benefit of users. There is no silver-bullet solution to this paradox, and antitrust experts should keep this dilemma in mind—especially now, as the U.S. government begins its antitrust case involving Meta and the social media platforms it controls.
Author Disclosure: The author reports no conflicts of interest. You can read our disclosure policy here.
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