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(gentle light music) (gentle dramatic music) - [Announcer] And now the "Cascade PBS Ideas Festival" featuring journalists, newsmakers, and innovators from around the country in conversation about the issues making headlines.

Thank you for joining us for "On The Media" with Cory Doctorow, moderated by Micah Loewinger.

Before we begin, a special thank you to our founding sponsor, the Killinger Foundation.

And our host sponsor Amazon.

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Thank you.

- Hello, welcome to the "Cascade PBS Ideas Festival."

I'm Micah Loewinger, the co-host of "On The Media," a show on New York Public Radio.

And I'm joined by Cory Doctorow, an author.

(audience applauding) Cory is an author and tech activist, and we will be discussing what we will call enpupufication since this is PBS.

But the full title of Cory's book is in "Enshittification: Why Everything Suddenly Got Worse and What to Do about It."

Cory, thanks for being here.

- It's a pleasure to be here.

Thank you very much and thank you to everyone for coming.

- You coined the phrase enshittification to describe a creeping phenomenon you noticed everywhere once user-friendly tech platforms were becoming worse.

Let's use Amazon as an example.

And the irony is not lost on me that we're speaking on stage at the Amazon Meeting Center, but what was Amazon like in the early days when in your view, it worked better for the people who used it?

- Well, the thing to understand is that enshittification is a modification of this idea that if you're not paying for the product or the product, the thesis of enshittification is whether or not you're paying for the product or the product that two-sided platforms go after, not just the end users or customers, but also the business users.

So in Amazon's case, that would be the sellers.

So when Amazon kicked off, we'll remember that they were selling goods at a loss, right?

They had a huge surplus because the capital markets were willing to trust Jeff Bezos with a lot of their money.

And they were able to sell things often below cost.

And certainly when you factored in all kinds of goodies, like free returns and discounted shipping and so on.

It was a great deal for end users.

And so we piled into the platform, and we found ways to get locked into the platform.

Some of us bought Prime.

Statistically, most of us bought Prime.

If you're an affluent household in America, the chances are you've got it.

An absolute majority of American households have.

It means you're pre-buying a year's worth of shipping, which means that for most cases, it would be pretty silly to go shop somewhere else 'cause you've already paid for shipping for the year.

But we also did bought things like digital media, so books and movies and songs and audio books and so on.

And these were permanently locked to Amazon's platform using what's called Digital Rights Management, a kind of encryption.

And in many cases, Amazon doesn't even let rights holders decide whether they want to have that.

It's just mandatory and it's against the law to remove it.

And so once you bought it, you can't leave the platform without leaving behind your purchases.

And over time, what we saw was that the deal for both business customers and the end users decayed.

- Yeah, so you kind of break down and certification into three steps.

- Yeah.

- Step one you kind of just described, which is make a good thing for users.

Here's this amazing marketplace where you can get what feels like anything in the world and it will be sent to you really fast and there's no shipping if you have Prime.

That's great.

Stage two is you squeeze the users to make things better for the business customers.

That would be the sellers, the advertisers, the publishers.

Describe that in the case of Amazon.

- Well, so in the case of Amazon, we saw some of those generous discounts get rolled back.

We saw in particular a kind of sell off of the ad placement or the search placement on the search results page.

So Amazon has this business.

They call it an advertising business, but it doesn't work like other advertising businesses.

They make $38 billion a year selling search results.

And so the first result when you search on Amazon is not the best match for your query.

It's the one who's backer paid the most money to be there.

Now, if you're a certain kind of merchant, being able to buy the Prime spot rather than having to be the best makes a lot of sense.

But for everyone else, it's kind of a raw deal.

That that first box on an Amazon search page on average is 29% more expensive than the best match for your query.

The top row is 25% more expensive than the best match for your query.

On average, you have to go down about 17 places, although it's not exactly 17 places, you can't just count 17 and click it.

But that's about where you're gonna find the best match.

And so this is, you know, a way of making things much better for business customers at the expense of end users and ultimately at the expense of the best businesses who are selling on the platform.

- Which brings us to stage three of enshittification.

The platform then squeezes the businesses so that all of the value goes to the platform and its investors.

- Yeah, and so we see this with Amazon.

So Ken Racine, when he is AG of Washington DC launched a case against Amazon on the basis that they were both formally and informally binding their sellers over to something called a most favored nation deal, where you had to sell on Amazon at your best price.

But at the same time, Amazon was adding junk fees.

So fulfillment fees and listings fees and so on, to the point where 45 to 51 cents out of every dollar that was being brought in on the platform by third party sellers was going straight to Amazon.

So that was the Amazon tax.

Now, very few firms have a 51% margin that they can afford to give to a distributor.

And so in order to make that up, they had to raise their prices.

But because of this most favored nation deal, when they raised their prices on Amazon, they had to raise their prices at Target and at Walmart and at mom and pop shops, and even at their own website or warehouse store.

So the price went up across the economy because of this.

So this is not only turning the platform into a pile of shit.

This is enshittification, enshittifying everything.

This is really what antitrust law was built around, right?

Was this idea that if you don't publicly regulate markets, then you'll have private regulations of markets.

You'll have individual billionaires who are gonna decide what's for sale, how much it costs, where you can buy it, and whether you'll ever find out about it.

- To that point, you've pointed this to this great example of diapers.com, which was at one point a competitor to Amazon doing what it sounds like delivering to you diapers on a subscription.

- Amazon didn't go from dominating books to dominating every retail sector by being the best retailer for it.

They did it by buying the best retailers in those sectors, and then they came to a company called diapers.com and no prizes for figuring out what they sold.

And diapers.com said, no, we've got a tidy business here.

We don't wanna sell to you.

And so Amazon lit a couple hundred million dollars on fire selling diapers and other goods from diapers.com below cost until diapers.com lost the war.

And they sold to Amazon, no one would say no ever again.

And that's pretty much what happened.

- So I think if we maybe had an Amazon spokesperson on stage and they were responding to you, they might bristle at you saying that people are trapped on Amazon.

It's not so hard to cancel Prime.

And there are also other online marketplaces where you can buy stuff, right?

It's not like Amazon is run everyone out of business.

And more than that, millions of people use it, generating billions of dollar of revenue.

So this sounds like a very successful business that people like to use.

- Well, look, there's nothing wrong with intermediaries per se.

Look, I'm a mostly a writer.

I write books.

And there are writers who manage to write their books, edit their books, sell their books.

And there's nothing wrong with publishers, booksellers, distributors, marketers, all the people who are bring books between writers to readers or bring goods and services between providers and consumers without it.

The problem is that when a firm that is there to intermediate to be a help meet, to facilitate usurps the relationship between the producer and the user of a product or a service, then they're able to choke it off, right?

And there are aspects of Amazon's business that are very admirable.

They've managed some really incredible logistical challenges.

They've done some amazing feats of IT.

My background is in IT.

I look at much of what they've done.

I find it very admirable.

But I think it's hard to question that Amazon has wrapped itself around the economy, right?

That, you know, for example, Prime shipping costs Amazon nothing.

They make so much money cornering their sellers into selling through Prime that the entire cost of shipping is offset.

So when Amazon sells you a made by Amazon good, and they ship it to you, they bill that shipping to one of their rivals who sells on their platform and effectively, right?

Not literally, but they're making so much money from the high margins they get by corralling people into it.

And if you ship with someone else, even if you have a shipper that is comparable to Prime, that delivers as reliably and in the same timeframe, Amazon won't put you in the top of those listings, and so you'll effectively be invisible.

So there's this guy Prabhakar Raghavan, who was the revenue czar, and he had come to the company from McKinsey by way of Yahoo, where he'd overseen Yahoo search decline from 90% market share to 0% market share.

So Google hired him and put him in charge of revenue.

And he had a brilliant idea.

He said, well, we do all these things to make it search more accurate.

Like we sometimes will search for synonyms of words you've typed or alternate spellings of words you've typed to helpfully suggest things in the background.

You won't even see it.

We're just doing it because we know that when people search for trousers, they might be looking for pants and so on.

What if we just turned all that off?

And then you might have to search twice or three times to find out what you're looking for, and we get to show you more ads every time you run a query.

And his rival was this guy Gomes, who was an engineer, and he had been with Google since the earliest days.

He built out their server infrastructure.

And he was like, no, I think that's a terrible idea.

And you know, I think we're here to provide good search tools.

And you see in the memos, this fight between these two factions.

And in the end, you know, money talks.

They figured that they would goose their search revenue and goose their search revenue growth and make Wall Street happy by making search worse.

So, you know, yeah, Google is bad these days.

- And they purposefully made it bad to make more money.

And they did.

It worked.

- And they did.

And they continued their growth story that Wall Street continued to reward them with a very high price to earnings ratio.

- We have limited time.

Oh, let's talk about the nursing industry.

- Okay, go for it.

- So algorithmic waste discrimination has metastasized out of Uber and into everything that describes itself as Uber for whatever.

And one of the Uber for whatevers is nursing.

Three giant apps now have replaced what used to be dozens and dozens of staffing agencies that brought in contract nurses for hospitals.

And one of them, at least one, it's a very opaque process.

But at least one of them, when a nurse clocks on for a shift, gets that nurse's credit history.

And if that nurse is sitting on a large amount of credit card debt, especially delinquent debt, that nurses offered a lower wage, because people who are facing looming debt will work for less money, right?

So this is algorithmic wage discrimination 2.0, and it's coming to any instance in which you are paid through these spot markets where it's very opaque and hard to see and where you're misclassified as a contractor and so on.

And so, you know, like, part of that story is that you can buy anyone's credit history from this unregulated data broker sector.

- I'm not an economist, but I would assume that these companies that are getting worse would eventually encounter a competitor.

Why hasn't there been more competition?

- Well, that's the crux really of the enshittification hypothesis that it's not that these are worse people.

In many cases, the people running these companies are the same people who ran them when we really I think faithfully recall them doing good things.

We weren't hallucinating it.

Google was good, Facebook was a nice place to talk to your friends, Amazon gave you a good deal.

All the rest of it at one point, right?

Right, it used to be that they had competitors, but you have things like Mark Zuckerberg, right?

Who confronts the possibility that Instagram is gonna take away as users.

And so in the, you know, 2010s, Instagram comes along and people start to bolt for the exits.

They leave Instagram or Facebook and they go to Instagram, and Mark Zuckerberg tries to buy Instagram for a billion dollars at a time when they have 12 employees.

And his CFO is like, "Mark, are you nuts?"

And Mark Zuckerberg, a man fully committed to putting down his worst plans in writing where they can be discovered by government lawyers, sends an email to his CFO going, "Well Bob, as you know, this murder is fully premeditated."

He says, "The reason we're buying them is because people like Instagram more than they like Facebook.

And so if we buy Instagram, then they'll stop being Facebook users, but they'll still be customers of Facebook, the platform, they'll still be locked to us.

And so they'll have nowhere to go."

And so you see these barriers to entry being built.

They're being built often in contravention of the black letter of our antitrust and competition laws.

And until fairly recently, we didn't see much enforcement of those laws.

And so competition went away.

Companies just stopped worrying about their competitors.

- You've talked a little bit about antitrust woodstock.

This is the fact that Google and Facebook have been facing investigations from the government in the same- - Trials.

- Trials, excuse me.

- Trials, yeah.

So this is a really remarkable thing.

All over the world, there has been an enormous upsurge of interest in antitrust, in competition law.

This thing that dates from the late 19th century, you know, the Sherman Act of 1890 was passed by Senator John Sherman, brother of Tecumseh Sherman.

That's how vintage this stuff is.

And you know, it's largely been in a coma for about 40 years.

But of course, you know, if you allow firms to amass a lot of power and then they raise prices, they will insist, well, we didn't raise prices because we have power.

We raised prices because energy went up, or labor went up, or you know, the moon is in Venus.

And it's then up to you to try and prove it.

And of course, if you let them amass power, they have more power than the government, and then it becomes very hard to break them up.

It's the kind of thing you wanna do early on.

And so we have seen this incredible revival of antitrust.

Last year, we got this massive new set of powers for our competition regulator.

It's in the UK, in the EU, in South Korea and Japan, and in China.

There have been these massive surges of antitrust enforcement, lawmaking, new policymaking, new investigations.

And what's wild is that like none of this is being driven by billionaire dark money.

But Trump is making the mistake that the Grinch made when he stole Christmas, right?

The Grinch thought that the Whos in Whoville saw the tinsel in the balls and then Christmas entered their hearts.

What he didn't understand was that the reason they hung up the tinsel in the balls was that Christmas was in their souls, right?

Trump thinks that the reason that we all got interested in breaking up corporate power is because Lina Khan did something about it.

The reason Lina Khan was able to do something about it is because we cared, right?

And that doesn't go away when he fires Lina Khan or illegally fires Alvaro Bedoya and Rebecca Slaughter from the FTC and so on.

That energy is still there.

- Antitrust is one way we might challenge enshittification.

You are kind of on this other train that's pretty counterintuitive.

We're gonna unpack it.

- [Cory] Yeah.

- Tariffs, you think potentially tariffs could chip away enshittification?

- Yeah, here's the thing.

When life gives you a sars, make sarsaparilla.

So all over the world, for about 20 years, countries have been pressurized by the US Trade Representative to adopt a law that mirrors a law that we got here in 1998 called the Digital Millennium Copyright Act, DMCA.

Bill Clinton signed that law in 1998, Section 1201 of the DMCA, I'm sorry for the alphabet soup here.

But Section 1201 of the DMCA makes it a felony punishable by a five-year prison sentence and a $500,000 fine to tamper with a digital lock, right?

So if there's a digital lock that stops you from moving your Kindle book to a Kobo.

Even if you are legally allowed to move the Kindle book to the Kobo, removing the lock to do so becomes a crime.

Now if you're America, that sucks because most Americans are not shareholders in the companies that do this, but at least all those companies are listed on the American stock exchanges.

So if you're an American investor, it's like, it's good for your GDP.

If you're anyone else in the world, all this means is that you are allowing American companies to pick your own people's pockets to steal their privacy because like, you can't install a privacy blocker if you have to remove a digital lock to do it.

- Okay, let's unpack a little bit of what you just said.

Basically, if I have this right, the United States used the threat of tariffs to coerce countries into passing copyright laws that would force them to kind of protect American tech dominance abroad.

- [Cory] Yep.

- Now that leverage is way gone.

- Totally.

- There's no reason for these companies to prioritize American tech at the expense of their own consumers.

- Exactly.

- So you think that what we could see is basically an explosion of competition in Canada, Europe, Mexico, wherever that would threaten Amazon, Google, Facebook, whatever, - Apple, - Apple, Microsoft, - to our benefit.

- Yeah, well, 'cause we're gonna import it.

Look, we don't have to confine ourselves to importing reasonably priced pharmaceuticals from Canada, right?

We can also bring in the tools of technological self-determination.

Anyone who can process a payment and get an internet connection can buy software from anywhere.

You know, we don't have a great firewall of America yet.

And if we do, I've got a VPN to sell you.

So you know, I think we're like, I think that we will be beneficiaries of these tools, absolutely - I guess, I want to- Let's use an example.

- Sure.

- So that everyone can kind of sink their teeth into it.

You've pointed to this app called the OG app.

It was created by a couple teenagers.

It was a kind of jailbreak of Instagram.

- [Cory] Yeah.

- Tell us more about it and then - Yeah, yeah.

- explain how that could be a blueprint for what.

- Yeah, so these two teenagers, they got sick of how Instagram worked.

They remembered the old good Instagram.

They wanted a new good Instagram.

So they did what Mark Zuckerberg used to do.

When Mark Zuckerberg kicked off, his biggest problem was that everyone who wanted social media was already on a network called MySpace.

And you know, he was like, well, you should stop using MySpace and come use my service because my service like MySpace.

But I promise you, we'll never spy on you.

That was the initial pitch that Mark Zuckerberg made to MySpace users.

But even that pitch was not good enough because as good as his privacy policy was, your friends weren't there.

And there was a limit to how many times you could reread the privacy policy before you got lonely.

So he gave everyone who was on Facebook and also on MySpace, a little bot.

And you gave that bot your login credentials, your login and password.

It would go to MySpace several times a day, grab all the messages waiting for you there, put them in your Facebook inbox, you could reply to them and it would push them back out.

So they made an Instagram client that would throw up a little web browser where you'd log into Instagram with your login and password.

It would grab the little authentication token, the cookie, put it into their app, and then it would go to Instagram and grab everything waiting for you on Instagram.

And it would throw away all of the ads.

It was on the app stores for one day.

It was in the top 10 of both app stores within a day.

And that day, Meta sent a complaint to Apple and Google.

And because there was honor among thieves, they both took it down.

Now, if you could just circumvent, if you could just jailbreak, if you could just go around the digital locks, we could just have that app on all of our devices right now.

It could actually just work with the official Instagram app.

It could just watch what the Instagram app was doing and pull stuff out of it.

They could be much more aggressive about how they did it.

But because we have this law that says, well, once you put a digital lock on something, it's against the rules to change it.

We've created a kind of felony contempt of business model where doing things that displease shareholders but have never been prohibited by any legislature become a crime.

And so this is the opportunity that we have here, is to move from a regime in which what you can do is limited by things that please the shareholders of large firms to what you can do being all of those things that legislatures permit that your elected representatives has said you should be allowed to do.

It's a much better regime, I think.

- You've been talking about enshittification for a couple years now.

It was dubbed the word of the year by few organizations including the American Dialect Society.

I think it's fair to say, it's kind of forevermore, a part of the tech journalism Silicon Valley lexicon.

- Yeah.

- Do you think that putting a name to this phenomenon has led to some kind of demonstrable change?

- It has certainly taken what was here for a very abstract technical discussion about what's going on, right?

It's hard to be a good tech critique because you have to understand what's going on technologically.

You have to understand these policy, different policy, overlapping policy lenses, privacy law, competition law, copyright, and so on.

And it's really turned this very nuanced critique into something that a lot more people have their heads around.

I'm not gonna say that it's fixed anything yet.

- But the companies that you write and talk about, they're paying attention, right?

- Yeah, sure.

David Risher the CEO of Lyft.

He used the phrase in his report to his shareholders this year.

And you know, we've seen other CEOs take up the mantle.

I think at its root enshittification is a thesis about constraint.

It's not about individual bad guys, although there are some really bad guys involved.

And you know, I'm here to make fun of them all day long.

I don't think it matters which person is sitting in Mark Zuckerberg's seat.

If the law is set up to allow Mark Zuckerberg to create a kind of felony contempt business model out of that world, you know.

That it is the constraints on the firm, right?

The punishments that he faces.

You know, a VCs fund companies and they want their maximum return, but the maximum return you can get from a company, you know, in a kind of platonic universe is you sell your products for infinity dollars.

You put $0 into producing them and you don't pay any workers.

And we understand that you can't really do that.

That no one would buy it, no one would produce it, and so on.

You are constrained, right?

By the willingness of workers to work, by the willingness of consumers to buy, by the willingness of regulators to tolerate substandard products, by the response of other actors, tinkerers, who might make jailbreaks or mods or privacy blockers or what have you.

We remove those constraints.

And the same investors, the same firms that were never perfect, and many of which I have very sharp words for, but which were substantially better than what we have now.

Those firms acted worse.

And you know, when Lena Khan was chair of the FTC, she said, "These companies, it's not that they're too big to fail."

It's not just that they're too big to jail.

It's that they're too big to care.

And that is ultimately what enshittification is about.

The fact that giving people a minor license to be just a little profane has roped a bunch of normies into what used to be a pretty obscure domain of policy, albeit one that I've devoted most of my life to.

I've worked for the Electronic Frontier Foundation now for 23 years.

That is really given me a lot of heart.

I think that it's a mistake to be an optimist or a pessimist, which is to say, to think that the world will get worse or better no matter what we do.

I think the world gets better when we act.

And if you can spy a way to act, to improve the lie of the land, you may not be able to see how you get from there to the end, but at least you can see how you'll get to the next step.

And from there, you might see new terrain that you couldn't see from where you were when you started.

(audience applauding) Thank you.

- That's a great place to end.

Thank you, Cory.

- Anytime.

- Cory Doctorow is an author and activist with the Electronic Frontier Foundation.

His latest novel, he writes books, is titled "Picks and Shovels," and his new CBC podcast series is called Understood: Who Kill the Internet?

Thank you all.

Thanks so much everybody here.

- Thank you.

(audience applauding) Thank you very much.

(gentle dramatic music)