Regulate them, Break them up, or let the free market tame them?

IBD editorializes,

Calls to break up tech giants like Amazon, Facebook and Google have been increasing. But while the sentiment is understandable, the free market is far more likely to tame these giants without any government intervention.

We can remember when everyone was promising that the internet would unleash competition by lowering barriers to entry and often by cutting out the middle man. But in some ways the opposite has happened, as three companies wound up controlling the lion's share of online advertising and commerce.

That, in turn, has generated growing interest in breaking these companies up, or heavily regulating them as monopolies.

...History shows there's a better, faster, more efficient and more direct way to deal with companies that are "too big." Let the free market work. Time and again, giants of industry get toppled not by government regulators, but by new disruptive competitors.

Sears in its heyday, for example, was essentially a combination of Walmart (WMT) and Amazon. It had a massive retail presence, and a massive mail order catalog (the internet of the day) business. Today it is barely breathing.

The government never did break Microsoft up. But new competitors like Google (GOOGL) and Apple (APPL) fundamentally reshaped the marketplace in ways that severely hampered it.

...Of the 500 companies that made the Fortune 500 list in 1955, only 53 remain on that list, notes economist Mark Perry.

Only two of the companies that ranked in the top 10 in 1955 are still on the list. And of the top 10 companies today, four didn't even exist in 1955.

It's a virtual certainty that decades from now, Amazon, Facebook, Google, Apple and others will have gone the way of Microsoft or IBM or Sears or Zenith Electronics or Kodak or Bethlehem Steel. Once mighty companies brought to heel by a dynamic, ever-changing and fiercely competitive market.