The debate over monopolies in the tech industry has been heating up, with regulatory bodies in the U.S. and Europe taking aggressive stances against companies like Google, Apple, and Amazon. But the frameworks these governments use to determine monopoly power are often flawed, relying too heavily on market share as the defining factor. This approach assumes that a company’s dominance automatically equates to harm, ignoring the nuances of market dynamics and consumer choice.

The Problem with Market Share as the Sole Indicator

One of the biggest issues with the current antitrust system is its bias toward equating size with monopolistic power. A company can dominate an industry without engaging in anti-competitive behavior, simply by offering the best product. This was once true of Google’s search engine—while it may not be the best anymore, it was undeniably superior for years, and people chose it because it worked better than the competition. The same principle applies to Apple’s ecosystem, which offers a seamless experience that many consumers willingly opt into. But does that mean these companies are abusing their power, or are they simply the most effective at meeting consumer needs?

At the same time, we need to acknowledge that some companies can be both a monopoly of choice and an actual monopoly. Just because consumers freely choose a dominant company doesn’t mean that company isn’t leveraging its market position to shut out competition. That’s why a more structured approach is necessary.

A Four-Factor Approach to Evaluating Tech Monopolies

Instead of relying solely on market share, we should adopt a four-factor test that evaluates market power based on real-world impact.

1. Abuse of Dominance – Does the company use its position to unfairly block competition?
2. Consumer Harm – Are consumers worse off due to inflated prices, limited choice, or stagnation?
3. Barriers to Entry – Are new competitors unable to enter due to artificial constraints rather than natural market conditions?
4. Ecosystem Control & Gatekeeping – Does the company control critical platforms or infrastructure in a way that restricts fair competition?

Applying the Four-Factor Test

Take Amazon Web Services (AWS) as an example. It dominates cloud computing, but not because of exclusionary practices—it simply provides a comprehensive service that businesses rely on. Competing at the same scale requires immense capital and infrastructure, creating high barriers to entry. But that’s a function of the industry itself, not deliberate market manipulation.

Apple’s App Store, on the other hand, has been at the center of major antitrust debates. While Apple argues that its strict policies ensure quality and security, critics claim they limit competition and force developers into an unfair revenue-sharing model. The key question is whether Apple’s control crosses the line into anti-competitive gatekeeping.

A More Standardized Global Approach

Currently, antitrust enforcement varies widely between jurisdictions. The U.S. prioritizes consumer harm, while the EU takes a stricter approach, sometimes intervening even when no clear harm exists. This inconsistency creates challenges for global companies and can lead to politically motivated enforcement. Governments should work toward a standardized approach, much like how intellectual property laws are handled internationally.

Moving Beyond Outdated Monopoly Definitions

The tech industry evolves rapidly, and regulatory frameworks need to keep up. Companies should be evaluated based on their actual market behavior, not just their size. Those that engage in anti-competitive tactics should be held accountable, but success alone shouldn’t be penalized.

Market power alone doesn’t define a monopoly—how that power is used does. If regulators want to ensure fair competition, they need to rethink their approach, focusing on genuine anti-competitive behavior rather than outdated assumptions about dominance.