Did Big Tech Ruin the Internet? with Cory Doctorow

0:00Running a business means juggling a lot of moving parts. And when your communication tools can't keep up, things start to slip. Missed calls, slow replies, scattered conversations. They're not just frustrating, they're lost opportunities and revenue left on the table. That's where Quo comes in, spelled Q-U-O. Quo is the number one rated business phone system on G2, trusted by over 90 ,000 businesses. One shared business number for calls and texts, so every conversation stays visible, organized, and accountable. It works from an app or computer. You can keep your existing number, add teammates, and sync your CRM, letting you scale without adding complexity.

0:43And with built-in AI, Quo logs calls, summarizes conversations, and flags next steps, even after hours. Stop missing customers. Stop leaving revenue on the table. Try Quo free and get 20 % off your first six months at quo.com slash tech. That's Q-U-O dot com slash tech. Quo. No missed calls. No missed customers. Shipping, billing, admin, payroll, marketing. You're managing all the things. So why waste time sending important documents the old-fashioned way? Mail and ship when you want, how you want with Stamps.com. Print postage on demand 24-7 and schedule pickups from your office or home. Save up to 90 % with automated rate shopping.

1:30That's why over 1 million small businesses trust Stamps.com. Go to Stamps.com and use code PODCAST to try Stamps.com risk-free for 60 days.

1:42To understand the economy, you have to understand human nature. This podcast is powered by Acast. How are you doing there? It is time for the podcast. Now, it's not every day that the podcast brings you a man who has coined a term that was named Word of the Year in 2024. but the word is in shitification how things and how everything has gone to shit and basically what this is it's describing your relationship with social media platforms started out great you thought they loved you then suddenly you see advertising you didn't think you would basically get then suddenly your data has been harvested for somebody else then before you know it the experience is shite.

2:38Corrie Doctorow is an amazing thinker, a science fiction writer, an internet philosopher, and he is on the line now to explain the word, the book, the concept in shitification. Let's go to Canada and talk to Corrie Doctorow. Corrie Doctorow, welcome to the podcast. Great to see you. Nice to see you too. Thank you for having me on. Now, Corey, n-shittification has not only struck a chord, it has become a word of the year a couple of years back to describe what people are feeling about their experience with internet platforms. Explain to us what is n-shittification? What is the feeling? What is the experience, number one?

3:28And number two, how does this happen? So to talk about intrudification, I have to provide just a little bit of context or background here. For now, I'm in my 25th year working for an American nonprofit called the Electronic Frontier Foundation, a digital rights group. I was their European director for a while. If you're in Ireland, you may know a sister group of ours, the Digital Rights Ireland and the work Johnny Ryan did when he started it there. Yep. And getting people to care about digital rights, it's hard because digital rights are very abstract and they're very technical. And the policy questions typically are about things that are going to happen in a long time if we take this bad decision now.

4:04And so, you know, for like extremely good reasons, people are more interested in things that are immediate and concrete. And they prefer them to things that are abstract and a long way away. But of course, the only way that tech will become concrete and immediate is if we do nothing about it for so long that eventually everything's on fire. And so ideally, you'd like people to sort of recognize the salience and take action before we get to that point. And to do that, you come up with analogies and you come up with framing devices and you come up with parables. And I'm a science fiction writer, so I sometimes write novels, but also sometimes you come up with a dirty word.

4:41And it turns out that dirty words are just incredibly successful. People really love a minor license to vulgarity. And so I came up with this dirty word. And ironically, a little behind the scenes stuff here, you just had some internet problems. I coined it because of internet problems. I was on vacation in Puerto Rico with my family. And we were staying in a little cabin in a cloud forest that had microwave internet access. And the one thing you'll know if you know anything about microwave internet access is that it cannot go through clouds. And we were in a cloud forest. And so I was trying to like look up restaurants in town that was like an hour away on this very tricky, muddy road before thinking about whether we were going to go into town for dinner.

5:24And I was using TripAdvisor and TripAdvisor wants to load about 70 trackers. And I get about 40 of them loaded before any content ever, ever shows up. And then TripAdvisor would just time out. And the only thing you would see in the browser was just their icon that would normally show up in the tab that's called a Favico. and after like a day of this, I posted a bad temper tweet and I said, TripAdvisor is the most inshittified website I've ever used. Has anyone at TripAdvisor ever been on a trip? And people sort of laughed at the little jest there, but then they dropped it. And later on when I was writing about platform decay, I needed a word.

6:02And I remembered that there was this little ripple of reaction when I said inshittified and I thought, okay, that's what I'm going to use. And the reason I tell that is not just because it has this tie in with this moment where you had to log out and log back in here, but also because it shows you that it's not just the minor license to vulgarity. If that was it, then after I made that first tweet, people would have just gone on using it. It is, in fact, this kind of theory that I attached to it. And that theory comes in three pieces. The first piece is a description about how platforms go bad.

6:33So first, they're good to end users. They lock end users in. In part two, they know that the users can't leave, so they make things worse for them to make things good for business customers. They lock them in too. And then knowing that they can't leave either, they make things worse for everyone and turn into a giant pile of shit while transferring all the value to their shareholders and their executives. But the more important part is like, why is this happening now? Because obviously we didn't invent greed in the mid-2010s. So what is it that caused all of these tech bosses to go bad? because even the ones that are demonstrably terrible people, like Mark Zuckerberg, right?

7:08Mark Zuckerberg founded Facebook to non-consensually rate the fuckability of undergraduates at Harvard, right? From his dorm room. He got worse after that. If you read Sarah Wynne Williams' wonderful memoir about working at Facebook, you will learn that Mark Zuckerberg, among other things, cheats at settlers of Catan. He's just a rotten person. And another bit of Irish color here, Sarah Wynne Williams, in order to work at Facebook, had to sign a contract in which she agreed that she would never say anything about her work. There was non-disclosure. She'd never say anything bad about the company that's called non-disparagement.

7:42And that if she violated either of those two, that any dispute would not be heard by a judge, but by a lawyer who works for Facebook. That's called binding arbitration. And that lawyer has fined her$111 million for being mean to Facebook. And every time she says something else. It's another$50 ,000. So the reason I bring that up is you may have followed that Ireland just fired their data commissioner and replaced them with a former meta executive. Yes. And that meta executive almost certainly signed the same contract as Sarah, which means that Facebook's top regulator in Ireland, which makes them the top regulator in Europe, is probably not allowed to say mean things about Facebook.

8:23And you know why? Because Facebook generates many billions of dollars of tax revenue for The Irish government. Because a tax haven has to be a crime haven, right? Because any company that can pretend it's based in Dublin this week could pretend it's based in Cyprus next week. Absolutely. And probably will base itself in Cyprus next week. But I've also got a personal interest in shitification because earlier this year, my phone started to ring and it was people saying, David, are you advertising crypto on many social media platforms? largely, it seems, directed towards the elderly who might have known you from television many years ago?

9:02And I'm saying, no. And they say, well, actually, it's happening. Right. So the companies, we'll talk about inshittification in a second, but this is a very good example of extreme inshittification. So the companies are showing no care for their customers. They're showing no care for the product that has been forced. They're showing no care for me as the individual whose name is being used. And the only recourse you have is to go to court against a massive, massive company that will string it out for ages and ages and ages. And your choice is, do I spend the next five years of my life fighting platforms rather than they policing themselves?

9:43So explain why this is the extreme version of what we're talking about. So that's a really good example of value being transferred around, right? Right. Facebook has surpluses, right? It returns a surplus to its shareholders in the form of these stock buybacks, which are a form of, until recently, totally illegal stock manipulation. They pay giant bonuses to their executives. They have billions to piss up against a wall on AI data centers. So it means that there is like money available that they could spend on content moderation. Now, I don't know if they could solve all of their content moderation problems.

10:15I kind of feel like solving all of Facebook's content moderation would require infinity money. but they could solve some of them. And clearly they could solve more of them than they're solving now. And you can think of, you're an economist, you can think of there being an equilibrium. How much money should Facebook return to its shareholders versus how much money should Facebook return to its users by hiring content moderators to make sure that they don't lose their life savings? And right now they've put the set point here. And the question is, why did the set point used to be over here at a place that was more beneficial to end users?

10:49Because it really was, right? Mark Zuckerberg, cheats the settlers of Catan, non-consensually rate the fuckability of Harvard undergraduates, used to have a service that we liked. And we didn't like it because we were wrong to like it. We liked it because it was better. So what caused Mark Zuckerberg to move from this posture of, well, originally Mark Zuckerberg's pitch was, hey, I know you're already using MySpace, but I don't know if you realize this. MySpace is owned by an evil, you know, immortal Australian billionaire vampire named Rupert Murdoch, who is spying on you with every hour that God sends.

11:24And if there's two things we know about social media is that you should never use social media when it's owned by a billionaire. And you should never use social media that spies on you. Come use Facebook, we'll never spy on. And we're owned by just a regular guy in a hoodie. And so, you know, what caused him to move from that posture? We really did do it, He really did actually offer a lot of value to end users. And then subsequently to businesses, he made things worse for users. He started spying on them. But then he offered advertisers this incredible deal where he said, give us a remarkably small amount of money and tell us what kind of users you want to target.

11:59And we will use the surveillance dossiers we are now compiling on our users, who we promised we would never spy on, to target ads with exquisite fidelity to those users. We'll track them down and shove the ads right in their faces. and publishers also got this incredible deal. Mark Zuckerberg said, put excerpts from your own website on our website, put a link back to your website. We will like non-consensually cram it into the eyeballs of people who never asked to see it, violate our promise only to show them things that they asked to see. Some of them will click your link and there'll be a free traffic funnel.

12:30And then publishers found they had to post longer and longer excerpts. Advertisers found the prices went way up and ad targeting fidelity went way down. And long before you were being defrauded and seniors were being defrauded with these stories, crypto swindles, advertisers were being defrauded. There was so much ad fraud in the system that in 2017, Procter & Gamble said, we think we're being subject to a lot of ad fraud in these programmatic advertising markets. So they took their$200 million a year spend and they took it to zero. Corey, can I just stop here? What do you mean by ad fraud? Just explain to the listeners what you mean by ad fraud.

13:01That's like people who are like running fake websites where they say, put your ads on our website and we'll show them to real people and we'll get a share of the money whenever a real person sees it. And then it's a fake website that they just have bots click on the ads. So Procter & Gamble thought, well, a lot of our advertising spend is disappearing into this. So they zeroed out their advertising spend from$200 million a year to$0 a year. And they saw a 0 % drop in sales because it was all fraud. It was all fraud. It was all nothing. Yeah, Facebook shifted their priorities, right? From delivering a good service for end users to delivering a good service to business customers to just retaining the value for themselves.

13:40So why did they do it? Well, it's maybe better to ask why they wouldn't have. Because if you're like a physicist, and you're trying to imagine like the perfect experimental setup, you would say, well, imagine a perfectly spherical cow of uniform density on a frictionless surface. And we'll proceed from there in the simplified model. And if you're an economist or a business school professor, and you want to imagine the perfect enterprise, you say, well, imagine a firm that can command infinity dollars for its outputs, but pays zero dollars for its inputs. And obviously that is academic publishing, but other businesses cannot charge infinity and pay zero.

14:18They have to worry about competitors. They have to worry about regulators. They have to worry about employees, right? Consumers, the people who actually buy the stuff. Well, that's competitors, right? They have to worry that consumers will go somewhere else and it's regulators. They have to worry that consumers will call up the person who's supposed to be regulating Facebook in Ireland, which is their global regulatory haven, and say, hey, Facebook is doing something bad, right? So they have to worry about regulators, they have to worry about competitors, they have to worry about what economists would call new market entrants, right?

14:48People who start a new business, because they see that the old business sucks. So like, for example, on the web, 51 % of us have installed an ad blocker that also protects your privacy when you're using Facebook. It's the largest consumer boycott in history. But apps, because of a European law called the Copyright Directive, Article 6, 2001, it's a crime to modify an app, even for a lawful purpose. The reverse engineering is it's self-criminalized. So no one's ever installed an ad blocker on an app. And it's not because the apps aren't bad. They're actually worse than the web. It's because it's a crime to do it.

15:25And so this is why websites are so incredibly horny to get you to use their apps. because an app is just a website skinned with the right kind of IP to make it a crime to protect your privacy while you use it. So you may have noticed that like Facebook almost doesn't work on the web anymore. Instagram totally doesn't work on the web anymore, right? You have to use the app so that they can spy on you. And you know, a couple of years ago, we had some really interesting new market entrants that were tempted into the industry by Facebook's cupidity and their abuse. there was these two teenagers in 2022 they made an app called og app and what it did og like the original gangster like the old school app yeah okay it would take your login and password for instagram and then it would pretend to be you and it would log into instagram and it'll grab everything instagram wanted to show you and throw away the ads and throw away the suggestions and throw away the boosted content and throw away all the stuff from three months ago is being surfaced because it was clicky at the moment and it would just show you the things the people you followed posted in reverse chronological order.

16:26So it was very successful. Within a day, it was in the top 10 of both app stores. And then there's Honor Among Thieves. So when Meta sent a takedown to Google and Apple, they just took them out of the app store. So again, three companies headquartered in Dublin deciding for the world whether we can see this app. And you could see how these two teenagers might have made a lot of money. Because they were giving people something that they wanted. Yeah, they might have paid three bucks a month to just not see all the rubbish on Instagram. And if that strikes you as unfair, and you're like, well, why should they get the value Facebook has built?

17:01I'll remind you of what Jeff Bezos said when he started Amazon and confronted a room full of angry publishers. He said, your margin is my opportunity. Yes. And that, of course, the evangelical disruptors who support all the companies say, well, hold on a second. into the promise of the internet is the idea that where there is sloppy margin, the internet comes, puts the consumer closer to the producer, and away we go. So that's the evangelical free market, you know, econ 101 attitude, right? But they change sides, right? They say, when we do it, that's progress. When you do it, that's piracy. And of course, this was predicted by the noted communist agitator, Adam Smith, who said, whenever men of the same trade gather, they engage in a conspiracy to fix prices, and who said it's not from the goodwill of the baker that we get our bread, but from his self-regard and his fear of a competitor.

17:56And his self-interest. So what you're talking about, Corey, is a massive cartel that is in operating amongst the largest, largest platforms who are now the largest companies with the most value, with the biggest balance sheets, with the most influence all around the world. And they are the process whereby typically a company goes out and tries to be a monopolist, right? I got a product, I want to be the best in the world, I want to eliminate all the competition, and over time I'm going to generate. That process, which is as old as the hills, has been accelerated dramatically to such an extent now that we're actually facing these in shittified monopolies.

18:37Yes, but I want to point out here that this is not because of the great forces of history or the iron laws of economics. It's not even because of the cupidity of these ketamine-addled Zuckermuskian failures who run our internet. It's because of the enxietogenic policy environment created by our policymakers, right? And they work for us. Mark Zuckerberg works for his shareholders, right? It would be foolish to expect him to think about our interests. But we have every right to expect that in Brussels, in Dublin, in DC, in Ottawa, that they're looking out for our interests. And they undertook decisions that had the foreseeable and foreseen outcome of ushering in the Enchitocene by designing a corporate world, an ecosystem, an ecology where the worst ideas of the worst people made the most money.

19:29Give me the listener a concrete example of that. Yeah. Well, I talked about Article 6 of the Copyright Directive, making it illegal to modify a product. So when Mark Zuckerberg was pitching people who were on MySpace to come over to Facebook, it wasn't just that they had a better privacy policy. He knew that people preferred their friends to their privacy, right? That as much as they hated Rooker Murdoch, they loved their friends more. And then he also knew that their friends were a pain in the ass. I mean, formally, economists call your friends are a pain in the ass, the collective action problem, right?

19:58Six people in your group chat, you love them to pieces, but they can't even agree on what board game they're going to play this weekend, much less when they're all going to leave Facebook. So he knew that people were going to leave MySpace until they could convince their friends to leave and their friends wouldn't leave until they could convince them to leave and that it was just a vapor law. And so what he did was he gave them a bot and it worked just like OG app. It would go to MySpace several times a day, impersonate you, grab everything waiting for you, stick it in your Facebook feed, let you reply to it there and push it back out again.

20:25But as we saw, when Mark Zuckerberg did that to Rupert Murdoch, that was fair game. But when a couple of teenagers did it to Mark Zuckerberg, he nuked them until they gloat. Right. Yeah, I hear you. And, you know, that was an absolutely foreseen aspect of what's called anti-circumvention law. But even more foundational was the decision to allow this string of anti-competitive mergers, which arose out of what was once a fringe economic theory called consumer welfare, which is the idea that monopolies are efficient, that if you see a monopoly in the wild, you Google has 90 % of the search market.

21:02You should assume that we've all voluntarily signed up to use Google and that it would be perverse to use public money and public power to shut down a company to please the public. This is the Mrs. Thatcher idea that as long as the consumer gets cheaper, the other all is kosher. Well, and this arises out of this neoclassical economic doctrine called reveal preferences, which is whatever people are doing is more important than whether they tell you they're unhappy with it. So if someone flogs their kidney to make the rent, they have a revealed preference for having one kidney, right? And, you know, like this is a thing that makes total sense if you've had this kind of specific neurological injury that causes you to be unable to both perceive and reason about power, which is to say whether you've taken an econ degree that was heavy on macro.

21:48You're preaching to the converted on this particular because I hung out with those guys. I hung out with those people. Yeah. No, I know it. I know it. So, you know, you had this string of anti-competitive mergers. And to go back to Facebook, Facebook bought Instagram. And even among the people who said, you know, monopolies are probably efficient, we should both tolerate or even encourage them. They said, however, if a company is trying to achieve a monopoly, right, not stumbling into a monopoly through excellence, but making anti-competitive mergers, for example, or acquisitions, then we should stop.

22:22them. So in the case of Facebook buying Instagram, Mark Zuckerberg's CFO sent him an email, which Mark Zuckerberg replied to in the middle of the night. And the reply was, you're asking me why we should buy Instagram for a billion dollars when it only has 12 employees and 25 million users, most of whom never log in. Here's why. People like Instagram better than they like Facebook. They leave Facebook for Instagram and they don't come back. If we buy them, then we will recapture those users. They won't be Facebook platform users, but they'll be Facebook corporate users. They'll be users of ours still.

22:55So this is about as close as you get to a memo that says, like, hey, Bob, that guy we're thinking about killing, just so you know, it's a murder. And now that I think about it, I'm definitely premeditating it. And yet, both the commission and the Obama administration waved that merger through, just like they waved through all kinds of mergers. And when later on, Mark Zuckerberg broke his promises, so he promised the commission he wasn't going to spy on Instagram users and merge their data with their Facebook dossiers. They have that incredible temerity to act affronted. This was so foreseeable.

23:29It's like Mark Zuckerberg showed up in Brussels, walked through the door and said, federal wallet inspector. And the commission were like, what? And he said, yeah, federal wallet inspector, hand it over and just took all their money and walked out again. And they were like, you know, I don't think that guy was a wallet inspector. It's so credulous. Let's go back to the why. Is the why because the large platforms, we're talking about Facebook, I want to talk about Amazon in a second as well before we go, but just have the financial, the corporate, the PR, the lobbying firepower to blow all the regulators and the protectors out of the water.

24:10Is that what we're talking about? So, yes, but you could also say that about, say, the oil industry. And yet the oil industry has been eating shit over the last three years as Europe has solarized because it turns out that no matter how tedious it is to argue with that German who thinks that it's unsightly to have solar panels on the balcony when you're shivering in the dark because you don't have Russian gas anymore, you can actually move the ball, right? But I would argue that the tech industry is sui generis, that it has unique technical characteristics that both prevented its inshittification for quite some time and then ushered in its inshittification when those characteristics were overcome.

24:48So the first one is its workforce, right? Which again, something that the Irish public can really understand. This uniquely constituted tech workforce, which was so valuable and so scarce that it commanded enormous power, even though union density in tech is like undetectable, even with a microscope. Yes. Normally, workers only have power when they have that power from solidarity. But they had this power from scarcity. Yeah. They needed all the engineers they could lay hands on. There weren't enough of them. They were so valuable. And there were 10 bosses at the factory gates willing to give your engineers a job if they walked out the door.

25:25And so when they said, I'm not going to shitify that project. I missed my mother's funeral to ship on time. That was it. That was the end of the story. But of course, supply catches up with demand. We've had half a million tech layoffs in the last three years. And now there's 10 workers at the factory gates waiting to take that tech worker's job if they refuse you. So that was one thing. And then the other thing is that the only kind of computer we know how to make is something called the Turing Complete Universal von Neumann machine. Oh, my goodness. Yeah. No, no. Okay, roll out the explanation.

25:59Yeah. So computer scientists use this. You know, Turing was Alan Turing, Bletchley Park. van Neumann was Janusz van Neumann, the Hungarian scientist at the Princeton Institute, and they designed the modern computer. And it is an engine that can compute every valid program. We don't know how to make a computer that just runs some programs. We only know how to make a computer that runs all the programs we can imagine, which means that the computer in your device that someone has installed in a shitifying program into, a 10-foot pile of shit, some programmer who's quit working for Google in Dublin and who knows how Google works could design a four meter ladder made out of code that could be costlessly distributed to every user in the world that would allow them to very easily scamper over that 10 foot pile of shit.

26:45And so this is where the copyright directive comes in. When we made it illegal to do that reverse engineering, we took away that unique and distinctive character of tech that made it so right for disruption and so hard to corner. You know, it's one thing to say, you know, we are going to make the water on the other side of the security checkpoint at Shannon cost eight euros instead of two because it's very hard to get bottled water through the checkpoint, right? Yeah, yeah, can't be done. You do that in the software, right? So say you're HP. Let's talk about a different fluid here. Say you're HP, you're part of a cartel of four companies that control all the inkjet printers in the world.

27:24And you've got software that checks to prevent generic ink from being loaded in the printer. You and your cartel can collude to rig the ink market. You can raise and raise the price of ink until now at$10 ,000 a gallon. It is the most expensive fluid you can buy as a civilian without a license from the government. It would be cheaper to print your grocery list with the semen of a Kentucky Derby winning stallion, right? And you can prevent new market entry because normally you would assume there's a bunch of people going, oh, that margin is my opportunity. But because you can't remove the program, that checks for the third party in, you can't enter the market.

28:01And so again, that unique character that made tech so disruptable was itself neutered by tech giants who captured their regulators. And it starts with capturing the regulators and the monopoly and so on, but it has these unique characteristics. Rarely have I heard the semen of a Kentucky Derby winner being so besmirched as just now. I mean, you know, come on. But I mean, that also does explain to many of our listeners why ink in bloody printers is so unbelievably expensive. Now let us talk, Corey, briefly before we go about Amazon. Because Amazon looms large in people's minds primarily because they can see the old industries that it is destroying on their on their high streets, in their shops, in their bookshops, all that sort of stuff.

28:53They can actually feel, in a way in which you can't really feel Facebook, right? You can feel the geographical, the physical imprint of Amazon on our societies, on our architecture, in effect, on our towns. Tell me the Amazon story. Well, the part of the Amazon story that I think is very useful for people who want to understand the underlying economics of how this works is how Amazon relates to its sellers, not to its buyers, not to you and me, but to the people who load up the platform with goods for sale. Okay. And we all know, even if we don't have an econ degree, we all know about monopolies because we've all played the board game on a rainy day until we wanted to murder our families and ourselves.

29:36Right? Yeah, yeah, yeah. But there is no board game called monopsony. And monopsony is the other side of the monopoly. It's not when you have a powerful seller. It's when you have a powerful buyer. And understand monopoly. Imagine here that there's a road that you go down every day on the way to work, and it's got five coffee shops. You've got your favorite, and that favorite is next to an office building. And the people who work in the office building, they're one in five sales, right? They're 20 % of the coffee shop. So one in five of the coffee shops is your favorite. That coffee shop relies on one adjacent business for 20 % of its sales.

30:14If that business goes under, right, and the sales drop by 20%, well, the coffee shop is out of business, right? They're not going to make rent. They're not going to be able to pay the loans on the espresso machines. They won't make payroll. But you, you're just going to go to a different coffee shop. 20 % of the market means nothing to a consumer, but it means everything to a producer. And so Amazon was able to capture these producers. So they started by offering them a very good deal. They had all these consumers, particularly affluent ones. If you look at the American market because of these string of what are called K-shaped recoveries, where you have an economic collapse and then you have a recovery, but the recovery all goes to the top decile, the 10 % richest people.

30:55Everyone else is getting poorer and poorer. Now we have almost all the consumption. The majority of consumption in the US is in the top decile. And that top decile, they all subscribe to Prime, like 90 % of them. And so that means that if you want to sell to the only people buying, you've got to be on Amazon. because if you're on Prime, you've already paid for your shipping a year in advance. You're not going to shop anywhere else. We know that people who have Prime overwhelmingly start their purchase journeys on Amazon. If they find what they're looking for, they don't go anywhere else. So Amazon knows that it has the whip hand over sellers.

31:27And so while it started by offering sellers all kinds of things, cheap fulfillment, help with returns, subsidies on their products, now it totally commands their business. And it has ratcheted and ratcheted and ratcheted junk fees. on Amazon. We could spend all day talking about all the different ways Amazon abuses sellers, but I just want to focus on one because we're running out of time. And that is what happens when you search on Amazon. So when you search on Amazon, you don't get the search results that Amazon thinks is the best match for your search. Amazon has a business, they call it an advertising business, but it's not advertising, it's search placement.

32:04And what they do is they have sellers bid down their margins to be pride of place on that search results page. The top square, the first one there is 29 % more expensive than the best match for your search on Amazon. The top row is 25 % more expensive than the best match for your search on Amazon. The best match is on the second screen, somewhere around position 17, right? Amazon, when I wrote in Shittification, when I was researching it, that was a 30 plus billion dollar a year business. Last year, it was a$50 billion business. This year, it's an$80 billion business. That is triple the gross revenues of every newspaper in the world combined, right?

32:44That's extraordinary. That is$80 billion they extract to make search worse for everyone. It is not to your advantage to get bad search results. It is not to the advantage of good merchants to have to bid down their margins to go there. You may be asking yourself at this point, where is that$80 billion coming from? Well, they're raising their prices. to be pride of place. They have to. In total, the junk fees come to between 50 and 60 % of every euro you spend. 50 to 60 % is being retained by Amazon. Last year is 45 to 51%. It is growing by leaks and bounds. No one's got those margins to play with.

33:21And so they raise their prices, but you might be thinking, well, if they raise their prices, how is it that the prices on Amazon seem to match the prices in the high street? Yeah. Walmart and Asda and so on. Amazon imposes something called most favored nation status on sellers. A seller who raises their price on Amazon, but does not raise their prices elsewhere is banished to page 11 million of the Amazon search result. And no one ever sees their products. And so what Amazon can do is raise prices across the economy and still have the lowest price. So they made it more expensive at the factory outlet store, at Target, at Walmart, at Asda, at Carrefour.

34:00And they've made it more expensive at the mom and pop shop in the high street. And they've made it more expensive on Amazon. But because Amazon subsidizes shipping and all the rest of it, it's still cheaper to buy it on Amazon. And so that's how Amazon has captured its markets. Corey, before you go, we've just looked at a tiny but absolutely substantial part of Amazon's long-term business. When I woke up the street here in our little town of Dun Laoghaire outside Dublin. And I see the vacant lots, the vacant premises, the pound shops, the nail bars, the Turkish barbers came out of nowhere. By the way, there wasn't a Turkish barber in Ireland five years ago.

34:40Now every barber is Turkish, okay? Well, Erdogan crashed his economy, so everyone had to leave. Exactly. Yeah, the precipitous fall of the Turkish lira is inversely correlated to the expansion of Turkish barbers. The presence of men who will set your ear hair on fire. Exactly. And that's not fun. Yeah. And then cover you with a sort of burning alcohol. Anyway, right. But let's go back to it. What is the prognosis for high streets based on what you've just said about Amazon? Well, I don't think that. So we have this problem, actually. I don't know enough about Irish economic history. But in America, there was this problem once before.

35:18There was a firm called AMP that established the first powerful national grocer in America. And they did this to all the grocery stores in the 20s. And in the 30s, American lawmakers passed the Robertson-Patman Act. And it prohibits the kind of preferential discounting in most favored nation rules that were key to the rise of AMP and the destruction of the regional grocery market in America. and those rules were deprecated by the Reagan administration at the behest of Sam Walton. That's where we got Walmart from. Okay. Everything Amazon is doing is just the perfection of what Walmart did. So we're back to the same game.

35:57Yeah. It's a regulatory capture game. It's an influence game. Yeah. It's a bogus economic theory game. Right. But my point here is that like, it's not like we don't know which policies fix this, right? No one's asking us to invent something new here. This is not like saying, oh, we had these fallen arts of a lost civilization. Like, how do you build a pyramid without power tools? Right? We're going to have to recover that lost knowledge before we can solve this problem. Like, this was in living memory. Like, there are people alive today who enforce the Robertson-Patman Act successfully. Right?

36:31We don't have to, like, invent something new. What we lack is political will. And this is what I want to finish with, is that the political will is reemerging. And maybe it's hard to see. And it's hard to see for the same reason that the wind is hard to see until something gets in its way. But what we've seen over the last seven years is that every time a politician has unfurled even the smallest handkerchief of a sail that had competition law or corporate power as its label, they caught a gust of wind that propelled them out of the doldrums that the fight against corporate power has been becalmed in for 40 years at speeds that beggar the imagination.

37:11We have seen the surge of competition law and anti-billionaire enforcement and policy adventurism in America under Trump one, but also obviously under Biden, not so much under Trump two in Canada and in Canada from prime ministers who are known for being incredibly friendly to corporations. Canada, like all the best Americans, I'm Canadian, Canada in its history had a competition bureau that had brought a total of three merger challenges in its whole history and had failed all three times. But in 2024, Justin Trudeau whipped the caucus to give them the most far-reaching powers of any competition regulator in the world.

37:49The Competition and Markets Authority in the UK did more work in five years under a series of shambolic Tory governments, one of which didn't outlast a head of lettuce than they had done in 40 years prior. We see this enforcement in the European Union. We see it in EU member states like Germany and France and Spain. We see it in Australia, South Korea and Japan, and also in China. And so we don't know what political will is. No one knows what it is when it's at home. You can only detect it when it collides with something. And it keeps colliding with corporate power, right? And it is colliding in ways that, if you're a political scientist, should be the most amazing thing that has happened in your career, because political scientists who study political outcomes will tell you that the policy preferences of billionaires are absolutely dispositive and the policy preferences of the regular people do not matter at all.

38:40If you study quantitatively, empirically, policy choices that legislatures make and enforcers make, you will see that things billionaires don't want never happen and things that billionaires do want always happen. And yet here we are into seven, eight years of policy choices that are antithetical to the project of billionaireism that are popping up all over the world like mushrooms. And so what that tells you is this political will has massed around us. And it is up to us to stiffen the spines of our regulators so that they catch this wind and our politicians so that they catch this wind and do something about it.

39:18And I am weirdly grateful for Trump because he has made the case that we should never trust American technology, that we need something new. And the only way we're going to get that is by challenging the power of these hegemonic corporations. And we're seeing it right now. I'm more hopeful than I've been in 25 years because of Trump. Wow. Kari Doctorow, I will see you in Kilkenny at Kilkenomics in November. I think the listeners will be, and the punters going down to Kilkenomics are in for an absolute treat. We will see you in Ireland in November. Tour de force. Gauri, wonderful to see you. I will see you very soon.

39:55Thank you so much. Thanks, Gauri. All right. Nice talking.

40:04Hi, I'm Darina, co-founder of Quo. If you run a business, you know the team that responds first wins the customer. You've probably opened your phone to a bunch of missed calls and no voicemails. Those are missed opportunities and exactly why we built Quo. Quo is the business phone system that helps your team handle every call and text right away. Join over 90 ,000 businesses that win more customers with Quo. Try Quo for free at quo.com slash tech. That's Q-U-O dot com slash tech. Taking care of your eyes shouldn't be a hassle. That's why Warby Parker is a one-stop shop for all your vision needs.

40:41Our prescription glasses and sunglasses are expertly crafted and unexpectedly affordable. Stop by a nearby store or use our app to virtually try on frames and get personalized recommendations. Did we mention we offer eye exams and take vision insurance too? For everything you need to see, head to your nearest Warby Parker store or visit warbyparker.com today. That's warbyparker.com. Shipping, billing, admin, payroll, marketing. You're managing all the things. So why waste time sending important documents the old-fashioned way? Mail and ship when you want, how you want with Stamps.com. Print postage on demand 24-7 and schedule pickups from your office or home.

41:20Save up to 90 % with automated rate shopping. That's why over 1 million small businesses trust Stamps.com. Go to Stamps.com and use code PODCAST to try Stamps.com risk-free for 60 days.

41:38Wow, Mac. in shite-ification is... In shite-ification. There's so much there. That was fascinating stuff, obviously. Yeah, no, it's great stuff. There's so much in there to kind of digest. This is certainly something that we should come back to. But I mean, I'll certainly corner him in Kilkenomics next year because I have a bunch of questions. Before we go, Corey has just confirmed there, all fair, that he is definitely, he actually absolutely wants to. He said, I love the sound of that. I'm coming to Kilkenomics. If you want to get first dibs on Kilkenomics tickets, particularly someone like Cory Doctorow, which will fly at the door, you know what to do.

42:15Join the crew. It's very simple. Join the crew at davidmcwilliams.ie forward slash crew. You will get ad-free listening. You will get membership of our book club. You will get membership of our Q &A. You will also get an entire free online monetary economics course, and we can learn economics together. But in terms of this conversation, you'll also get first dibs on those tickets, which will be like hen's teeth for Kilconomics, which is the first weekend of November this year, November 628. If you want to see Cardi Doctoral live, you know where to go. And we will talk to you the next time.

43:29Transcription by CastingWords and schedule pickups from your office or home. Save up to 90 % with automated rate shopping. That's why over 1 million small businesses trust Stamps.com. Go to Stamps.com and use code PODCAST to try Stamps.com risk-free for 60 days. That new thing? Yeah, we've got it. The Drop by GNC, bringing you all the newness that matters, hand-picked by the pros who actually know what's up and what's proven to work. We keep you on top of the trends and dialed into what's next. Whether you're crushing it at the gym, leveling up your game, or thriving every day, The Drop by GNC is where the latest solutions in health and wellness land first.

44:09Non-stop innovation and fresh finds daily. Explore what's new and what's next on The Drop by GNC.