This is the Facebook playbook: you lure in publishers by promising them a traffic funnel ("post excerpts and links and we'll show them to people, including people who never asked to see them"), and then the rug-pull: "Post everything here, don't link to your own site. Become a commodity supplier to our platform. Abandon all your own ways of making money. Become entirely subject to the whims of our recommendation system."
Next will be: "We block links to other sites because they might be malicious."
Then some kind of "pivot to video."
Probably not video (though who knows?) but some other feature that a major rival has, which Twitter will attempt to defraud its captive, commodified suppliers into financing an entry into.
In case you were wondering, yes, this is canonical enshittification. Lure in business customers (publishers) by offering surpluses (algorithmic recommendation and an ensuing traffic funnel). Lock them in (by capturing their audience and blocking interop and logged-out reading).
Then rug the publishers, clawing back all the surpluses you gave them and more, draining them of all available capital and any margins they have, until they die or bite the bullet and leave.
I would also give good odds on this leading to a revivification of the "Pay us tens of thousands of dollars a month for a platinum checkmark and we'll actually show what you post to the people who asked to see it."
That will be pitched as the answer to publishers' complaints about not wanting to turn themselves into commodity Twitter inputs. It will be priced at the same (or more) as the revenues publishers expect to lose from being commodified, making it a wash.
All of this seems to me to be an "unfair and deceptive business practice" under Sec 5 of the FTC Act.
If I sign up to follow you because I want to see what you post, and Twitter shadowbans your posts unless they are formatted to maximize your dependence on Twitter, they have deceived me, and are being unfair to you.
This is *very* analogous to the Net Neutrality debate, where a platform blocks or deprioritizes the things its users ask to see, based on whether the suppliers of those things are its competitors.
I've written about how an end-to-end principle for social media could be enforced under Sec 5 of the FTCA, how it would address this kind of sleazy practice, how it would be easy to administer, and wouldn't form a barrier to entry for new market entrants:
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I'm on a 20+ city book tour for my new novel PICKS AND SHOVELS. Catch me in PITTSBURGH on THURSDAY (May 15) at WHITE WHALE BOOKS, and in PDX on Jun 20 at BARNES AND NOBLE with BUNNIE HUANG. More tour dates (London, Manchester) here.
Trump's coalition includes a huge number of people who will suffer terribly from his policies, but who voted for him anyway. Trumpism requires that he find ways to keep those Christmas-voting turkeys happy, or at least distracted.
Trump's go-to move for keeping his base happy is inflicting pain on people they hate, like immigrants, racialized people, queers and women. That goes a long way, obviously: there's a kind of person who can be distracted from their own deteriorating material condition by the spectacle of cruel treatment for their enemies.
But Trumpism can't just run on sadism. There's a lot of people who enjoy the sadism, but not so much that it cancels out their own rage at their deteriorating personal conditions. Trump's main tactic is to blame the suffering of his base on the rest of us: "radical leftists," "wokeism" and other hobgoblins of the small-minded. That, too, has its limits – especially when Trump controls Congress, the courts, the senate and the White House. Obviously, Trump isn't above blaming his own people for being traitors (e.g., by sending a literal noose-bearing lynch mob after his own vice president), but there are limits to this, even for Trump. If all the power-brokers in Trump's coalitions are branded as disloyal, cowardly, or traitorous, Trump will have no one left to do the actual work of advancing his agenda.
Ultimately, keeping Trump's base happy requires providing some form of material benefit to that base. Every authoritarian has a version of this – like the cash handouts that Poland's former far-right government gave out:
For Trump, this presents a problem: because he represents the interests of exploitation, extraction and looting, everything nice that he gives to everyday people in his base potentially gores the ox of someone who really matters to him. It's no surprise, for example, that he reversed Biden's price-cuts for Big Pharma's most expensive drugs – the cheaper drugs are for sick people, the less profitable they'll be for pharma companies:
Luckily (for Trump), Biden's consumer protection and antitrust agencies teed up a long list of extremely good policies that would directly shift money from rich parasites to everyday people. For example, the Consumer Finance Protection Bureau passed a rule that would make it very easy to find out which bank would charge you the least and pay you the most, and let you switch banks with one click:
It was a move that would have shifted $667m/year from banks to everyday people, every year, forever. But Trump's most important barons, like Elon Musk, hated the Consumer Finance Protection Bureau and insisted that it be shuttered, so that $667m/year will go to the banks after all – indeed, virtually all of the good things Biden's CFPB decreed the American public would enjoy henceforth have been destroyed. Sure, Trump would have liked to have taken credit for these, but the conflict between stolen valor and displeasing Shadow President Musk will always cash out in Musk's favor.
It's not just the CFPB. The FTC also set up a whole roster of ambitious projects to improve life for Americans. Some of these made the news in a big way, like the antitrust case against Meta:
Trump has lots of upsides from pursuing the Meta case. Everyone hates Meta products, including (especially) the people who are trapped using them because that's where their friends, family, communities, customers or audiences are. Breaking up Meta would be hugely popular with the American people. But also, once a court has convicted Meta of violating antitrust law, Trump can solicit favors – cash and favorable algorithmic treatment – from Meta in exchange for ordering his FTC to go easy on Meta in the "remedy phase," letting them off with a fine, rather than forcing them to spin out Whatsapp and Instagram:
But even if Trump lets Meta walk, there's plenty of great stuff Biden's FTC did that he could take credit for – policies that would help everyday people.
The most prominent of these is the FTC's "Click to Cancel" rule. It's a pretty simple rule: companies have to make it as easy to cancel a subscription as it was to sign up for it.
In other words, they can't do that thing – beloved of everything from the New York Times to every manosphere influencer's supplement business – where you can sign up for a subscription with one click, but you can't cancel unless you phone them, wait on hold, and beg them to let you off the hook.
Companies do this on purpose, because it's super profitable. Amazon executives carried on internal email threads where they straight up said that they'd deliberately made it confusingly easy to sign up for Prime and basically impossible to stop paying for it:
This is a no-brainer. Companies make signing up for subscriptions into a greased slide, and they make canceling subscriptions into a greased pole.
No wonder, then, that when the FTC solicited public comments on a proposed "click to cancel" rule, they had no trouble building up the evidentiary record needed to pass the rule.
Now, Trump's FTC has announced that they are delaying enforcement of the rule until mid-July:
This is the second time they've delayed enforcement (originally, the rule was supposed to go into effect in January). Trump FTC chairman Andrew Ferguson had no trouble getting the votes for the suspension, because he illegally fired the two Democratic Commissioners, Alvaro Bedoya and Rebecca Slaughter:
Ferguson is proof that the FTC can't do anything material for Trump's base. Sure, he can set up a snitch-line so tht FTC employees can rat each other out for being "woke":
This should be a slam dunk. It epitomizes the "unfair and deceptive" business practices Section 5 of the FTC Act empowers the agency to snuff out. The Trump admin is unwilling to gore the ox of out-and-out scammers, people who trick you into unkillable subscriptions. It seems that there's no material benefit that Trump's oligarch backers are willing to cede to working people. All they can offer is cruelty.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
The brains behind Trump's stolen Supreme Court have detailed plans: they didn't just scheme to pack the court with judges who weren't qualified for – or entitled to – a SCOTUS life-tenure, they also set up a series of cases for that radical court to hear.
Obviously, Dobbs was the big one, but it's only part of a whole procession of trumped-up cases designed to give the court a chance to overturn decades of settled law and create zones of impunity for America's oligarchs and the monopolies that provide them with wealth and power.
One of these cases is Jarkesy, a case designed to allow SCOTUS to euthanize every agency in the US government, stripping them of their powers to fight corporate crime:
The argument goes, "Congress had the power to spell out every possible problem an agency might deal with and to create a list of everything they were allowed to do about these problems. If they didn't, then the agency isn't allowed to act."
This is an Objectively Very Stupid argument, and it takes a heroic act of motivated reasoning to buy it. The whole point of expert agencies is that they're experts and that they might discover new problems in American life, and come up with productive ways of fixing them. If the only way for an agency to address a problem is to wait for Congress to notice it and pass a law about it, then we don't even need agencies – Congress can just be the regulator, as well as the lawmaker.
If there was any doubt that Congress created the agencies as flexible and adaptive hedges against new threats and problems, then the legislative history of the FTC Act should dispel it.
Congress created the FTC through the FTCA because the courts kept misinterpreting its existing antitrust laws, like the Sherman Act. Companies would engage in the most obvious acts of naked, catastrophic fuckery, and judges would say, "Welp, because Congress didn't specifically ban this conduct, I guess it's OK."
So Congress created the FTC with an Act that included a broad authority to investigate and punish "unfair methods of competition." They didn't spell these out – instead, they explicitly said (in Section 5) that it was the FTC's job to determine whether something was unfair, and to act on it:
The job of the FTC is to investigate unfair conduct before it becomes such a problem that Congress takes action, and to head that conduct off so that it never rises to the level of needing Congressional intervention.
Now, it's true that since the Reagan years, the FTC has grown progressively less interested in using this power, but that's broadly true of all of America's corporate watchdogs. But as the public all over the world has grown ever more furious about corporate abuses and oligarchic wealth, governments everywhere have rediscovered their role as a public protector.
In America, the Biden administration altered the course of history with the appointment of new enforcers in the key anti-monopoly agencies: the FTC and the DOJ's antitrust division. But more importantly, the Biden admin created a detailed, technical plan to use every agency's powers to fight monopoly, in a "whole of government" approach:
Now, this can give rise to seeming redundancies. Take labor issues. The NLRB is a (potentially) powerful regulator that had been in a coma for decades, but has awoken and taken up labor rights with a fervor and cunning that is a delight to behold:
At the same time, the FTC has also taken up labor rights, using its much broader powers to do things like ban noncompetes nationwide, unshackling workers from bosses who claim the right to veto who else they can work for:
But the NLRB doesn't make the FTC redundant, or vice-versa. The NLRB's role is principally reactive, punishing wrongdoing after it occurs. But the FTC has the power to intervene in incipient harms, labor abuses that have not yet risen to the level of NLRB enforcement or new acts of Congress.
This case is made beautifully in Alvaro Bedoya's speech "'Overawed': Worker Misclassification as a Potential Unfair Method of Competition," delivered to the Law Leaders Global Summit in Miami today:
Bedoya describes why the FTC has turned its attention to the problem of "worker misclassification," in which employees are falsely claimed to be contractors, and thus deprived of the rights that workers are entitled to. Worker misclassification is rampant, and it transfers billions from workers to employers every year. As Bedoya says, 10-30% of employers engage in worker misclassification, allowing them to dodge payment for overtime, Social Security, workers' comp, unemployment insurance, healthcare, retirement and even a minimum wage. Each misclassified worker is between $6k-18k poorer thanks to this scam – a typical misclassified worker sees a one third decline in their earning power. And, of course, each misclassified worker's boss is $6k-$18k richer because of this scam.
It's not just wages, it's workplace safety. One of the most dangerous jobs in the country is construction worker, and worker misclassification is rampant in the sector. That means that construction workers are three times more likely than other workers to lack health insurance.
What's more, misclassified workers can't form unions, because their bosses' fiction treats them as independent contractors, not employees, which means that misclassified construction workers can't join trade unions and demand health-care, or safer workplaces.
Contrast this with, say, cops, who have powerful "unions" that afford them gold-plated health care and lavish compensation, even for imaginary ailments like "contact overdoses" from touching fentanyl – a medical impossibility that still entitles our nation's armed bureaucrats to handsome public compensation:
Cops have far safer jobs than construction workers, but cops don't get misclassified, so they are able to collect benefits that no other worker – public or private – can hope for.
Not every employer wants to cheat and maim their employees, of course. In Bedoya's speech, he references Sandie Domando, an executive VP at a construction company in Palm Beach Gardens. Domando's company keeps its employees on its books, giving them health-care and other benefits. But when she started bidding against rival firms for jobs funded by the covid stimulus, she couldn't compete – two thirds of those jobs went to other firms that were able to put in cheaper bids. Those bids were cheaper because they were defrauding their workers by misclassifying them. Thus, publicly funded projects were overwhelmingly handed over to fraudulent companies. Fraud becomes a fitness-factor for winning jobs. It's a market for lemons – among employers.
Employee misclassification is a pure transfer from workers to bosses. Bedoya recounts the story of Samuel Talavera, Jr, a short-haul trucker who worked for decades in the Port of Los Angeles. For decades, his job paid well: enough to support his family and even take his kids to Disneyland now and again.
But in 2010, his employer reclassified him as a contractor. They ordered him to buy a new truck – which they financed on a lease-purchase basis – and put him to work for 16 hours stretches in shifts lasting as much as 20 hours per day. Talavera couldn't pick his own hours or pick his routes, but he was still treated as an independent contractor for payroll and labor protection purposes.
This lead to an terrible decline in Talavera's working conditions. He gave up going home between shifts, sleeping in his cab instead. His pay dropped through the floor, thanks to junk-fees that relied on the fiction that he was a contractor. For example, his boss started to charge him rent on the space his truck took up while he was standing by for a job at the port. Other truckers at the port saw paycheck deductions for the toilet-paper in the bathrooms!
Talavera's take-home pay dropped so low that he was bringing home a weekly wage of $112 or $33 (one week, his pay amounted to $0.67). His wife had to work three jobs, and they still had to declare bankruptcy to avoid losing their home. When Talavera's truck needed repairs he couldn't afford, his boss fired him and took back the truck, and Talavera was out the $78,000 he'd paid into it on the lease-purchase plan.
This story – and the many, many others like it from the Port of LA – paint a clear picture of the transfer of wealth from workers to their bosses that comes with worker misclassification. The work that Talavera did in the Port of LA didn't get less valuable when he was misclassified – but the share of that value that Talavera received dropped to as little as $0.67/week.
Worker misclassification is rampant across many sectors, but its handmaiden is technology. The fiction of independence is much easier to maintain when the fine-grained employer-employee control is mediated by an app (think of Uber):
That's why those scare-stories that AI trucks were going to make truckers obsolete and create an employment crisis were such toxic nonsense. Not only are we unlikely to see self-driving trucks, but the same investors that back AI technology are making bank on companies that practice worker misclassification through the "it's not a crime if we do it with an app" gambit:
By focusing our attention on a hypothetical employment crisis that will supposedly be caused by future AI developments, tech investors can distract us from the real employment crisis that's created by app-enabled worker misclassification, which is also the source of much of the capital they're plowing into AI.
That's why the FTC's work on misclassification is so urgent. Misclassification is a scam that hurts workers and creates oligarchic power – and it's also a mass-extinction event for good companies that don't cheat their workers, because those honest companies can't compete.
Worker misclassification is having a long-overdue and much needed moment. The revolutionary overthrow of the rotten old leadership at the Teamsters was caused, in part, by a radical wing that promised to focus the Teamsters' firepower on fighting worker misclassification:
Bedoya's speech is a banger, and it reminds us that labor rights and anti-monopoly have always been part of the same project: to rein in corporate power and protect workers from the insatiable greed of the capital class:
Tomorrow (Nov 4), I'm keynoting the Hackaday Supercon in Pasadena, CA.
The thing is, any feed or search result is "algorithmic." "Just show me the things posted by people I follow in reverse-chronological order" is an algorithm. "Just show me products that have this SKU" is an algorithm. "Alphabetical sort" is an algorithm. "Random sort" is an algorithm.
Any process that involves more information than you can take in at a glance or digest in a moment needs some kind of sense-making. It needs to be put in some kind of order. There's always gonna be an algorithm.
But that's not what we mean by "the algorithm" (TM). When we talk about "the algorithm," we mean a system for ordering information that uses complex criteria that are not precisely known to us, and than can't be easily divined through an examination of the ordering.
There's an idea that a "good" algorithm is one that does not seek to deceive or harm us. When you search for a specific part number, you want exact matches for that search at the top of the results. It's fine if those results include third-party parts that are compatible with the part you're searching for, so long as they're clearly labeled. There's room for argument about how to order those results – do highly rated third-party parts go above the OEM part? How should the algorithm trade off price and quality?
It's hard to come up with an objective standard to resolve these fine-grained differences, but search technologists have tried. Think of Google: they have a patent on "long clicks." A "long click" is when you search for something and then don't search for it again for quite some time, the implication being that you've found what you were looking for. Google Search ads operate a "pay per click" model, and there's an argument that this aligns Google's ad division's interests with search quality: if the ad division only gets paid when you click a link, they will militate for placing ads that users want to click on.
Platforms are inextricably bound up in this algorithmic information sorting business. Platforms have emerged as the endemic form of internet-based business, which is ironic, because a platform is just an intermediary – a company that connects different groups to each other. The internet's great promise was "disintermediation" – getting rid of intermediaries. We did that, and then we got a whole bunch of new intermediaries.
Usually, those groups can be sorted into two buckets: "business customers" (drivers, merchants, advertisers, publishers, creative workers, etc) and "end users" (riders, shoppers, consumers, audiences, etc). Platforms also sometimes connect end users to each other: think of dating sites, or interest-based forums on Reddit. Either way, a platform's job is to make these connections, and that means platforms are always in the algorithm business.
Whether that's matching a driver and a rider, or an advertiser and a consumer, or a reader and a mix of content from social feeds they're subscribed to and other sources of information on the service, the platform has to make a call as to what you're going to see or do.
These choices are enormously consequential. In the theory of Surveillance Capitalism, these choices take on an almost supernatural quality, where "Big Data" can be used to guess your response to all the different ways of pitching an idea or product to you, in order to select the optimal pitch that bypasses your critical faculties and actually controls your actions, robbing you of "the right to a future tense."
I don't think much of this hypothesis. Every claim to mind control – from Rasputin to MK Ultra to neurolinguistic programming to pick-up artists – has turned out to be bullshit. Besides, you don't need to believe in mind control to explain the ways that algorithms shape our beliefs and actions. When a single company dominates the information landscape – say, when Google controls 90% of your searches – then Google's sorting can deprive you of access to information without you knowing it.
If every "locksmith" listed on Google Maps is a fake referral business, you might conclude that there are no more reputable storefront locksmiths in existence. What's more, this belief is a form of self-fulfilling prophecy: if Google Maps never shows anyone a real locksmith, all the real locksmiths will eventually go bust.
If you never see a social media update from a news source you follow, you might forget that the source exists, or assume they've gone under. If you see a flood of viral videos of smash-and-grab shoplifter gangs and never see a news story about wage theft, you might assume that the former is common and the latter is rare (in reality, shoplifting hasn't risen appreciably, while wage-theft is off the charts).
In the theory of Surveillance Capitalism, the algorithm was invented to make advertisers richer, and then went on to pervert the news (by incentivizing "clickbait") and finally destroyed our politics when its persuasive powers were hijacked by Steve Bannon, Cambridge Analytica, and QAnon grifters to turn millions of vulnerable people into swivel-eyed loons, racists and conspiratorialists.
As I've written, I think this theory gives the ad-tech sector both too much and too little credit, and draws an artificial line between ad-tech and other platform businesses that obscures the connection between all forms of platform decay, from Uber to HBO to Google Search to Twitter to Apple and beyond:
As a counter to Surveillance Capitalism, I've proposed a theory of platform decay called enshittification, which identifies how the market power of monopoly platforms, combined with the flexibility of digital tools, combined with regulatory capture, allows platforms to abuse both business-customers and end-users, by depriving them of alternatives, then "twiddling" the knobs that determine the rules of the platform without fearing sanction under privacy, labor or consumer protection law, and finally, blocking digital self-help measures like ad-blockers, alternative clients, scrapers, reverse engineering, jailbreaking, and other tech guerrilla warfare tactics:
One important distinction between Surveillance Capitalism and enshittification is that enshittification posits that the platform is bad for everyone. Surveillance Capitalism starts from the assumption that surveillance advertising is devastatingly effective (which explains how your racist Facebook uncles got turned into Jan 6 QAnons), and concludes that advertisers must be well-served by the surveillance system.
But advertisers – and other business customers – are very poorly served by platforms. Procter and Gamble reduced its annual surveillance advertising budget from $100m//year to $0/year and saw a 0% reduction in sales. The supposed laser-focused targeting and superhuman message refinement just don't work very well – first, because the tech companies are run by bullshitters whose marketing copy is nonsense, and second because these companies are monopolies who can abuse their customers without losing money.
The point of enshittification is to lock end-users to the platform, then use those locked-in users as bait for business customers, who will also become locked to the platform. Once everyone is holding everyone else hostage, the platform uses the flexibility of digital services to play a variety of algorithmic games to shift value from everyone to the business's shareholders. This flexibility is supercharged by the failure of regulators to enforce privacy, labor and consumer protection standards against the companies, and by these companies' ability to insist that regulators punish end-users, competitors, tinkerers and other third parties to mod, reverse, hack or jailbreak their products and services to block their abuse.
Enshittification needs The Algorithm. When Uber wants to steal from its drivers, it can just do an old-fashioned wage theft, but eventually it will face the music for that kind of scam:
The best way to steal from drivers is with algorithmic wage discrimination. That's when Uber offers occassional, selective drivers higher rates than it gives to drivers who are fully locked to its platform and take every ride the app offers. The less selective a driver becomes, the lower the premium the app offers goes, but if a driver starts refusing rides, the wage offer climbs again. This isn't the mind-control of Surveillance Capitalism, it's just fraud, shaving fractional pennies off your paycheck in the hopes that you won't notice. The goal is to get drivers to abandon the other side-hustles that allow them to be so choosy about when they drive Uber, and then, once the driver is fully committed, to crank the wage-dial down to the lowest possible setting:
This is the same game that Facebook played with publishers on the way to its enshittification: when Facebook began aggressively courting publishers, any short snippet republished from the publisher's website to a Facebook feed was likely to be recommended to large numbers of readers. Facebook offered publishers a vast traffic funnel that drove millions of readers to their sites.
But as publishers became more dependent on that traffic, Facebook's algorithm started downranking short excerpts in favor of medium-length ones, building slowly to fulltext Facebook posts that were fully substitutive for the publisher's own web offerings. Like Uber's wage algorithm, Facebook's recommendation engine played its targets like fish on a line.
When publishers responded to declining reach for short excerpts by stepping back from Facebook, Facebook goosed the traffic for their existing posts, sending fresh floods of readers to the publisher's site. When the publisher returned to Facebook, the algorithm once again set to coaxing the publishers into posting ever-larger fractions of their work to Facebook, until, finally, the publisher was totally locked into Facebook. Facebook then started charging publishers for "boosting" – not just to be included in algorithmic recommendations, but to reach their own subscribers.
Enshittification is modern, high-tech enabled, monopolistic form of rent seeking. Rent-seeking is a subtle and important idea from economics, one that is increasingly relevant to our modern economy. For economists, a "rent" is income you get from owning a "factor of production" – something that someone else needs to make or do something.
Rents are not "profits." Profit is income you get from making or doing something. Rent is income you get from owning something needed to make a profit. People who earn their income from rents are called rentiers. If you make your income from profits, you're a "capitalist."
Capitalists and rentiers are in irreconcilable combat with each other. A capitalist wants access to their factors of production at the lowest possible price, whereas rentiers want those prices to be as high as possible. A phone manufacturer wants to be able to make phones as cheaply as possible, while a patent-troll wants to own a patent that the phone manufacturer needs to license in order to make phones. The manufacturer is a capitalism, the troll is a rentier.
The troll might even decide that the best strategy for maximizing their rents is to exclusively license their patents to a single manufacturer and try to eliminate all other phones from the market. This will allow the chosen manufacturer to charge more and also allow the troll to get higher rents. Every capitalist except the chosen manufacturer loses. So do people who want to buy phones. Eventually, even the chosen manufacturer will lose, because the rentier can demand an ever-greater share of their profits in rent.
Digital technology enables all kinds of rent extraction. The more digitized an industry is, the more rent-seeking it becomes. Think of cars, which harvest your data, block third-party repair and parts, and force you to buy everything from acceleration to seat-heaters as a monthly subscription:
The cloud is especially prone to rent-seeking, as Yanis Varoufakis writes in his new book, Technofeudalism, where he explains how "cloudalists" have found ways to lock all kinds of productive enterprise into using cloud-based resources from which ever-increasing rents can be extracted:
The endless malleability of digitization makes for endless variety in rent-seeking, and cataloging all the different forms of digital rent-extraction is a major project in this Age of Enshittification. "Algorithmic Attention Rents: A theory of digital platform market power," a new UCL Institute for Innovation and Public Purpose paper by Tim O'Reilly, Ilan Strauss and Mariana Mazzucato, pins down one of these forms:
The "attention rents" referenced in the paper's title are bait-and-switch scams in which a platform deliberately enshittifies its recommendations, search results or feeds to show you things that are not the thing you asked to see, expect to see, or want to see. They don't do this out of sadism! The point is to extract rent – from you (wasted time, suboptimal outcomes) and from business customers (extracting rents for "boosting," jumbling good results in among scammy or low-quality results).
The authors cite several examples of these attention rents. Much of the paper is given over to Amazon's so-called "advertising" product, a $31b/year program that charges sellers to have their products placed above the items that Amazon's own search engine predicts you will want to buy:
This is a form of gladiatorial combat that pits sellers against each other, forcing them to surrender an ever-larger share of their profits in rent to Amazon for pride of place. Amazon uses a variety of deceptive labels ("Highly Rated – Sponsored") to get you to click on these products, but most of all, they rely two factors. First, Amazon has a long history of surfacing good results in response to queries, which makes buying whatever's at the top of a list a good bet. Second, there's just so many possible results that it takes a lot of work to sift through the probably-adequate stuff at the top of the listings and get to the actually-good stuff down below.
Amazon spent decades subsidizing its sellers' goods – an illegal practice known as "predatory pricing" that enforcers have increasingly turned a blind eye to since the Reagan administration. This has left it with few competitors:
The lack of competing retail outlets lets Amazon impose other rent-seeking conditions on its sellers. For example, Amazon has a "most favored nation" requirement that forces companies that raise their prices on Amazon to raise their prices everywhere else, which makes everything you buy more expensive, whether that's a Walmart, Target, a mom-and-pop store, or direct from the manufacturer:
But everyone loses in this "two-sided market." Amazon used "junk ads" to juice its ad-revenue: these are ads that are objectively bad matches for your search, like showing you a Seattle Seahawks jersey in response to a search for LA Lakers merch:
The more of these junk ads Amazon showed, the more revenue it got from sellers – and the more the person selling a Lakers jersey had to pay to show up at the top of your search, and the more they had to charge you to cover those ad expenses, and the more they had to charge for it everywhere else, too.
The authors describe this process as a transformation between "attention rents" (misdirecting your attention) to "pecuniary rents" (making money). That's important: despite decades of rhetoric about the "attention economy," attention isn't money. As I wrote in my enshittification essay:
You can't use attention as a medium of exchange. You can't use it as a store of value. You can't use it as a unit of account. Attention is like cryptocurrency: a worthless token that is only valuable to the extent that you can trick or coerce someone into parting with "fiat" currency in exchange for it. You have to "monetize" it – that is, you have to exchange the fake money for real money.
The authors come up with some clever techniques for quantifying the ways that this scam harms users. For example, they count the number of places that an advertised product rises in search results, relative to where it would show up in an "organic" search. These quantifications are instructive, but they're also a kind of subtweet at the judiciary.
In 2018, SCOTUS's ruling in American Express v Ohio changed antitrust law for two-sided markets by insisting that so long as one side of a two-sided market was better off as the result of anticompetitive actions, there was no antitrust violation:
For platforms, that means that it's OK to screw over sellers, advertisers, performers and other business customers, so long as the end-users are better off: "Go ahead, cheat the Uber drivers, so long as you split the booty with Uber riders."
But in the absence of competition, regulation or self-help measures, platforms cheat everyone – that's the point of enshittification. The attention rents that Amazon's payola scheme extract from shoppers translate into higher prices, worse goods, and lower profits for platform sellers. In other words, Amazon's conduct is so sleazy that it even threads the infinitesimal needle that the Supremes created in American Express.
Here's another algorithmic pecuniary rent: Amazon figured out which of its major rivals used an automated price-matching algorithm, and then cataloged which products they had in common with those sellers. Then, under a program called Project Nessie, Amazon jacked up the prices of those products, knowing that as soon as they raised the prices on Amazon, the prices would go up everywhere else, so Amazon wouldn't lose customers to cheaper alternatives. That scam made Amazon at least a billion dollars:
This is a great example of how enshittification – rent-seeking on digital platforms – is different from analog rent-seeking. The speed and flexibility with which Amazon and its rivals altered their prices requires digitization. Digitization also let Amazon crank the price-gouging dial to zero whenever they worried that regulators were investigating the program.
So what do we do about it? After years of being made to look like fumblers and clowns by Big Tech, regulators and enforcers – and even lawmakers – have decided to get serious.
The neoliberal narrative of government helplessness and incompetence would have you believe that this will go nowhere. Governments aren't as powerful as giant corporations, and regulators aren't as smart as the supergeniuses of Big Tech. They don't stand a chance.
But that's a counsel of despair and a cheap trick. Weaker US governments have taken on stronger oligarchies and won – think of the defeat of JD Rockefeller and the breakup of Standard Oil in 1911. The people who pulled that off weren't wizards. They were just determined public servants, with political will behind them. There is a growing, forceful public will to end the rein of Big Tech, and there are some determined public servants surfing that will.
In this paper, the authors try to give those enforcers ammo to bring to court and to the public. For example, Amazon claims that its algorithm surfaces the products that make the public happy, without the need for competitive pressure to keep it sharp. But as the paper points out, the only successful new rival ecommerce platform – Tiktok – has found an audience for an entirely new category of goods: dupes, "lower-cost products that have the same or better features than higher cost branded products."
The authors also identify "dark patterns" that platforms use to trick users into consuming feeds that have a higher volume of things that the company profits from, and a lower volume of things that users want to see. For example, platforms routinely switch users from a "following" feed – consisting of things posted by people the user asked to hear from – with an algorithmic "For You" feed, filled with the things the company's shareholders wish the users had asked to see.
Calling this a "dark pattern" reveals just how hollow and self-aggrandizing that term is. "Dark pattern" usually means "fraud." If I ask to see posts from people I like, and you show me posts from people who'll pay you for my attention instead, that's not a sophisticated sleight of hand – it's just a scam. It's the social media equivalent of the eBay seller who sends you an iPhone box with a bunch of gravel inside it instead of an iPhone. Tech bros came up with "dark pattern" as a way of flattering themselves by draping themselves in the mantle of dopamine-hacking wizards, rather than unimaginative con-artists who use a computer to rip people off.
These For You algorithmic feeds aren't just a way to increase the load of sponsored posts in a feed – they're also part of the multi-sided ripoff of enshittified platforms. A For You feed allows platforms to trick publishers and performers into thinking that they are "good at the platform," which both convinces to optimize their production for that platform, and also turns them into Judas Goats who conspicuously brag about how great the platform is for people like them, which brings their peers in, too.
In Veena Dubal's essential paper on algorithmic wage discrimination, she describes how Uber drivers whom the algorithm has favored with (temporary) high per-ride rates brag on driver forums about their skill with the app, bringing in other drivers who blame their lower wages on their failure to "use the app right":
If you go down to the midway at your county fair, you'll spot some poor sucker walking around all day with a giant teddy bear that they won by throwing three balls in a peach basket.
The peach-basket is a rigged game. The carny can use a hidden switch to force the balls to bounce out of the basket. No one wins a giant teddy bear unless the carny wants them to win it. Why did the carny let the sucker win the giant teddy bear? So that he'd carry it around all day, convincing other suckers to put down five bucks for their chance to win one:
The carny allocated a giant teddy bear to that poor sucker the way that platforms allocate surpluses to key performers – as a convincer in a "Big Store" con, a way to rope in other suckers who'll make content for the platform, anchoring themselves and their audiences to it.
Platform can't run the giant teddy-bear con unless there's a For You feed. Some platforms – like Tiktok – tempt users into a For You feed by making it as useful as possible, then salting it with doses of enshittification:
Other platforms use the (ugh) "dark pattern" of simply flipping your preference from a "following" feed to a "For You" feed. Either way, the platform can't let anyone keep the giant teddy-bear. Once you've tempted, say, sports bros into piling into the platform with the promise of millions of free eyeballs, you need to withdraw the algorithm's favor for their content so you can give it to, say, astrologers. Of course, the more locked-in the users are, the more shit you can pile into that feed without worrying about them going elsewhere, and the more giant teddy-bears you can give away to more business users so you can lock them in and start extracting rent.
For regulators, the possibility of a "good" algorithmic feed presents a serious challenge: when a feed is bad, how can a regulator tell if its low quality is due to the platform's incompetence at blocking spammers or guessing what users want, or whether it's because the platform is extracting rents?
The paper includes a suite of recommendations, including one that I really liked:
Regulators, working with cooperative industry players, would define reportable metrics based on those that are actually used by the platforms themselves to manage search, social media, e-commerce, and other algorithmic relevancy and recommendation engines.
In other words: find out how the companies themselves measure their performance. Find out what KPIs executives have to hit in order to earn their annual bonuses and use those to figure out what the company's performance is – ad load, ratio of organic clicks to ad clicks, average click-through on the first organic result, etc.
They also recommend some hard rules, like reserving a portion of the top of the screen for "organic" search results, and requiring exact matches to show up as the top result.
I've proposed something similar, applicable across multiple kinds of digital businesses: an end-to-end principle for online services. The end-to-end principle is as old as the internet, and it decrees that the role of an intermediary should be to deliver data from willing senders to willing receivers as quickly and reliably as possible. When we apply this principle to your ISP, we call it Net Neutrality. For services, E2E would mean that if I subscribed to your feed, the service would have a duty to deliver it to me. If I hoisted your email out of my spam folder, none of your future emails should land there. If I search for your product and there's an exact match, that should be the top result:
One interesting wrinkle to framing platform degradation as a failure to connect willing senders and receivers is that it places a whole host of conduct within the regulatory remit of the FTC. Section 5 of the FTC Act contains a broad prohibition against "unfair and deceptive" practices:
That means that the FTC doesn't need any further authorization from Congress to enforce an end to end rule: they can simply propose and pass that rule, on the grounds that telling someone that you'll show them the feeds that they ask for and then not doing so is "unfair and deceptive."
Some of the other proposals in the paper also fit neatly into Section 5 powers, like a "sticky" feed preference. If I tell a service to show me a feed of the people I follow and they switch it to a For You feed, that's plainly unfair and deceptive.
All of this raises the question of what a post-Big-Tech feed would look like. In "How To Break Up Amazon" for The Sling, Peter Carstensen and Darren Bush sketch out some visions for this:
https://www.thesling.org/how-to-break-up-amazon/
They imagine a "condo" model for Amazon, where the sellers collectively own the Amazon storefront, a model similar to capacity rights on natural gas pipelines, or to patent pools. They see two different ways that search-result order could be determined in such a system:
"specific premium placement could go to those vendors that value the placement the most [with revenue] shared among the owners of the condo"
or
"leave it to owners themselves to create joint ventures to promote products"
Note that both of these proposals are compatible with an end-to-end rule and the other regulatory proposals in the paper. Indeed, all these policies are easier to enforce against weaker companies that can't afford to maintain the pretense that they are headquartered in some distant regulatory haven, or pay massive salaries to ex-regulators to work the refs on their behalf:
The re-emergence of intermediaries on the internet after its initial rush of disintermediation tells us something important about how we relate to one another. Some authors might be up for directly selling books to their audiences, and some drivers might be up for creating their own taxi service, and some merchants might want to run their own storefronts, but there's plenty of people with something they want to offer us who don't have the will or skill to do it all. Not everyone wants to be a sysadmin, a security auditor, a payment processor, a software engineer, a CFO, a tax-preparer and everything else that goes into running a business. Some people just want to sell you a book. Or find a date. Or teach an online class.
Intermediation isn't intrinsically wicked. Intermediaries fall into pits of enshitffication and other forms of rent-seeking when they aren't disciplined by competitors, by regulators, or by their own users' ability to block their bad conduct (with ad-blockers, say, or other self-help measures). We need intermediaries, and intermediaries don't have to turn into rent-seeking feudal warlords. That only happens if we let it happen.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
U.S. FTC sends letter to Apple CEO Tim Cook about amplifying left-leaning media outlets in Apple News app
The U.S. Federal Trade Commission (FTC) has sent a letter to Apple regarding allegations of political bias in its Apple News curation.
In a letter addressed to CEO Tim Cook on Wednesday, FTC Chairman Andrew Ferguson cautioned that Apple News may violate Section 5 of the FTC Act, which bans unfair or deceptive acts or practices in commerce.
Joseph A. Wulfsohn for Fox News:
“The First Amendment…
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SCOTUS: FTC Has No Authority to Obtain Monetary Relief Under Section 13(b) of the FTC Act
SCOTUS: FTC Has No Authority to Obtain Monetary Relief Under Section 13(b) of the FTC Act
The Supreme Court unanimously held that Section 13(b) of the Federal Trade Commission Act does not give the Commission authority to bypass administrative proceedings and seek equitable monetary relief directly from the federal courts.
Section 13(b) of the FTC Act provides that when the Commission “has reason to believe that any person, partnership, or corporation is violating, or is about to…
