The platform is the conventional form of Internet business: a two-way marketplace that facilitates communication between end users and business customers. Uber connects drivers with riders. Amazon and eBay connect sellers with buyers. TikTok and YouTube connect artists with audiences. Social media connects people with something to say to people who want to hear it.
And yet lax competition law has allowed companies to consolidate and squeeze their markets. Meanwhile, the merged sectors can easily sing with one voice, preventing unfavorable regulations from being passed (the US National Privacy Act has yet to be enacted) or enforced (the EU’s General Data Protection Regulation shows that Ireland even as An illegal regulation is more valuable. A haven that was always a mere tax haven).
Undisciplined by competition or regulation, platforms are free to move toward “enshittification,” where a company extracts value from both sides of a two-sided market, relying on lock-in to prevent users and business customers from fleeing to an open competitor. has 2023 was when platforms crashed: Twitch, Reddit, Twitter, Facebook, Instagram, Google Search, and Discord all spiraled into terminal encryption, shifting value from users to shareholders, leaving half-dead things behind. which were unpleasant, but undesirable. -cancellable
The secret to this reluctance is high “switching costs”—the economists’ term for what you have to give up to leave a job. You hate Facebook, but you love connecting with your communities, friends, and customers. They’re holding you hostage on behalf of Facebook—and you’re holding them hostage. Facebook is literally paying for these high switching costs: The US Federal Trade Commission’s antitrust case against Facebook revealed internal memos in which a product manager explicitly plans to design features that “Makes switching costs too high for users” to make it “very difficult”. To switch the user to a competing service.
Regulators are increasingly aware of the fact that Big Tech deliberately designs its products to impose high costs on users who dare to prefer their competitors. If a company can’t provide a formal means for users to take their data with them, or to continue communicating with contacts they leave behind when they switch platforms, those users will have little recourse. It’s common practice to reverse-engineer a competing platform to build an informal, interoperable bridge—for example, a tool that ditches your Facebook, Twitter, LinkedIn, and other messages for a shared inbox in a new privacy-friendly service. It is effectively outlawed by anti-circumvention laws, patents, copyrights and strange contract theories like “bad interference”.
Despite these exit barriers that keep users tied to bad platforms, most regulatory responses to Big Tech have been to make it better rather than making it easier to leave. We continue to legislate that binds big tech to policing misinformation, harassment and a host of police evils, but with the passage of the EU’s Digital Markets Act (DMA), we’re finally focusing on building big tech. less important for its users, and therefore less sticky.
The DMA allows the commission to make rules for each service to facilitate “interoperability” – connectivity – with new services. It’s not just the ability to carry data or download a blob of all the messages you’ve sent and photos you’ve uploaded. It’s the ability to leave one service, start up somewhere else, and resume conversations and transactions you left behind. For example, under DMA, it should be possible to log out of Facebook and start up on Mastodon’s community-run server and still participate in group discussions and exchange individual messages with people who aren’t ready to log out (yet).
In the UK, the long-delayed Digital Markets, Competition and Consumer Bill will finally give enforcement powers to the Digital Markets Unit at the Competition and Markets Authority, which has dozens of smart engineers and policymakers on HMG’s payroll. Turn your detailed market studies into policy. If passed, the bill would give each dominant service broad latitude to treat mods, including interoperability requirements that require walled gardens to install gateways for new market entrants, making it easier for users to do so without To separate themselves from important social relationships.
In the United States, several interoperability bills with broad bipartisan support have made it out of committee, but were held back from a vote after intense lobbying by the tech sector. But if the UK and the EU impose interoperability on tech companies, it doesn’t matter whether America’s beleaguered legislature can’t add itself — users around the world will reap the benefits of interop and burn switching costs.
These solutions will start coming online in 2024. I believe we will see one or more Big Tech platforms face a legal requirement to facilitate their users’ opt-outs: “Mr. Zuckerberg, tear down that (garden) wall.”
