Internet and the era of monopolies

From 1911, year in which the US Supreme Court declared the Standard Oil group to be a monopoly and break it up into 34 independent companies, the biggest two being Exxon and Mobil, governments have been struggling against monopolies in order to prevent any company from abusing of a dominant position. Remember that by 1904, the Standard Oil controlled 91% of the refined oil flows in the United States and converted John D. Rockefeller in what is considered the richest man ever!

More recently, in Western countries, there is no case of any government breaking up a monopoly or a large company to avoid a dominant position in a market. Companies like Microsoft have been sued and had to pay penalties but it is far different from a break up. It seems that break ups are simply no more politically aceptables.

On the contraty, in some industries like banking or telecomunication, we can reasonnably think that (public) regulation, supported by industry lobbyists, has been converted into a barrier to new entrants and to innovation and has converted these industries in oligopolies. So, we are not speaking about monopolies but we are not so far. In the UK, the 4 leading banks have a consolidated market share of around 85%. In most European countries, there is only 3 or 4 telecom companies acting as a true oligopoly, offering the same products, same prices, bad customer support, etc. Thanks Free Telecom for starting changing the landscape in France.

On the other side, the Internet is a young industry in which innovation and creative destruction are a natural way to prevent the development of monopolies over the long run. Even if companies like Google, Facebook or Amazon can be considered monopolies, they are not selling first necessity products like in the case of the Standard Oil.

But the main risk with the Internet is speed. The Standard Oil was 41 years old when the monopoly was broken up and the struggle with the government last almost 10 years. In the Internet, what will happen when a company providing a first necessity product or service, or something similar, will convert into a true monopoly at the speed of light? Governments have prooved that they may forbid any merger or acquisition leading to a monopoly but that they are no more able to break up a monopoly based on organic growth. 

As an Internet entrepreneur, I still have a lot to learn, but there is something I have understood from years: in the Internet, any smart entrepreneur wants to build a global monopoly and leading Venture Capitalists, usually American, only want to fund start-ups that have a chance to convert one day into a monopoly... even if they never publicly speak about it. That is the main reason why Venture Capitalists are keen to invest huge amounts of cash in start-ups with sometimes no revenues, no business model but a potential dominant position over the long run.

Source: Wikipedia, http://www.publications.parliament.uk/pa/cm201011/cmselect/cmtreasy/612/61204.htm