What is “Enshittification” of Tech Companies? With Author Cory Doctorow

0:28The best B2B marketing gets wasted on the wrong people.

0:36Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, how the internet became enshittified. Neil, that's actually not a curse word. It's the brainchild of today's guest, Corey Doctorow. It's Wednesday, December 24th. Let's ride.

0:57Merry Christmas Eve, everyone. For our final podcast before you unwrap your presence, we're bringing you a chat with someone who will change the way you think about the internet. Cory Doctorow is a prolific author and internet scholar who coined the term inshittification to describe the decay you experience every day on platforms like Amazon, Facebook, and Google. He has just come out with a book that explains how and why inshittification happens and what can possibly be done about it. Now, forewarning, you're going to hear a lot of words that are reminiscent of bowel movements. But as Corey will explain, it's the perfect word for describing what everyone on the Internet feels right now, which is things just feel a little bit worse these days.

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2:46So the first question I had after I read your wonderful book is how the heck did you come up with this term? Were you sitting on the toilet one day and you thought, ah, brain blast, there is something here? No, it's both less exciting and sort of more contingent than that. So I work for a nonprofit called the Electronic Frontier Foundation. We're sort of the leading digital rights group in the world, and I've been there for 25 years. And getting people to care about digital rights, it's hard, right, because you're asking them to care about things that are abstract and far in the future and technical.

3:20you know, you can just like wait until their lives have been destroyed by technology and then they'll care about it. But you'd ideally like to raise the salience while there's still time to do something about it. Right. So I have just spent a couple of decades coming up with words and concepts and framing devices and metaphors and similes and whatever. And in this case, I was on vacation with my family in Puerto Rico and we had rented a little cabin in a cloud forest and it was serviced improbably by microwave internet. And one of the reasons that's improbable is that if you know one thing about microwave internet, the one thing everyone knows is that it doesn't go through clouds.

3:56And I remind you, we were in a cloud forest. And so before we would drive down into town, which was a couple hours away, there are a couple little towns we could go, we try and look up on TripAdvisor, which restaurant to go to, whether it was open, that kind of thing. And And you'd load like 20 TripAdvisor tabs and they just time out because there's like 75 trackers on TripAdvisor. And it would load about 40 of them and then just die. And the only thing in the window would be what's called the favico. It's the little icon that goes in the tab and would just fill the whole screen, like a high-res vector image of the TripAdvisor logo.

4:30So in a fit of peek, I tweeted, has anyone at TripAdvisor ever been on a trip? This is the most inshittified website I've ever used. and people did what you're doing. They kind of polite chuckle. And then, you know, a year later, I was thinking about this bigger critique of platform decay. And I was like, you know, I kind of got a laugh out of that word and shitification. Maybe I'll use that to describe this thing. The reason that I think that story matters is it tells you that it's not merely the minor license to vulgarity, although I think that's important. People love cussing, but it's the combination of the technical critique and the minor license to vulgarity that was like the magic peanut butter and chocolate here that if it were just the vulgarity, people would have just been using it for all the interim.

5:16So you said you've been making up similes and metaphors and weird words to describe things for a long time. What were some of the other ones? Oh, so like we, so there's this idea that's very critical to incentivization called adversarial interoperability. And this is a technical term and no one understands what it means unless you're already someone who understands what it means. And so we came up with this thing called competitive compatibility or com com, which we thought would be fun to say no one liked it. In the end, I didn't like it. But adversarial interoperability, it's like it's super important.

5:52It's when you take a thing that the manufacturer has designed in a way that doesn't suit you, probably in a way that harms you with the manufacturer's benefit. it like say a printer that can only take ink from the manufacturer and you modify it right so it's making so that it can use other people's ink and so making it use other people's ink that's interoperability doing so against the wishes the manufacturer's adversarial and like you know it's a kind of a bedrock that like if you own a thing you should decide how it works even if that upsets the shareholders of the company that made it you know they're like so emotionally fragile that they can't bear to think that the people who buy their products will use them in ways that benefit them at the expense of the shareholders, then maybe they're in the wrong line of business because it is yours and you should have the final say over it.

6:38So let's flesh out this idea of inshittification, which you explore in your book. And you're telling inshittification doesn't happen immediately. It is a process. So if you could briefly walk us through this process of how something becomes in shitified. I'm still getting used to saying that.

6:58Dysinshitification, inshitification, inshitificatory, inshitogenic, disinshitificatory, and so on and so on. So, inshitification has kind of got three parts. One is like a description of how platforms go bad. One is a theory about why they're going bad. And one is a proposal for how to make them better. So, the first part, this description of how platforms go bad. It's a three-stage process. And in stage one, platforms are good to their end users, but they're also trying to find a way to lock those end users in. And then once the users are locked in, they make things worse for those end users in stage two.

7:35And because the users are locked in, they know that they can turn the screw without risking those users' immediate departure. And so they make things worse for those end users in order to take something from them and give it to business customers who get lured in. That's stage two. In stage three, those business customers who've been locked in as well, because they're now dependent on those end users, they have all the value withdrawn from them as well. The platform harvests all the value from users, all the value from its business customers. It leaves behind kind of the barest kind of homeopathic residue of value needed to keep users locked to the platform, businesses locked to the users, and delivers all that value to themselves, to the shareholders and the executives.

8:13So put it into concrete terms for someone who is just new to this term. You have a lot of case studies in your book. Walk us through step-by-step that happening at a big tech company. Yeah, let's talk about Facebook. So 2006, Facebook goes beyond American College Kids with a.edu address. They try to lure in people from the general public. Anyone who wants social media at that point already has an account on a rival service called MySpace. So Mark Zuckerberg makes a pitch to those users. Look, I know you love your friends that you hang out with on MySpace, but I don't know if you realize this. MySpace is owned by an evil, crapulant, senescent, immortal vampire billionaire named Rupert Murdoch.

8:47and he's spying on you with every hour that God sends. And like, no one should want to use social media that's owned by a billionaire. And you should especially not want to use social media that spies on you. So come use Facebook. I understand this is quite ironic in hindsight, but we pile into Facebook and we get locked in and not through some of the more exotic tactics that other platforms use, like Uber, for example. They had this guy, Masayoshi Son, who's a venture capitalist, runs a firm called SoftBank, funnel$31 billion in Saudi royal money to Uber so that they could lose 41 cents on every dollar they brought in for 13 years until all the other cab companies had gone in business.

9:22We'd starve public transit investment and they could just like double the price of a fare. So that's like a very difficult, high stakes lock-in strategy. With Facebook, we just lock ourselves in. When we lock ourselves in through a thing economists call the collective action problem, but you probably know as, you know, you love your friends, but they're a pain in the ass. So, you know, you got six people in your group chat. They're your best mates, but you can't even agree on like what bar you're going to go to on Friday, much less like when they and all the people that they are on Facebook for are all going to leave Facebook.

9:50So now that he knows that he can inflict some pain on you because you love your friends more than you hate him, he makes things worse for you. And we get to stage two where he brings in business customers. So one example would be advertisers. He goes to the advertisers and he says, do you remember we told these rubes we weren't going to spy on them? Obviously, that's a lie. We spy on them with every hour that God sends and you give us small amounts of money. We'll target ads with incredible fidelity. And we're such dedicated craftspeople that we're going to fund a whole building full of anti-fraud engineers.

10:21And they're going to do nothing except try and block ad fraud. So when you give us a dollar to show an ad to a kind of user, we're going to find that user and stuff the ad in their face. So advertisers pile in. Publishers pile in. They're told, you know, remember we told these suckers we weren't going to show them things they hadn't asked to see. We will show them your stuff if you put it on Facebook. Just put up an excerpt and a link and we'll cram it into their eyeballs. And so they pile in and they get locked in too. It's very hard to leave once that user base is a significant part of your business.

10:51They become structurally important. And so now Facebook starts to turn the screws on them. And publishers find that they have to put longer and longer excerpts on the platform. Eventually, it's just the whole article. If you want to get shown to your own subscribers, much less recommended to a user who hasn't subscribed to you yet. And if you put a link back to your own website, they won't show it to anyone because that might be a, quote, malicious link. Advertisers see prices go way up. They see ad targeting fidelity go through the floor. Ad fraud explodes. When Procter & Gamble in 2017 zeroed out its surveillance advertising budget with the platforms called programmatic advertising, they saw a 0 % drop in sales because all$200 million was just disappearing down the fraud hole.

11:30So the publishers and advertisers are getting a bad beat. But so are we. The amount of stuff in our feed that we've asked to see has dwindled to almost nothing. and what's being filled in that void is stuff that people are being charged billions of dollars for that they're getting ripped off on too. And now you get to like this stage that they've been shooting for, right? This equilibrium where all the available value has been harvested. But it's very brittle, this equilibrium, because you get one live stream mass shooting or Cambridge Analytica scandal, people bull for the exits, shareholders pound the company's stock, and the founders and the executives, they panic.

12:04Although being technical people, they have a technical term, they call it pivoting. And so Mark Zuckerberg, like, arises from his sarcophagus one morning and says, you know, hearken unto me, brothers and sisters, for I've had a vision. I know that I told you that your future would consist of arguing with your most racist uncle using this primitive text interface that I created to non-consensually rate the fuckability of Harvard undergraduates. However, in this vision, I have realized that the true future is one in which I transform you and everyone you love into a legless, sexless, low polygon, heavily surveilled cartoon character so that I can imprison you in a virtual world I stole from a 25-year -old dystopian cyberpunk satirical novel that I call the metaverse.

12:44And that's the final stage of inshittification. The platform is now a giant pile of shit. Is inshittification quantifiable? Like, do you have some sort of empirical metric or is it just an instinctual sense that this has gotten worse? Like, is there a way if I just log into a random website and I look around and I do I have this epiphany over like, oh, yeah, this is definitely in shitified because I see X, Y or Z. So now you're getting into the the theory part of right now at the description, descriptive part, because obviously we didn't invent greed in the middle of the last decade. So something changed that caused these companies to start doing this extraction.

13:19And my theory is that what changed is that we have this, as I say, in shittagenic policy environment, that our policymakers took decisions in living memory after being warned about the consequences that had the outcome of making it so that when companies mistreat you or mistreat their suppliers or their business customers, that rather than losing in the market by having their profits decline, their workers depart, their customers jump ship, that they gain in the market, they do better. And so in shitification is not just when a platform goes bad. It's when a platform goes bad and does well. And so you could see two platforms, both of which were doing bad things to you.

13:58But I would argue that it's not really in shitifying unless they thrive as a consequence, right? If they fail as a consequence, well, that's just how the market works, right? I'm not the world's biggest believer in markets. I think markets are a useful tool, but I don't think they're the best way of organizing everything. But, you know, I do understand that in the theory of markets, the idea is that when companies do bad, they do bad financially. And, you know, this is a bedrock. Adam Smith and Wealth of Nations, he says, you know, it's not through the beneficence of the baker that we get our bread.

14:33It's through his self-regard, right? The baker is motivated to give you a good loaf of bread because he knows that if he gives you a bad one, you'll buy your bread somewhere else and he'll go out of business. And so when you have that being short-circuited because of policies, and I want to stress here, these are not like nebulous, you know, like a bad idea from a politician. These are very specific policies that had this very foreseeable outcome. When companies can take advantage of those policies to mistreat you and do well, then I'd say that that's in shitified. So it's not really about which of these symptoms they're showing.

15:06It's about what's happening when they exhibit these symptoms. We'll be back with more Corey right after this. Neil, how can a brand inspire enough loyalty in their customers that they won't switch to something new? Well, my suggestion of including clips of my beautiful singing voice before every podcast got rejected. Yeah, imagine that. Telecom brands know all about this, though. They sit at the intersection of current subscribers and new prospects. Amazon ads can reach these audiences together across Prime Video, Fire TV, Twitch, Alexa, and more, helping telecom brands show up where connection truly happens.

15:41With Amazon ads first-party insights spanning streaming, browsing, and shopping signals, telecom marketers can reach valuable audiences. This enables smarter acquisition, cross-sell, and loyalty strategies grounded in performance. To learn more, visit advertising.amazon.com. That's advertising.amazon.com. it's very interesting because i was finding it difficult to wrap my head around incentivification because i was thinking in terms of like a restaurant owner who says i'm going to start cutting costs by buying cheaper ingredients how is that in the best interest yes he will save money in the short term but over the long term you destroy your relationship with your customer hence that's bad for the business so how are companies sitting there thinking that this is the right move to do is to provide a worse experience that just doesn't seem like square the circle for me there.

16:34Why are they even doing this? Well, so there are four things that disciplined companies, this is the term economists use, discipline is like when something bad happens to you because you've done something bad. And there are four forces that discipline companies historically, and we can see how they've all been eroded. So the first one, as you mentioned, is competition, right? It's not, it doesn't matter if you're the only restaurant in town and you serve a bad meal, if there's nowhere else to go, it kind of doesn't matter. People are still going to show up and eat there. I mean, we've all had this experience on the other side of the TSA checkpoint where you really do have effectively the only restaurant in town, right?

17:07And they know that you have nowhere else to go. This is that bit Lily Tomlin used to do on Saturday Night Live where she'd pretend to be a Bell operator, an AT &T operator. She'd do an ad for the Bell system and she would end up with, we don't care. We don't have to. We're the phone company, right? So you understand how that would happen. Now, what happened to competition? It's not a mystery. So these economists that we would call them neoliberal economists, they're the economists sort of associated with Reagan, but they really held sway for like 40 years. They had this radical theory of competition and monopoly, what in America we call antitrust, which is the law that tries to prevent monopolies and break them up when they occur.

17:45And they said monopolies are actually good, that when you see a monopoly in the world, when everyone's buying something from one company, What you should infer is that that company is really good at its job. And wouldn't it be perverse to punish that company for being so good that we all love it by attacking it using public resources? And so they said, just leave the monopolies be. And then to, I guess, no one's surprise, unless you've had that specific neurological injury you can only get by doing an econ degree, we got monopolies, right? And like these guys, they insist that the two are not related, right?

18:18When we observe monopolies in the wild that are quite abusive, whether that's like the automotive sector or intermodal or sea freight shipping, or whether it's like the sterile bags full of saline or hospital beds or coffins. One company makes both all the hospital beds and all the coffins. How's that for a strange little combine? Or whether it's the five publishers, four studios, three labels, two ad tech companies, and one e-book company that dominate media. and we say to them like look at these harmful monopolies look at professional wrestling or cheerleading and they say well how is that our fault right it's like we used to not have a rat problem because we've been using rat poison and these guys were like stop putting down rat poison and now rats are eating our faces off and we go back to them and they say that's not our fault like it's sunspots that have ushered in the time of the rat a moment in which rats are more fecund than at any time in human history and i will stipulate the rats did buy all the poison factories and shut them down.

19:17But look, if we're not using rat poison, that's just economically rational. So they say, oh, it's the iron laws of economics. It's returns to scale. It's the great forces of history. So we got rid of competition. So they don't really worry about competitors. Mark Zuckerberg was able to buy Instagram. Google was able to buy everything. Take away Google's acquisitions. This is a company that can't make a product in-house. Everything they make in-house dies. They've had one really successful consumer-facing product. It was in the previous millennium. It's a thing called search. Everything else they've made has basically tanked.

19:47And what they do is they bought a mobile stack, an ad tech stack, a maps and navigation staff, documents and collaboration, server management, you name it, right? They bought it from someone else and operationalized it. They're not Willy Wonka's idea factory. They're just like rich uncle penny bags, right? They're just buying other people's ideas. Yeah. Yeah. Is big inherently bad, though? Because I'm sitting here as someone who uses Gmail, who uses Chrome, who uses Maps, all of it ostensibly for free. And there's billions of people out there like me. So is it the fact that Google owns it and is big that that makes it bad?

20:25Or if a bunch of smaller companies did the same thing, would that be better? So you're going straight into my next point. Thank you. So there's another force that disciplines companies, which is regulation. So you can think of competition as the discipline of the market. Regulation is the discipline of the state. They're really kind of the same thing, because if you allow companies to merge and merge and merge, and you create a cartel, the cartel does something called regulatory capture. And that's where the companies get the regulators to work for them instead of working for the public. And that's something that's only possible if you can solve, you remember the collective action problem, you and your friends can't agree on when to leave Facebook?

21:03Well, 200 companies can't agree on what they want their regulator to do, but five companies can't, right? And these companies, they're so inbred, they've got Habsburg jaws, right? You have the same executives hopping from C-suite to C-suite to C-suite. They're all godparents to each other's children. They're executors of each other's estates. They're in the same polycules. And they just show up at regulatory fora with exactly the same story. And they have so much capital because they don't compete. Again, when you have a cartel, they can divide up the world like the Pope dividing up the new world, right?

21:35So, you know, Apple gets a 20 billion plus dollar per year bribe every year from Google not to enter the search market, right? So they don't have to worry about eroding one another's margins by directly competing. So they have lots of money to spend on policy adventures. So we don't have to, so what that means is that if the companies use the power they have in the market to abuse you, we no longer have competitors who are acting as a check on their behavior, but we also don't have regulators. The regulators don't step in either. And so you get this combination where you could have a system that was integrated and worked from top to bottom and was quite seamless, right?

22:17And it's not necessary for firms to all be under one roof to do that, although it sometimes helps, but like, you know, all the light bulbs in your house work, even though the light sockets and the light bulbs are all made by different people, like standards are a thing and we can do standards that allow stuff to work. You know, it's very weird when you think about social media that like which network you're on matters as to who you can talk to. That is the most like prodigy, copy-serve-ass technology thing to arrive at that you can imagine. Like imagine if this were like phones where you'd have to care whose SIM was in someone's phone before you give them a call.

22:49That is like a legitimately weird and primitive thing that we've arrived at here. On the topic of Google paying Apple$20 billion a year to be the default search engine, There was this recent antitrust trial and remedy verdict that was passed down on Google search, which was deemed a monopoly. But the judge this past summer declined to wield heavy penalties against Google and said you can still pay Apple and we're not going to hive off any of your business. And the judge cited specifically the rise of AI and chatbots and Anthropic and ChatGPT as true competitors to Google. So they ruled that this was actually now it looked like a much more competitive landscape than four or five years ago when Google when this trial began.

23:35So do you think that the rise of AI has led to a more competitive landscape in search? Well, let me let me just refine that question in two ways. So first is Google didn't just lose one antitrust case last year. They lost three. So they were they were convicted three times of having a monopoly. The other thing is that when the judge talked about Apple specifically, it wasn't because of AI. It was even weirder. He said, Google bribes Apple with$20 billion a year every year. Where will Apple get the free cash flow to come up with cool iPhone features if I stop them from soliciting bribes from their most direct competitor?