Front Burner - Encore: Why the internet is getting worse

Episode Date: December 27, 2023

Does it feel harder these days to find the info you need on Google? Do the Amazon products that show up at the top of your search turn out to be poorer quality than the ones you really wanted? Cory Doctorow calls that 'Enshittification.' Today, an encore of our interview with Doctorow, explaining how the big internet companies have changed their profit-making strategy over time in ways that are making our experience of the internet worse.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Damon Fairless. So, I'm hearing this a lot, and I've definitely noticed it a bit myself. The internet, it just seems to be getting worse. Like, not the whole internet, but a lot of the big websites we use every day.

I'm talking about sites like Google, Facebook, X, Twitter, whatever you want to call it, Amazon. These are behemoths that basically got us hooked years ago because they promised to be awesome, but now they're not really living up to that promise. Like, Google seems to know everything, and yet the search results aren't always great, or even good. Even if what you're looking for is at the top of the results, you still need to sift through the ads just to get it. And that's just one example. Cory Doctorow has a lot more.

And he's got a theory about why that is. He's even coined a term for that theory. In-shitification. Cory's a journalist, an activist, and an author. And his recent novel, Red Team Blues, is about high-tech scams and how financialization turns technology into a force for human manipulation, surveillance, and control. Corey spoke with my colleague Alex Panetta in June when this conversation first aired. Hi, Corey.

Hello. Okay, great to have you here. So I want to start with you explaining this process in three stages, three steps that so many big digital platforms go through. Let's start with the first stage, which is the good stage, the fun stage, the one that I as a user want to exist in. We could use any number of companies to illustrate this, but let's just, let's just pick one, Amazon. So tell me, what does this glorious stage one look like at Amazon? This is the stage where the company is really good to end users and gets a lot of them in the door and then finds ways to lock them in.

So think about Amazon offering below cost shipping, below cost returns, below cost goods, right? A swell, good hearted uncle Jeff Bezos was going to take money from the capital markets and sell you things for less than he paid for them. So that's a, that's as good a reason as any to go and give him your business. And he's also going to find ways to lock you in. Um, those ways should, you know, be as soft as possible because he doesn't want you to run for the exit. So for example, he's going to offer you a great deal on a prepaid shipping called prime. Uh, but of course, once you've paid for a year shipping upfront, you're never going to shop anywhere else. It's, it's like leaving money on the table. And indeed that is the case. Okay. So up until that moment as a

consumer, you're loving this, like you're willingly hooking yourself on that, but that hook, but if you're a competitor, um, you know, of Amazon, this isn't going to be so much fun, is it? So can you, can you walk me through that? Yeah. So the next stage here is for Amazon to lock in its business customers. So there's a really good reason for business customers to want to pile in. You know, if you're a writer, you're going to want to be selling your books on Amazon because they've now captured a huge majority or plurality of the readers because they're offering your products below cost and now they're locked in. So you can't really sell to them anywhere else anyway. So the business customers pile in. At first, Amazon offers them a really good deal.

It offers them like a really clean search. So when you search on Amazon for a specific product, that's at the top of the list. So if I know there's people out there searching for my product and I start selling it through Amazon, it's going to show up. Uh, Amazon also offers, uh, subsidies to my customers for returns and, and so on. And even sometimes sells my products below cost, that's a great reason for me to become an Amazon seller. But once those sellers are locked in, because that's where their customers are, because their products are now locked to Amazon's platform through digital rights management, or because they're connected to the Alexa or in some other way, then Amazon is free

to start putting the screws to those customers. And that's how we get to stage three. Yeah. So the sellers are locked in. Amazon has all the suppliers it needs. The customers are still there. I mean, to me, this sounds like a pretty functional and in fact, a great business. But you say there's this third step involved in how these big platforms get worse. So step three is when Amazon starts to withdraw the goodies that it gave to end users and business customers in order to benefit

itself. So a good example here would be Amazon search. You know, there's a lot of talk these days about search being a duopoly controlled by Google and Facebook, which is now called meta. But whenever anyone says that, someone will pipe up and say, oh, no, Amazon's got a relatively new ad market and it's grown so quickly. It's billion dollars a year this is still a competitive market but amazon's ad market is not like facebook and google's ad market which are themselves no paragons of virtue but amazon's ad market is mostly what in the old days of of radio we used to call payola it's companies that list on amazon paying to be at the top of the search results even if they're not the best match for what you searched for. And in fact, what you end up with is a kind of bidder's war, where the people who are at the top of the results for the thing that you searched for aren't the people with the best match. They're the people who are willing to take the most out of product quality and devoted instead to product marketing in the form of advertising on Amazon. instead to product marketing in the form of advertising on Amazon. So you get, generally speaking, the worst things at the top of the results. So the Washington Post did a good piece

on this where they searched for cat bed and the first five screens of results were 50% ads. The first screen was entirely ads. And most of those ads were for products that were either very poorly rated or not even cat beds, dog beds and other things. So this is bad for you because you're not getting what you're looking for. It's bad for the sellers because they're not reaching customers on the basis of having the best products. And also that $31 billion has to come from somewhere. And while the sellers are going to cut their margins somewhat, they're also going to raise their prices. In fact, they raise their prices across the board today, more than half of every dollar that Amazon brings in from one of those

third-party sellers is capped by Amazon and not passed on to the seller. Wow. So this is a pretty novel framework. So let's recap it all here. Step one, the company hooks in the customer. Basically, it takes a loss to make the product extremely attractive, locking them in for quite a while. Step two, they lock in the suppliers. And finally, in step three, they squeeze both of them, the customer and the supplier for profit and for the benefit of the company or its shareholders. I want to ask you for another example. Let's take a platform like Facebook. And I have to cast my mind back a few years here. The first step was the one where I was with friends, with a bunch of people, and I looked at my feed and I saw what I wanted to see. It was full of updates from people

I cared about. What happened with Facebook? Yeah, sure. So if you remember back until about 2006, you were only able to get a Facebook login if you had an account with a dot edu, which was like mostly American universities or a dot K to 12, which were American high schools. Um, and then in around 2006, they opened it up to the general public and they had a problem, which was that everyone was already using MySpace. Uh, and so they needed a pitch to lure people away from MySpace and they had a problem, which was that everyone was already using MySpace. And so they needed a pitch to lure people away from MySpace. And they had a hell of a pitch. They said, you know, MySpace is owned by Rupert Murdoch, an evil, crapulent, senescent billionaire. And he spies on you with every

hour that God sends. Come to Facebook. We'll never spy on you. All you need to do is show up at Facebook. Tell us who matters to you in this world who has a Facebook account. And whenever they post something for public consumption, that'll be in your feed. And so over time, a lot of people piled into Facebook and, and, you know, with social media, you get a kind of natural lock in effect. It's something economists call the collective action problem, which is to say that when, you know, maybe you don't like Facebook and your friends don't like Facebook, but you like your friends and they like you and you can't all agree

on whether it's time to leave or where you should go or when you should all quit. And so you all stay, you're, you're just holding each other hostage. Right. Um, and, and that creates what economists call the switching cost, which is that if you, if you want to leave, you have to say goodbye to your friends. That's a high cost to pay. And so you all stay taking each other hostage. And sticking with Facebook, I'm interpreting step two in your theory to be when big publishers like, you know, take us at the CBC, for example, you know, we get drawn in and it's made attractive for users like us. users like us. Sure. So the pitch to media companies was like, Hey, if you just put a little bit of, of what you're publishing on your website onto Facebook, along with a link back, we'll turn it into a traffic funnel for you. You know, we lied to those end users when we said we were only going to show them things they asked to see. We're going to non-consensually cram it

down their eyeballs. And, um, some of those people are going to click the link and some of them are going to subscribe to you and Hey, you're going to just end up with another way to bring users to your own website and then they start to boil the frog so you start to notice that all those people who subscribe to you they don't see your post unless you put a much more generous quote from the post maybe maybe so much of the post you may not need to click that link and in fact eventually you have to put the whole post up there and then you start to notice hey if i even have a link back to my website it doesn't get shown to most of my subscribers and now finally in the end stage it's like you know we're not going to show it to your subscribers period unless you pay to boost it and

so now cbc is competing on Facebook with companies that are diverting money from making the news better, right? Improving the quality of their news, their production, their fact-checking, paying their creative workers who go out and produce the news, to the payola to make sure that they are ahead of CBC and the slots available for the feed that you and I have where we actually asked to see the CBC stuff. And so we're all losing here where, you know, CBC subscribers are losing. And so is the CBC. So the website gets worse.

Meanwhile, the screws are getting turned to the publishers after they've hooked in those publishers, which which follows them already having hooked in the customer. I want to dive a little deeper into how platforms carry out these different steps. The first one is easy, right? We like the service. It's clean, simple. It does what we want it to do. But then I want to ask you about how the platforms are gaming users. This is a step two phenomenon. And you use this really helpful example to illustrate this. Talk to me about the giant teddy bear principle. Yeah, sure. So if you've ever been down to the CNE, you know, by about 10 o'clock, if you go down the midway, there's some poor slob who's won a giant teddy bear and he's walking around all day. And that's a teddy bear you win by getting like five balls

in a peach basket. But that guy didn't actually get five balls in a peach basket. Instead, the carny said, Hey, I like your face. Tell you what you got one ball in this peach basket. I'm going to give you a key chain. And if you can win two this peach basket i'm going to give you a key chain and if you can win two key chains i'm going to give you one of those giant teddy bears and the point is that this guy is then walking around all day as a kind of judas goat convincing other people that you can win the giant teddy bear even though there's no fair way to win the giant teddy bear there's you know even if one of the the the raptors was down there throwing the balls, it's, it's not going to stay in the basket because it's an impossible game to win. But this guy convinces you that it's possible. And, um, that kind of control over the rules of the game is something that I call twiddling.

And it's really endemic to digital platforms. You know, the Kearney doesn't have a lot of options to let you win that giant teddy bear, but a digital platform can change the rules from minute to minute. You know, the poor schlub then, or the lucky schlub, as it were walking around the CNE with this teddy bear in, in, in the TikTok example, this is a, uh, an influencer, I guess. have enough sports bros on the platform. You can just take some sports bro and you can use what's called the TikTok heating tool to just stick that guy's videos in front of 20 million people. And so while normally the TikTok feed is the things that TikTok predicts you will like the most, this is the things that TikTok wants you to see. And so they just mix it in. And this guy thinks he's the Louis Pasteur of TikTok. He's running around telling his friends, you know, guess what? TikTok

is an amazing place for sports content. And when they show up and they don't get 20 million views, he's like, you're doing it wrong. Right. And so because you can't see the rules on the backend and because we're so accustomed to um you know living in a deterministic universe where you know you press the lever and a thing happens and that's because the lever and the thing are connected and not because there's a person sitting between the lever and the thing making a decision from moment to moment about whether or not the thing is going to happen when you press the lever this becomes becomes a very, very powerful way to manipulate people. A simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization,

empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years. I've talked to millions of people and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo. 50%. That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Cups. So let's talk about Uber and what happened there.

I mean, it's clearly now in phase three. I mean, unquestionably. How does the platform get what it wants out of its drivers? Sure. Yeah. So Uber, when it started, offered drivers incredible fares, right? They just pay that you couldn't get driving for Co-op or Beck or Yellow Taxi. And they also offered the riders

incredibly cheap rides. And so we all piled in and they had all kinds of ways to do this. They, well, first of all, they just spent tens of billions of dollars of money from the Saudi Royal family that was funneled to them through SoftBank, their VC. But they also had some crazy stuff like if they discovered that a driver was driving for Lyft, they gave them huge bonuses to make them think that they would get a much better deal driving for Uber until they stopped driving for Lyft. And then they took the bonuses away. Now that we're in stage three, Uber wants drivers to stay out on the road, even though they're not paying them a living wage, even though there are a lot of drivers who are driving 40 hours a week, but still have to go on food stamps. And those drivers, they sort themselves into two groups.

There's ants who take every ride and pickers who cherry pick rides. pick rides and uber's algorithm looks for drivers who don't drive as often as uber would like right who aren't out there circling paying for their own gas not getting paid for their time um and and when it so when it finds someone who's acting like a picker it offers them more for the same ride than you would get as an ant and as those people become ants it starts to take away their money. Now, if you're going to become an ant and stop being a picker, it means you're going to stop doing the income generating activity that you used to do that let you be a picker. And it's not necessarily easy to go back to it. If you quit another job, your boss might not hire you again. And so that means that you're stuck being an ant.

And so this is just, you know, another way of kind of doing micro giant teddy bears in order to target people in very specific ways. Yeah. You know, you've described this whole process as the death cycle of these huge digital platforms. I mean, some have indeed died off. I'm like thinking MySpace, but obviously Facebook and Google and Amazon, they're all still here. They're still huge. And they're just, you know, you argue worse than they used to be. Is it possible for a platform to get to that third step and do it just right and avoid scaring users and businesses away. Well, it's just, you know, like it depends on how greedy they are, right? Like if their goal is to leave just enough value in the system that you don't leave,

that's going to be a very, very brittle equilibrium to maintain, right? And one privacy scandal like Cambridge Analytica, one live stream mass shooting, one whistleblower, and you can overnight go from being like, I can't live without this service, even though I hate it too. I hate the service and I'm leaving. And, you know, we see that happening very quickly on platforms where they're being a little less subtle about it. You know, I'm thinking here of Twitter. where they're being a little less subtle about it. You know, I'm thinking here of Twitter. But, you know, it's also happening on Facebook just more slowly. And you see that reflected in the user numbers that they bring to their investors every quarter. Well, I'm happy you mentioned Twitter because, you know, there's a lot going on with Twitter just as a result of the red-pilled edgelord who just bought it. But is this a good example of a platform that's kind of entered what

you would call the the thrashing stage yeah sure i mean you know we we saw this first with facebook when mark zuckerberg was like well user numbers are down i guess the future is we're all going to be legless sexless low polygon heavily surveilled cartoon characters and an idea i lifted out of a satirical dystopian science fiction novel that was published a quarter of a century ago. Oh, hey, Mark. Hey, what's going on? Hi, Mark. What's up, Mark?

Whoa, we're floating in space? Uh-huh. Who made this place? It's awesome. Right? With Twitter, you get all these things that are just, you know, clearly very ill-conceived. Like, I mean, some of them are just bananas, right? Like, what if I stop paying my bills?

I just won't pay rent. I will accumulate all kinds of policy debt, right? Like, what if I stop paying my bills? I just won't pay rent. I will accumulate all kinds of policy debt, right? I'm going to rack up fines that are yet to be realized, but which will surely be levied against the company for not obeying my FTC consent decree or for failing to do something else that I'm legally obliged to do, like block Nazi symbology in Germany where it's against the law. So a lawsuit was filed by Hate Aid, which is a digital rights organization, as well as by the European Union of Jewish Students. They argue that the social media platform is failing to enforce its own rules when it comes to content moderation and hate speech, especially anti-Semitism and Holocaust denial.

As a reminder... And, you know, he's trying to run across the river on the backs of alligators without losing a leg. And you can do that for a while, but you can't do it forever. Okay, so I want to ask you about policy suggestions and possible solutions. But before getting there, I just want to maybe play devil's advocate here for a second and question whether the Internet really is getting worse. Like, you know, nowadays I'm talking to my family around the world for free. I mean, thanks to WhatsApp, I'm now designing computer games, simple ones. I'm doing data analysis and I have like zero

computer coding experience, but I'm doing it, all this stuff that I've never even dreamed of. Thanks to AI, I'm using chat GPT and Google Bard. So is the internet really worse or worsening, or are we talking about maybe just a few platforms, uh, becoming slightly more annoying to use? Well, you know, the, the, the web is like five giant websites filled with screenshots of text from the other four, as Tommy Spinn likes to say. And, um, you know, a lot of the companies you just named are the companies that made the web into that.

And so, you know, if they're going to be our permanent unelected technology czars and decide how we use the net forever, then I think it would be pretty naive to assume that they're not going to make the same mistakes over and over again. It's not like they changed. They certainly haven't learned any lessons. They've never shown up and said, you know, mistakes were made. Um, they're just like,

no, we're, we are evolving and improving, uh, at every stage. What we did last time was great. And what we're doing next is even better. And in fact, the reason you should trust us to do what we're doing next is because of the huge successes we had doing it last time. Before doing this episode, a few of us on the FrontBurner team were talking about whether there were any examples of big digital platforms that haven't succumbed to this unhappy cycle you described. One of the very few anyone could come up with was Wikipedia. And over the years, it's just gotten better and more and more information keeps getting added, still perfectly usable. So do you think that's just because it's a nonprofit organization? Why is that? Why is Wikipedia better when everything else

tends towards getting worse? Yeah, so it's not just a nonprofit. It's a nonprofit organization. Why is that? Why is Wikipedia better when everything else tends towards getting worse? Yeah. So it's not just a nonprofit. It's a nonprofit that's not run by a benevolent dictator. You know, Jimmy Wales pretty early on, he's the guy who started Wikipedia and who did run it as a benevolent dictatorship at first, just had the intelligence to know that he wasn't infallible and that Wikipedia, if it was going to be a success, would have to be answerable to its stakeholders. And so the

Wikimedia Foundation and the councils of Wikipedia editors and users that are in charge of how Wikipedia evolves and what it can and can't do are able to not be perfect, but at least be principled, right? At least be oriented around preserving Wikipedia as a institution of public utility instead of an institution of maximum value to shareholders. of maximum value to shareholders. When people ask, why don't we have advertising in Wikipedia?

So there's a lot of sort of very practical reasons, but one of the reasons is when you're at Wikipedia, I want your experience to be, it's a place of quiet reflection, of learning, of thinking. From the Wikimedia Foundation, I don't take a salary and I also don't even take expenses. I think it's very important that I'm able to say quite clearly, look, when I'm asking you for money, I'm not asking you for money for myself. I'm asking you for money for the Foundation, which is the team who supports this amazing community that I'm a part of.

So according to the Doctor O theory of in-shitification, a company has to be big to begin this cycle, like really big. Because if it hasn't gained a monopoly status, it can't just shift from step one to step two because users and customers are just not going to stick around. They'll leave. They'll take their business attention, time, effort, whatever over to the next platform. So if we don't want to see these websites that we're using get lousier and lousier, isn't this just kind of a matter of dealing with the fundamental problem, which is monopolies? Well, yeah, I think dealing with monopolies is the most important priority is, is, uh, uh, the, the right way to look at this for lots of reasons, not just in shitification, but, you know,

one of the reasons that we see lacks privacy enforcement, for example, is that monopolies have so much money that they can lobby to stop privacy law from passing. And then if it does pass, they can lobby to keep it from being enforced. And, you know, you see various versions of that in the U.S. It's never passed. And in Europe it passed, but it wasn't enforced. And, you know, Canada does not have a good antitrust framework, a good pro-competition framework. Its law is very poor. But Canada is actively considering revisions to that law. This is a thing you can actually call up your MP and say,

hey, where do you stand on revisions to Canada's competition law? And what are you going to do when it comes up for a vote? You know, the European Commission just greenlit Microsoft's merger with Activision, which is a terrible merger. But the UK Competition and Markets Authority blocked it. And, you know, they're not going to be able to merge if they can't operate in the United Kingdom, right? Microsoft is not going to pull out of the United Kingdom. And Canada could play a spoiler role like that, too, the US precedent stops US enforcers like the Federal Trade Commission and the Department of Justice from doing what's right. Canada can make those laws. And Microsoft is not going to leave Canada any more than it's going to leave the United

Kingdom. And if mergers are not permissible in Canada, they're not going to happen in the US. Canada, they're not going to happen in the US. In conclusion here, I want you to get real with people here. Like, just lay it all out. Are we doomed to watch the websites we love and rely on get worse and worse until one after another, they just slowly die, only to be replaced by others that will continue the cycle? No, I mean, I think that, that, um, companies, uh, will come and go. You know, I, I remember when Compaq bought the digital equipment company, both of these

companies are now long gone, but, but Compaq was a little PC startup and the digital equipment company created the mini computer revolution. You know, when I was a kid and my dad was a computer scientist bringing home teletype terminals connected to the university of Toronto, the, the super powerful multimillion dollar computers that had swept the world and challenged IBM's hegemony had come from the digital equipment company. Right. And, and so, you know, they went from flying high to being bought by an upstart in just a couple of years, right? You know, between my starting puberty and my first date, say. And that was a pretty remarkable circumstance.

And that was par for the course in technology because technology is very dynamic. And, you know, it's fine to have our platforms come and go. It's fine to have our platforms come and go. So much of our regulation has been aimed at making sure that those platforms behave themselves rather than making sure that it's easy for us to treat them as damage and route around them. So much of what we do to make them behave themselves actually cements their dominance. for example, say the way we're going to resolve the crisis of media getting ripped off by the tech industry is by making the tech industry share its profits with the media, then we make the media partisans for tech's profits. And instead what we could do is we could say, actually, the way that you make those profits is by having the kind of monopoly that lets you take 51 cents out of every ad dollar, by running the mobile duopoly, the rotten mobile duopoly that lets you take 51 cents out of every ad dollar. By running the mobile duopoly.

The rotten mobile duopoly. That lets you take 30 cents out of every subscriber dollar. And by locking up social media users. And forcing media companies to pay to reach the subscribers who ask to hear from them. And maybe if we fix that stuff. Then media companies won't have to go and bargain with tech. For a better deal. Instead, tech won't be able to get a worse deal to begin with. Thanks for taking the time to chat with us, Corey.

Oh, I really appreciate it. That was my colleague, Alex Panetta, speaking with Corey Doctorow in June. One thing to note, you heard Corey mention the Microsoft Activision deal getting blocked in the UK. Well, in October, that $69 billion deal actually did end up going through, vastly increasing Microsoft's standing in the video game market. That's all for today. I'm Damon Fairless. Thanks for listening to FrontBurner.