How Internet Monopolies Kill Competition and Turn Users into a Commodity

It used to be like that but it isn’t any more: the heyday of the geek era on the Internet fell on the 2000s. The decade was the era of transition from inventors to marketers, entrepreneurs to managers, startups to corporations, competition to monopolization.

The symbolic end of this transit could be seen in 2018, when Google officially renounced its famous moral imperative Don't be evil. Instead, now it's time to place the equally famous Greed is good on the main Google page.

The internet of romantic entrepreneurship is being replaced by the internet of big business. Instead of the good old we-be-one-of-blood-you-and-I unity, a geek and a user, a startup and a user, there was a stratification into antagonistic entities - corporations against users. The very word "users" reflects the paradigm of the old Internet, when services were waiting for people who would use them. Now the criterion for the effectiveness of an Internet business is the ability to retain a person in order to use them.

The modern Internet is increasingly based not on the ability to be useful to people, but on using them. A benefit for the user is no longer their main task, but a tool that helps to attract more people and retain them longer in order to use them.

The Internet is increasingly turning into a place where the main product is not digital products and services produced by the mind, labor and talent of developers, but the users themselves, who stop being users and turn into the ones who are used.

In itself, the strengthening of the symbiosis of users and services, when it is no longer clear who uses whom, is a natural consequence of the development and complication of the Internet. The problem is the one-sidedness of the new format of relations, when corporations have already adapted and turned their users into a product, and users are still under the illusion that it is they who use, for example, Facebook, and not Facebook that uses them.

And all this illusion is thickly entwined with ivy of hypocrisy in order to keep it from exposure longer. Respect for users was replaced by PR. Google and Facebook themselves are simultaneously involved in scandals related to human rights violations in some parts of the world (China and Myanmar, for example) and to symbolic gestures supporting the SJW agenda in others (mainly at their home, in the USA). The first is just a business. The second is PR. Because PR on human rights is much cheaper than following them.

But even if we restrict ourselves to the very nature of the relationship between users and platforms, instead of balancing the interests of the parties there is the complete dominance of corporations with their platforms and ecosystems.

Google and Yandex sell paid services to users, but at the same time they do not stop data mining all the juices from them. Yandex, for example, trains the recognition of pictures in the contents of personal photo albums on Yandex.Disk.

Facebook does not even hide that their business is users, not a service, not offering a paid version without ads, even optional. For free is a beautiful cover for an unsightly reality in which a paid user brings only a fixed income, while the ways to make money from a “free” user are limited only by the ingenuity of their managers.

Users are no longer guests at this free feast in a hospitable home, but its main dish.

The most respectable approach (relative to other sharks of Internet capitalism) is from companies like Apple and Spotify, which continue to sell hardware and services to users, rather than buying users for hardware and services to resell them to everyone else. But this difference is not so significant in a broader context. All of these corporations, from Google to Apple, from Amazon to Yandex, are participating in the same project to “ecosystemize” users.

Ecosystemization is the horizontal expansion of businesses to the level of multiplatforms that are involved in as many of their users' daily tasks as possible.

This does not only increase the value of both the digital profile of each individual user due to the variety of types of information collected about them, but also, in the future, increases the "cost" of their transition to another platform.

It's not just about transferring data as such. Companies keep users with soft power. The comfort created within the ecosystem is such that when trying to leave it - for example, replacing the iPhone with Android or Mac with Windows, the user immediately feels their loss in small details like the simplicity of various synchronizations. Thus, in order to move into the cozy comfort of another ecosystem, they need to either update the entire electronics set at once - or stay “at home”.

Only the ways of involving users in this project differ - for free and with advertising or for money and without - while the direction is the same.

Ecosystemization is the digital equivalent of serfdom. Serfdom also began as a kind of partnership between the landowner (platform) and the peasant (user). The landowner gave the peasant land, the peasant produced a product for the landowner, and in exchange he enjoyed relative business freedom - for example, he could “break the contract” once a year and go to another landowner (St. George's Day).

The problem with these relations was that the individual peasant had much less influence on the landlord than the individual landowner had on the peasant.

The peasants simply did not have a choice: all the land belonged to the landowners (we are talking about all the large landowners, including the Church and the tsar). And this gave the landowners every opportunity to slightly shift the balance of interests more and more in their favor, until this led to a natural result: binding the peasants in full serfdom, i.e. actually putting them in a position of slaves.

The same is happening now on the Internet: Internet corporations do not just grow at the expense of new users and businesses - they oust existing companies from the market, filling the entire space and squeezing out not only competitors, but also the very possibility of competition.

A good example of how this works is Amazon, each new sorting center of which mercilessly roots out all small businesses in the neighbourhood. Moreover, this is not only a side effect of their functioning, but also a purposeful policy: there are cases when Amazon simply repeated the product line of the sellers presented by them, and duplicated it at dumping prices, in fact, taking over their business niche.

Amazon can afford it not only because it is a marketplace, but also because it has access to closed information about the business processes of its merchants. As far as the value of information and the risks of uncontrolled access to it are concerned, Jeff Bezos is now the richest man in the world.

That is, the libertarian utopia of the early Internet is turning into its reality nightmare - a world divided between monopolies - and this is happening in full view of us all.

The very success story of these companies and their frontpeople - from Gates to Zuckerberg, from Jobs to Musk - is also a product of PR, modern myth-making with modern gods and titans, who lifted the Earth on their shoulders solely with their mind, work and talent. These myths are based on real events, and the desired effect is achieved by ignoring details that do not fit into the narrative, which would blur the epic images.

These myths serve as a beacon of hope for entrepreneurs and developers around the world. Whereas in reality businesses, the history of which is steeped in the romance of the pioneers (the companies that grew in a garage, were started in a dorm room and achieved success), have grown to such a size that following their footsteps has become totally impossible. In the best case, one of the giants will notice and buy you. Now this is a new paradigm of success: not to start your own farm, but to go to a more powerful landowner.

In this sense, the invention of the Internet resembles the history of the colonization of America by Europeans (with the only difference that no one lived on the Internet before its discovery): the New World was a space of unlimited possibilities only for some time, until the empires finally divided it up among themselves.

Of course, there is another side to the coin. Progress, improvement of user experience (it is true that every year it is becoming more comfortable and cozy inside ecosystems!). Training on custom files develops neural networks. And advertisers, getting to know their consumers closer and closer, make advertising more targeted - and, therefore, less annoying. An ideal ad is one that doesn't feel like an ad at all, but rather seems to be helpful advice given just in time. So here, too, total platform control is wrapped in a soft blanket of comfort that promises to reduce the annoyance of advertising.

The development of platforms, services, technologies, the alignment and deepening of communications between people around the planet is, perhaps, the main achievement of the modern world, promising not a step, but a breakthrough in the development of human civilization.

The benefits of progress are not the problem - they are indisputable. The problem is how these benefits will be distributed in a new wonderful, much more comfortable, transparent and digitalized world.

The speed with which the communication revolution is unfolding has its price: new resources, opportunities, technologies and ways of earning money appear so quickly that the absolute majority of humanity and a significant part of businesses cannot adapt to it without getting involved in a frantic race for the first cream from new markets ... This allows you to open, capture and divide new niches before the bulk of interested businesses and users come there. The longer the Internet market develops according to the laws of the wild west, ignored by antitrust regulators, the further the consolidation and strengthening of the strongest players goes, widening the gap with potential competitors.

A similar stratification occurs in the labor market, allowing specialists who have mastered new skills earlier than others to get ahead in their careers before serious competition arises in it. However, no specialist can fill an entire labor market, while companies can grow indefinitely, not just outstripping competitors, but also capturing entire markets, eliminating competition as such.

Thus, when the benefits of progress reach the majority of people, their lion's share is already sorted out by a small number of players. The uncontrolled growth of mega-corporations, the consolidation and monopolization of businesses and platforms paint a picture of the growing preponderance of one side, the corporate minority, the new Internet aristocracy that is taking shape before our eyes.

1) as a market (that is, its users),

2) as a business (raising the price of market entry for competitors to sky-high),

3) as a resource (primarily a financial one, accumulating at its disposal - as a rule, offshore - huge monetary resources).

The problem is that all of these corporations have grown on soil that has been abundantly fertilized with taxpayers' money. The part that the mythmakers of the Silicon Valley titans forget about is public investment in education (Silicon Valley is rooted in Stanford) and the monetary rain of government orders that began during the Cold War and has not dried up to this day.

Until the courtship period of the relationship between the user and the Internet giants has not ended yet, and the possibility of an offended tweet or devastating publication in the media to force multinational corporations to change course in any trifles remains.

1) all major platforms - content, service, trade, communication,

2) probably - control over communication channels (the law on net neutrality in the USA has already been canceled),

3) all server capacities and stored data (with the spread of 5G, most of the personal archives will be stored online, accessible only to the user and a huge corporation, and to nobody else);

4) all the data of all Internet users in most parts of the planet (maybe, with the exception of China, but there are their own corporations), including non-public data, such as the contents of personal "clouds". By the way, that’s another great soothing metaphor for digital ecosystemization - "clouds".

5) All money earned by their monopoly position, carefully deposited in offshore accounts.

6) Control over user access to platforms they control and users' freedom of speech on them.

7) Influence on the media, either already bought from the same pockets that own Silicon Valley, or desperately dependent on big business as advertisers and a source of traffic. Media is leaving for the audience on social networks, social networks are owned by corporations, corporations are turning into monopolies - what could go wrong?

For this to happen, users must be aware of their interests. Realize that the warm feeling of ecosystemization and corporate amalgamation is water that's just starting to boil around the frog. That the interests of corporations are not only no longer parallel to the interests of their users, but increasingly antagonistic. That the monopolies themselves don’t demonopolize themselves, they won’t share the captured markets, they won’t pay taxes from the profits taken away - only the state has the resources, experience and authority to do this.

It is only the state that has the power and can afford to think about education and science before the fruits of the previous scientific and technological breakthrough are finally eaten away.

The idea of ​​completely trusting the state in the past did not become a reality. The idea of ​​completely trusting business is reaching a dead end before our very eyes. To get off this crazy swing, people need to stop believing in the monochrome ideologies of socialism and capitalism - and learn to see the strengths and weaknesses of both approaches.

It is necessary to use both the benefits of consumerism and the protection of the state - but at the same time not trusting either big capital or Big Brother.

The good news is that right now, for the first time, humanity has got a tool of mass education, organization and action in one - the Internet. Until now, most people have been users in it.

And while most people are only getting more comfortable on the Internet, the monopolies should not be allowed to privatize the most important achievement of civilization since the days of inventing writing in exchange for improved user experience and increased space in the cloud.