# BONUS: How the Internet Got Worse with Cory Doctorow

An episode of [Masters in Business](https://invisiblenetwork.ai/podcast/730188152), 21 Jan 2026, 42 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/4e4cd910-40a1-4619-a5f3-ae2b0012ffff/ee7e3926-eb43-4871-ba45-b3d9017bfc90/audio.mp3?utm_source=Podcast&in_playlist=5873a3cb-298f-40bc-b71f-ae2b0013000d

On this special, bonus edition of Masters in Business, Barry speaks with Cory Doctorow, a science fiction author, activist, journalist and blogger. They discuss the power of large companies over the Internet, and Corey's advocacy for data privacy. Barry and Cory discuss platform decay on the Internet, and how companies keep operating profitably while the user experience decays. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. This week on the
[0:08] Speaker 1: podcast a special bonus episode. Corey Doctorow has a new
[0:14] Speaker 1: book out entitled Ingentification, all about the decay of digital platforms.
[0:22] Speaker 1: I've been reading Corey for a long time, both at
[0:26] Speaker 1: Boing Buying and elsewhere. I'm a big fan of his
[0:29] Speaker 1: takes on technology. I thought this conversation was really intriguing,
[0:34] Speaker 1: and I think you will also with no further ado,
[0:38] Speaker 1: my conversation with technology author Corey doctor Corey doctor O,
[0:52] Speaker 1: Welcome to Bloomberg.
[0:54] Speaker 2: Thank you very much. Berry. It's a great pleasure to
[0:56] Speaker 2: be here.
[0:56] Speaker 1: It's a pleasure to have you. So you Before we
[0:59] Speaker 1: get into the book, I have to just go into
[1:01] Speaker 1: a little bit about your background. I think of you
[1:04] Speaker 1: as a writer first, but you have such a multifaceted career.
[1:09] Speaker 1: How do you describe what you do?
[1:11] Speaker 2: Well?
[1:11] Speaker 3: You know, it's funny, before I became a British citizen,
[1:13] Speaker 3: when I was living in London, every time I landed,
[1:16] Speaker 3: I had to fill in a landing card with my
[1:18] Speaker 3: occupation and just had this little like three quarter inch
[1:21] Speaker 3: blank and I would eventually just write in writer. But
[1:24] Speaker 3: you know, trying to explain to my grandmother when she
[1:26] Speaker 3: was alive. What I did for a living was always challenging.
[1:28] Speaker 3: I'm a writer, I'm an activist. I've worked for the
[1:31] Speaker 3: Electronic Frontier Foundation for nearly a quarter of a century.
[1:34] Speaker 2: Now.
[1:34] Speaker 3: It's a digital rights group that tries to make sure
[1:36] Speaker 3: that your human rights apply online and offline in these days,
[1:40] Speaker 3: that the Internet isn't taking away your human rights. Offline,
[1:43] Speaker 3: I write science fiction novels. I've written a couple of
[1:45] Speaker 3: dozen of those, won a bunch of awards, had New
[1:48] Speaker 3: York Times bestsellers.
[1:49] Speaker 2: And I'm a blogger.
[1:51] Speaker 3: As you say, I edited Boing Boing for nineteen years
[1:53] Speaker 3: and these days I have my own blog, Pluralistic dot net,
[1:57] Speaker 3: and I write about tech, policy, culture, science fiction, all
[2:02] Speaker 3: kinds of stuff.
[2:02] Speaker 1: So let's start with tech culture and EFF. What was
[2:07] Speaker 1: the first issue that got you interested in exploring digital
[2:12] Speaker 1: rights and just protecting user rights on the Internet.
[2:17] Speaker 3: Well, like a lot of EFF supporters, you know, I
[2:19] Speaker 3: got started reading about the stuff EFF was doing long
[2:22] Speaker 3: before I got involved with them.
[2:23] Speaker 2: So, you know, one of the big.
[2:26] Speaker 3: Cases that we got involved with very early almost and
[2:28] Speaker 3: then called Bernstein. So the NSA had classed encryption as
[2:32] Speaker 3: a munition and they said that civilians should not be
[2:35] Speaker 3: able to access working encryption. They had a kind of
[2:38] Speaker 3: weak form of encryption they called DEZ fifty. It was
[2:41] Speaker 3: the defense encryption standard with fifty bits of key, and
[2:44] Speaker 3: they said DEZ fifty is good enough for anyone.
[2:47] Speaker 2: The mafia won't.
[2:48] Speaker 3: Break it, our foreign adversaries won't break it. But you know,
[2:51] Speaker 3: the NSA can break it if they need to. And
[2:54] Speaker 3: we tried all kinds of things to say this was
[2:56] Speaker 3: a bad idea. One of our founders, John Gilmour, actually
[2:58] Speaker 3: built a computer called deep crack that could brute force
[3:02] Speaker 3: all of DEAs fifty and two and a half hours.
[3:04] Speaker 3: It cost a quarter of a million bucks and it's
[3:06] Speaker 3: actually in my office now because John got tired of
[3:08] Speaker 3: having it in his garage and no one cared. But
[3:12] Speaker 3: then we went to court representing a cryptographer grad student
[3:15] Speaker 3: at Berkeley called Daniel J. Bernstein, who had made an
[3:19] Speaker 3: encryption program that was stronger than des fifty, that was
[3:23] Speaker 3: as strong as modern encryption these days. You know, when
[3:25] Speaker 3: you take your distraction rectangle out of your pocket and
[3:28] Speaker 3: click it. In the instant it takes for that file
[3:30] Speaker 3: to land on the mass storage, it's encrypted, so well
[3:33] Speaker 3: that if every hydrogen atom in the universe were a
[3:35] Speaker 3: computer and it did nothing until the end of the universe,
[3:37] Speaker 3: but try and guess the key, you would run out
[3:39] Speaker 3: of universe before you ran into keys. So he makes
[3:42] Speaker 3: a working encryption, this kind of miraculous modern thing, the
[3:45] Speaker 3: thing that protects your bank transactions and the firmware updates
[3:47] Speaker 3: for your anti lock breaks, and you're a pacemaker and
[3:50] Speaker 3: all that other stuff that we want to keep secret
[3:52] Speaker 3: and secure. And we argued that he had a First
[3:55] Speaker 3: Amendment right to publish his source code, that source code
[3:58] Speaker 3: was a form of expressive speed each under the First Amendment.
[4:01] Speaker 3: We won in the district, we won at the appellate
[4:04] Speaker 3: division in the ninth Circuit. The NSA didn't want to
[4:06] Speaker 3: take their chances with the Supreme Court. And ever since then,
[4:09] Speaker 3: code has been speech and we have had the tools
[4:12] Speaker 3: to have secure communications.
[4:13] Speaker 1: So I recall you being very involved with Digital Rights
[4:17] Speaker 1: Management and Napster and Grockster, and there was a video
[4:21] Speaker 1: version of that.
[4:22] Speaker 2: There was a broadcast flag, right.
[4:25] Speaker 1: That's that's when I first realized, Oh, he's more than
[4:28] Speaker 1: just a curator, he's really very much an activist. You
[4:32] Speaker 1: started writing about surveillance and monopolies and information asymmetries. I
[4:38] Speaker 1: don't know, is it twenty twenty five years ago? Tell
[4:40] Speaker 1: us a little bit about that.
[4:42] Speaker 3: Well, I'm partly it's because I'm a science fiction writer,
[4:46] Speaker 3: and so as a science fiction writer, the thing that
[4:49] Speaker 3: I'm most preoccupied with is not what the gadgets do,
[4:52] Speaker 3: but who to gadgets.
[4:53] Speaker 2: Do them for?
[4:53] Speaker 3: And who to gadgets do them too. I think of
[4:56] Speaker 3: science fiction as a kind of inverse of this kind
[4:59] Speaker 3: of vulgar thing aturism that says there is no alternative.
[5:02] Speaker 3: You know, Margaret Thatcher used to say there is no alternative,
[5:04] Speaker 3: so often they called her Tina there is no alternative.
[5:07] Speaker 3: What she met was like, stop trying to think of
[5:09] Speaker 3: an alternative, right, And and you know, when you are
[5:12] Speaker 3: a technologist, and that's my background as a software developer,
[5:15] Speaker 3: and when you have that kind of science fiction imagination,
[5:18] Speaker 3: you look at the things that you're using, You're thinking,
[5:21] Speaker 3: why do we have to take the bad with the good?
[5:23] Speaker 2: Right?
[5:23] Speaker 3: Why is the product designer here delivering me a prefeast
[5:27] Speaker 3: menu that's full of a bunch of stuff that no
[5:30] Speaker 3: one would ever want to eat instead of just the
[5:32] Speaker 3: a la carte that has the things that I want.
[5:34] Speaker 3: And so I started to wonder why we couldn't, you know,
[5:39] Speaker 3: seize the means of computation, take the things that we
[5:43] Speaker 3: were using, and you know, make them work for us,
[5:46] Speaker 3: not for someone else. They sell you a printer that
[5:47] Speaker 3: only takes our third party inc. You modify the printer
[5:50] Speaker 3: so it takes generic ink. They sell you a phone
[5:52] Speaker 3: that only uses their apps. Store you modified so it
[5:54] Speaker 3: uses anyone's apps. They put you on the web and
[5:57] Speaker 3: they start spying on you. Well, you put a privacy blocker.
[6:00] Speaker 3: You know, more than half of all Internet users have
[6:03] Speaker 3: installed an ad blocker.
[6:04] Speaker 2: It's the largest consumer boycott in history.
[6:06] Speaker 1: Wow.
[6:07] Speaker 3: And it means that whenever a product manager sits down
[6:10] Speaker 3: to think about, like how invasive and obnoxious should our
[6:12] Speaker 3: ads be, they kind of have to contend with this
[6:14] Speaker 3: possibility that users will take it upon themselves to correct
[6:19] Speaker 3: the situation, to make a counter offer.
[6:22] Speaker 2: Right, my offer is I'm.
[6:24] Speaker 3: Going to show you this web page, but I'm going
[6:25] Speaker 3: to spy on you and bombard you with ads.
[6:28] Speaker 2: Your counter offer might be how about no? Right?
[6:31] Speaker 3: And so you know that's dangerous because if like making
[6:34] Speaker 3: your ads twenty percent more obnoxious makes forty percent of
[6:37] Speaker 3: your users put in an ad blocker. You don't get
[6:39] Speaker 3: money from them anymore, and no one ever goes back
[6:42] Speaker 3: to the search engine and types how do I start
[6:43] Speaker 3: seeing ads again? So that's that's a permanent thing. And
[6:46] Speaker 3: you know, one of the big changes and one of
[6:48] Speaker 3: the things that I've tracked over these these this quarter
[6:51] Speaker 3: century is the rise and rise of IP rules that
[6:57] Speaker 3: prohibit that kind of modification. So the biggest one being
[7:00] Speaker 3: something called anti circumvention law, which is law that just
[7:03] Speaker 3: says you can't modify something that's designed not to be modified.
[7:06] Speaker 2: In other words, of the.
[7:07] Speaker 1: Programmer, despite the fact that you paid for it and.
[7:09] Speaker 3: It's yours, you want to do something legal with it.
[7:11] Speaker 3: So if the programmer, basically when they're writing the code,
[7:14] Speaker 3: does equivalent of drawing a chalk dotted line around some
[7:16] Speaker 3: of the code and says like don't look in here
[7:18] Speaker 3: or change this, under laws like the Digital Millennium Copyright
[7:22] Speaker 3: Act of nineteen ninety eight, it becomes a felony to
[7:24] Speaker 3: change it, even for a lawful purpose. And so you know,
[7:27] Speaker 3: an app, it's just the web, but it has these
[7:30] Speaker 3: these these technical protection measures that make reverse engineering illegal.
[7:34] Speaker 3: So an app is just a website, you know, skinned
[7:37] Speaker 3: to the right eyep to make it a felony to
[7:38] Speaker 3: defend your privacy.
[7:39] Speaker 2: When you use it.
[7:40] Speaker 3: This is why you know, bosses are so horny to
[7:42] Speaker 3: make you use their apps and not their websites.
[7:44] Speaker 1: Right, right, So it's interesting because you lived in Europe,
[7:48] Speaker 1: and in particular in London for so long, it seems
[7:51] Speaker 1: like the Europeans have a much more user friendly perspective
[7:57] Speaker 1: on privacy rights and digital rights. How how far away
[8:00] Speaker 1: is the United States from if not the platonic ideal
[8:05] Speaker 1: just the way Europe does it? Or am I giving
[8:08] Speaker 1: them too much credit?
[8:09] Speaker 2: Well?
[8:10] Speaker 3: Look, I don't think it's necessarily because the Europeans are
[8:12] Speaker 3: better at regulation than the Americans. I think it has
[8:15] Speaker 3: a lot to do with the fact that the companies
[8:16] Speaker 3: that abuse us on the Internet are not called Nokia, Olivetti,
[8:21] Speaker 3: ericson Deutsche Telecom. Right, It's a lot easier to get
[8:24] Speaker 3: the political space to do evidence based policy when your
[8:28] Speaker 3: economy isn't so focused and controlled by a small number
[8:33] Speaker 3: of very dominant firms. That's just a rale politique here.
[8:37] Speaker 3: I think though, that something is changing in Europe, and
[8:40] Speaker 3: it has changed over the last few years, and it's
[8:42] Speaker 3: about to accelerate quite a lot, I believe.
[8:46] Speaker 2: So.
[8:46] Speaker 3: For a long time, the European approach to tech was
[8:49] Speaker 3: to try and make them behave themselves.
[8:51] Speaker 2: Right.
[8:51] Speaker 3: So, you know, Mark Zuckerberg has a platform with a
[8:54] Speaker 3: lot of abuse and hate speech and harassment. They say,
[8:57] Speaker 3: Mark Zuckerberg, you have to prevent that.
[8:59] Speaker 2: Right.
[9:00] Speaker 3: What they're saying to him is the problem isn't that
[9:01] Speaker 3: you have the power. The problem is how you wield
[9:03] Speaker 3: the power. We would like you to wield your power
[9:05] Speaker 3: more responsibly, and in fact, if you need more power
[9:08] Speaker 3: to do that, right, Because if you're going to stamp
[9:10] Speaker 3: out harassment on a platform, you have to know whatevery
[9:13] Speaker 3: user is doing and have the power to stop them.
[9:15] Speaker 3: So even if you need to arrogate more power to
[9:18] Speaker 3: yourself over your users, that's okay.
[9:19] Speaker 2: Just use the power in the way that we want.
[9:21] Speaker 3: It's kind of a constitutional monarchy, right, he is the
[9:23] Speaker 3: absolute ruler, but he suffers himself to be draped and
[9:28] Speaker 3: like gilded chains held by his courtiers.
[9:30] Speaker 2: Right.
[9:30] Speaker 3: In the last few years, the European Union has started
[9:33] Speaker 3: to regulate as though the problem was the power itself,
[9:35] Speaker 3: not that Mark Zuckerberg was bad at being the social
[9:38] Speaker 3: medias are for four billion people unelected with an office
[9:41] Speaker 3: for life, but rather that that office shouldn't exist, And
[9:44] Speaker 3: so they've started to impose things like interoperability requirements that
[9:48] Speaker 3: make it so that if you leave a social media
[9:50] Speaker 3: platform when you get somewhere else, Blue Sky masked it
[9:54] Speaker 3: on something that doesn't exist, because why would you capitalize
[9:57] Speaker 3: something when everyone's locked into Facebook or Twitter.
[10:00] Speaker 2: When you get there, you.
[10:01] Speaker 3: Should be able to see the messages posted by the
[10:03] Speaker 3: people you left behind. You should be able to have
[10:06] Speaker 3: discourse with them, be part of those communities in the
[10:08] Speaker 3: same way that like when you switch from you know,
[10:11] Speaker 3: Vota phone to T Mobile, you do some administrative work
[10:14] Speaker 3: and a few seconds later your phone number cuts over.
[10:16] Speaker 1: No, one doesn't seem to work that way. You used
[10:19] Speaker 1: to be able to drag your either the people you
[10:22] Speaker 1: were following or your own followers. Sure from Twitter to
[10:25] Speaker 1: Blue Sky that that those ais got.
[10:27] Speaker 2: Yeah, they made it a lot harder.
[10:29] Speaker 3: So it wasn't that you could drag them over, you
[10:31] Speaker 3: could find them, right And this was all cutting off
[10:34] Speaker 3: the This is what musted when he cut off the
[10:36] Speaker 3: API is he made it much harder to build those
[10:38] Speaker 3: migration tools, and so you know, the EU is like
[10:41] Speaker 3: focusing on those migration tools, and they're about to become
[10:44] Speaker 3: a lot more focused because of Trump's foreign policy. So
[10:48] Speaker 3: for more than twenty years, I have gone around the
[10:50] Speaker 3: world more than thirty countries on behalf of the FF
[10:53] Speaker 3: and talk to policy makers about what would make a
[10:56] Speaker 3: better Internet policy, things like improved interoperability rules, the right
[11:00] Speaker 3: to reverse engineer, modified bet are privacy rules. And what
[11:03] Speaker 3: they've said at every time is that, well, we'd love
[11:06] Speaker 3: to do that. It sounds very sensible, but the US
[11:08] Speaker 3: Trade Representative has made it very clear that if we
[11:10] Speaker 3: don't have policies that protect the rent extraction of American firms,
[11:13] Speaker 3: they're going to hit us with tariffs. Well, you know,
[11:15] Speaker 3: a happy liberation day, right if the guy.
[11:19] Speaker 1: Says this trade thing is two sided? Yeah, suggesting.
[11:23] Speaker 3: So if the guy says, do what I tell you're
[11:24] Speaker 3: going to burn your host down, you do what he
[11:26] Speaker 3: tells you, and he burns your host down.
[11:27] Speaker 2: Anyways, you're kind of a sucker if he keep doing
[11:29] Speaker 2: what he tells you to do.
[11:30] Speaker 3: And not only that, but Trump has made it so
[11:33] Speaker 3: clear that what we used to call American trading partners
[11:36] Speaker 3: are now America's rivals, right, and that that rivalry will
[11:39] Speaker 3: be pursued through the American tech giants.
[11:42] Speaker 2: You know, this is what we were told Huawei was
[11:44] Speaker 2: going to do to us.
[11:45] Speaker 3: Every accusation is a confession rights.
[11:48] Speaker 1: That's exactly right.
[11:49] Speaker 3: You know, when the International Criminal Court swore out a
[11:52] Speaker 3: complaining against Benjamin and Yahoo for genocide, Trump denounced this
[11:56] Speaker 3: and then Microsoft terminated his online accounts.
[11:59] Speaker 2: He lost his e email, he lost his.
[12:00] Speaker 3: Address book, he lost his calendar, and he lost the
[12:04] Speaker 3: working files of the International Criminal Court.
[12:06] Speaker 2: Well, this has lit a fire under Europe. Right.
[12:08] Speaker 3: They are now pursuing this thing they call Eurostack. There's
[12:11] Speaker 3: a lot of money for it, and they want to
[12:12] Speaker 3: replicate American tech stacks. They want to replicate the data centers,
[12:15] Speaker 3: they want to replicate the applications Google Docs and so
[12:18] Speaker 3: on and so on. The problem is, no one is
[12:21] Speaker 3: ever going to copy and paste a million documents from
[12:23] Speaker 3: their government ministry, one at a time, out of g
[12:26] Speaker 3: Docs and into a eurostack.
[12:28] Speaker 1: This sounds very much like Europe has a TikTok problem
[12:32] Speaker 1: the way the United States does. Only the issue is
[12:35] Speaker 1: American tech companies, not a Chinese social media network.
[12:39] Speaker 3: And Honestly, I don't think TikTok is doing what they
[12:42] Speaker 3: say they're doing, and if they are, the best way
[12:44] Speaker 3: to solve that is to just update American privacy law
[12:46] Speaker 3: because that's the problem. You know, the last time we
[12:49] Speaker 3: got a new privacy law in America, you may know this,
[12:51] Speaker 3: it was nineteen eighty eight. It was when Ronald Reagan
[12:53] Speaker 3: signed the Video Privacy Protection Act. It makes it a
[12:56] Speaker 3: crime for video store clerks to disclose your VHS rentals.
[13:00] Speaker 3: Everything else is fair game, right, Why is TikTok spying
[13:03] Speaker 3: on you? That's why I ticked it because we let
[13:05] Speaker 3: them right. But you know, in Europe, when they reach
[13:08] Speaker 3: this point where they're not gonna be able to migrate
[13:11] Speaker 3: from these old American services to these new European services,
[13:15] Speaker 3: they're going to have to start reinvigorating their reverse engineering
[13:19] Speaker 3: game and make it so that you can run headless
[13:22] Speaker 3: phones and the cloud that impersonate users and iterate through
[13:26] Speaker 3: the documents and move them over and do scraping or
[13:28] Speaker 3: all clients on device bridging, all this stuff that we
[13:30] Speaker 3: used to do.
[13:31] Speaker 2: All the time. Right, That was like ross Perot's.
[13:34] Speaker 3: Business, right, it was helping people move data between systems
[13:36] Speaker 3: that we used to do all the time. As they
[13:38] Speaker 3: would say in the Star Wars universe, this elegant weapon
[13:41] Speaker 3: from a more civilized age. They're gonna have to revive
[13:43] Speaker 3: it because right now it's like they've observed a giant
[13:45] Speaker 3: housing crisis in East Berlin, and so they built a
[13:48] Speaker 3: bunch of houses in West Berlin, and they're not thinking.
[13:50] Speaker 2: About how the people are going to move in.
[13:52] Speaker 3: They're gonna have to tear down the wall, right, And
[13:54] Speaker 3: so this is in some ways one of the most
[13:58] Speaker 3: amazing things to happen in digital rights in my whole career.
[14:03] Speaker 3: It's sort of analogous to what happened when Putin invaded Ukraine.
[14:06] Speaker 3: You know, there used to be all these structural reasons
[14:07] Speaker 3: that couldn't solarize Europe, right planning, permission, electrical and safety
[14:12] Speaker 3: codes and so on. All of a sudden, when you're
[14:14] Speaker 3: shivering in the dark, that stuff isn't so important. And
[14:16] Speaker 3: now Europe is ten years ahead of their solar transition plan, right.
[14:20] Speaker 3: I think that we're about to get this on a
[14:22] Speaker 3: global scale, not least because economically it makes so much sense.
[14:26] Speaker 3: You think about the extraction from these locked platforms right
[14:30] Speaker 3: in jet inc In jet ink is the most expensive
[14:32] Speaker 3: fluid you can buy as a civilian without taking a
[14:35] Speaker 3: special license. It would be cheaper to print your grocery
[14:38] Speaker 3: list with this semen of a Kentucky derby winning Stylly.
[14:41] Speaker 1: That's unbelievable.
[14:42] Speaker 3: And you know the only reason we don't have generic
[14:44] Speaker 3: ink in our printers is because it's against the law
[14:46] Speaker 3: to like make modifications to printer firmware so it doesn't
[14:50] Speaker 3: check for generic ink.
[14:50] Speaker 1: But you can buy your don't work.
[14:53] Speaker 3: Reliably, right, and the printer companies push non consensual updates
[14:57] Speaker 3: to your printer that shuts this down. And they've done
[15:00] Speaker 3: all kinds of sleazy things, like HP pushed an update
[15:02] Speaker 3: in March that was a security update that was like
[15:05] Speaker 3: a Manchurian candidate, a sleeper agent. It sat there until September,
[15:10] Speaker 3: didn't do anything, waited for all the parents to go
[15:12] Speaker 3: to Costco and buy back to school kits of generic inc.
[15:16] Speaker 3: And then it detonated and all that ink was useless. Right,
[15:19] Speaker 3: So they're trying to like send a message to America's parents,
[15:22] Speaker 3: don't buy generic inc. Ever, you never know when it's
[15:26] Speaker 3: going to stop working. They were like maximizing the pain.
[15:28] Speaker 1: Here unbelievable, absolutely unbelievable. So literally had to have a
[15:33] Speaker 1: conversation with the powers that be to figure out how
[15:37] Speaker 1: to say the title of your book, which ironically has
[15:41] Speaker 1: been named the word of the year in two separate
[15:46] Speaker 1: major three three I found two in.
[15:49] Speaker 2: My two dictionaries, but three countries, three countries.
[15:52] Speaker 1: Yeah, so let's talk about in shitification. How do you
[15:57] Speaker 1: define it sure in a way that we can broadcast
[16:00] Speaker 1: without running a foul of the of.
[16:01] Speaker 3: Course, well, you know, working for the Electronic Frontier Foundation,
[16:06] Speaker 3: as I have for so long, my job has really
[16:08] Speaker 3: been about trying to raise the salience and the urgency
[16:12] Speaker 3: of these digital issues that are very abstract, very technical.
[16:15] Speaker 3: You know, they eventually become very concrete, but it's when
[16:17] Speaker 3: your house is on fire. You kind of want people
[16:19] Speaker 3: to get active before then. And so that's a game
[16:22] Speaker 3: of coming up with similesm metaphors and framing devices, funny words,
[16:26] Speaker 3: parables and so on. And the latest of these is
[16:28] Speaker 3: this one in shitification. And in shitification is both observation
[16:34] Speaker 3: about how things go bad and also a theory about
[16:37] Speaker 3: why they're going bad. And so the observation is quite straightforward,
[16:41] Speaker 3: and in the first phase you have firms that are
[16:43] Speaker 3: good to their end users, but find a way to
[16:45] Speaker 3: lock those users in. In the second phase, they make
[16:48] Speaker 3: things worse for those end users, and they rely on
[16:50] Speaker 3: the lock in to stop those end users from departing,
[16:53] Speaker 3: and they make things good for business customers. In the
[16:55] Speaker 3: third phase, they lock in those business customers and extract
[16:58] Speaker 3: all of their surplus as well. They leave behind the
[17:01] Speaker 3: kind of meanest homeopathic residue needed to keep users locked
[17:04] Speaker 3: to the platform, businesses locked to the users, and they
[17:07] Speaker 3: extract everything for themselves and they turn into a palocrap.
[17:10] Speaker 3: That's the kind of observational end of it. But the
[17:13] Speaker 3: question I want to interrogate is why is it happening now?
[17:17] Speaker 2: Right? Because we didn't invent greed in the middle of
[17:19] Speaker 2: the last decade.
[17:19] Speaker 3: The people running these companies are often the same people
[17:21] Speaker 3: around them from day one. You know, Mark Zuckerberg was
[17:24] Speaker 3: running Facebook from his Harvard dorm to today, and he
[17:27] Speaker 3: owns the majority of the voting shares. Google actually got
[17:29] Speaker 3: worse when Sergey Brin came back in terms of its
[17:32] Speaker 3: path to platform decay. So what is it that made
[17:35] Speaker 3: these companies bad now? And I think really the way
[17:38] Speaker 3: to understand that is to ask the inverse, which is
[17:40] Speaker 3: why weren't they worse before? Because obviously firms would like
[17:44] Speaker 3: to charge more, deliver less, pay less to their suppliers,
[17:49] Speaker 3: pay less to their employees, seek more beneficial terms of themselves.
[17:52] Speaker 3: And when you freeze it that way, you know why
[17:54] Speaker 3: firms don't do it. Because if you charged infinity and
[17:57] Speaker 3: paid nothing, well, maybe you'd be running a scholarly journal.
[18:00] Speaker 3: But if you're not running a scholarly journal, no one
[18:02] Speaker 3: would do it right. You would lose your employees, you'd
[18:05] Speaker 3: lose your customers. You have to labor under the discipline
[18:09] Speaker 3: of competition of regulators, and if you're in tech, you
[18:13] Speaker 3: had other sources of discipline, like interoperability, the ability to
[18:16] Speaker 3: make two programs work with each other. So maybe if
[18:18] Speaker 3: you had a rent extraction scheme, some would alienate your
[18:21] Speaker 3: users from you by coming up with a plugin that
[18:24] Speaker 3: made it possible for them to avoid that rent extraction scheme,
[18:27] Speaker 3: and those customers would then discover that there was a
[18:30] Speaker 3: better firm out there, and they might switch to becoming
[18:32] Speaker 3: the customers of them. And you had to worry about
[18:34] Speaker 3: your workers because tech workers were so powerful and they
[18:37] Speaker 3: often really fought hard for their users. They cared about
[18:39] Speaker 3: their jobs. And so my thesis is that when we
[18:42] Speaker 3: dismantled these sources of discipline, we created what you could
[18:45] Speaker 3: call the eshridogenic policy environment, right, the environment that rewards
[18:50] Speaker 3: the firms that do the worst, that rewards the factions
[18:53] Speaker 3: and the firms that advocate for the worst, that rewards
[18:55] Speaker 3: the impulses and CEOs that are tempted to do the worst,
[18:59] Speaker 3: and then the worst happened.
[19:01] Speaker 1: So let's talk about some of these firms, because I imagine
[19:05] Speaker 1: everybody has experienced the title of your book. Platform decay
[19:11] Speaker 1: is the phrase I like to use. I mean, in
[19:15] Speaker 1: my experience, and I'm a few years older than you.
[19:18] Speaker 1: It began with Microsoft, probably the Suez generis first company
[19:26] Speaker 1: that figured out how to lock people in and then
[19:28] Speaker 1: abuse the monopoly position they had. That was followed by
[19:32] Speaker 1: let's go through the list eBay, Google, Amazon, I would
[19:38] Speaker 1: be biased if I didn't include Apple. I think I
[19:42] Speaker 1: can also include Starbucks and other entities like that. I
[19:47] Speaker 1: have a peeve with them because they basically threatened users
[19:52] Speaker 1: with their Starbucks points during the pandemic. I thought that
[19:55] Speaker 1: was very misguided and okay, SIA, that was an easy
[20:00] Speaker 1: platform to Wait, there was an article in the Wall
[20:03] Speaker 1: Street Journal that the Starbucks app, you would load it.
[20:07] Speaker 2: Up with a credit card?
[20:08] Speaker 1: Wait, why don't I have to give you fifty dollars?
[20:11] Speaker 1: Just hit my credit card right, and it turned out
[20:13] Speaker 1: it was a three or four billion dollar interest free
[20:16] Speaker 1: loan there, giving free cash flow. So that was a
[20:19] Speaker 1: little bit of a oh and you want to take
[20:21] Speaker 1: my points? All right, I'm done with you not boycotting
[20:23] Speaker 1: them just they just kind of fell off my first choice.
[20:27] Speaker 1: But let's I'm curious.
[20:29] Speaker 2: They overcook their beings too, right, Well.
[20:31] Speaker 1: If you like strong coffee and don't mind a little
[20:34] Speaker 1: bit of bitterness, sure for sure. But I'm curious what
[20:38] Speaker 1: were your experiences that led to the book. What was
[20:41] Speaker 1: the first platforms that you watched decay?
[20:45] Speaker 3: Well, let me be clarify a little here, because there
[20:49] Speaker 3: is there have been lots of platforms that have decayed,
[20:51] Speaker 3: but they didn't shamble on, right. I think that's one
[20:54] Speaker 3: of the mysteries that I'm trying to plumb here.
[20:55] Speaker 1: Well, there's a difference between a company like MySpace that
[20:59] Speaker 1: just loses out to a superior technology or a better
[21:02] Speaker 1: interface or whatever, versus something where the entire platform follows
[21:09] Speaker 1: the pattern that you've outlined.
[21:11] Speaker 3: And they but but and then they stay in business. Right,
[21:14] Speaker 3: that's the thing that I want to.
[21:15] Speaker 2: Interrogate profitably wildly profitable.
[21:17] Speaker 3: Yeah, so you know, uh, let's think about a few
[21:21] Speaker 3: examples that you just raised and what happened when they hitified?
[21:25] Speaker 2: Right?
[21:25] Speaker 3: So Microsoft, I was you mentioned Apple and you said
[21:28] Speaker 3: you'd be biased if you didn't mention Apple.
[21:30] Speaker 2: I was a kind of.
[21:31] Speaker 3: Cio for hire in the early two thousands, and every
[21:34] Speaker 3: shop that I.
[21:35] Speaker 1: Would a chief info or chief chief info chief.
[21:37] Speaker 3: Info yeah, never chief investor. I invested all my dot
[21:40] Speaker 3: com money wisely in laptops. I'm sure they're going to
[21:42] Speaker 3: appreciate someday.
[21:44] Speaker 2: No, I was.
[21:45] Speaker 3: I was going around helping little SMEs get online. I
[21:48] Speaker 3: put up their land, I get the file server everything.
[21:50] Speaker 3: And they all had a problem, which is that they'd
[21:52] Speaker 3: have a couple of Macs in the shop and they
[21:55] Speaker 3: couldn't read or reliably read or write Microsoft Office files.
[21:58] Speaker 2: Because Microsoftice Microsoft Off. Yeah.
[22:01] Speaker 3: Microsoft Office for the Mac was the most cursed piece
[22:04] Speaker 3: of software to come out of redmand and just wave
[22:06] Speaker 3: the floppy disk around the office and files with spontaneously
[22:09] Speaker 3: go corrupt. And so Eventually you'd go to the designer
[22:11] Speaker 3: and maybe the CEO would have a power Book, and
[22:13] Speaker 3: you put a PC on their desk that was just
[22:16] Speaker 3: for like Excel, Word and PowerPoint, and then that was
[22:20] Speaker 3: kind of unwieldy, so then you put a big graphics
[22:22] Speaker 3: card in there. You'd buy Windows versions of all the
[22:26] Speaker 3: programs the graphic designer used, and you throw away the Mac.
[22:29] Speaker 3: And so Steve Jobs knew that this was a problem.
[22:31] Speaker 3: He didn't just beg Bill Gates to fix Office for
[22:34] Speaker 3: the Mac. He reverse engineered Office for the Mac. He
[22:38] Speaker 3: reverse engineered the Office file formats, and he made iWork
[22:42] Speaker 3: pages numbers in Keynote, which can perfectly read and write
[22:44] Speaker 3: the Microsoft Office file format. So what he did in
[22:47] Speaker 3: economics terms is he reduced the switching costs to zero
[22:51] Speaker 3: because you didn't have to leave any of your files
[22:53] Speaker 3: behind when you went from Windows.
[22:54] Speaker 2: To a Mac.
[22:56] Speaker 3: And he solved the collective action problem of convincing everyone
[22:59] Speaker 3: to move to a Mac because you didn't have to.
[23:01] Speaker 3: You could go to the Mac and other people could
[23:03] Speaker 3: join you when they were ready. This saved apples.
[23:05] Speaker 1: Bacon I recall the famous prey cover of Wired in
[23:09] Speaker 1: nineteen ninety eight and My pet theory, or it's not
[23:13] Speaker 1: even mine, is that Microsoft cut a deal in order
[23:18] Speaker 1: there was already the antitrust doublings. So hey, we have
[23:21] Speaker 1: to keep a legitimate operating system.
[23:23] Speaker 2: Run otherwise controlled opposition. That's right.
[23:25] Speaker 3: Well, yeah, and they ran these switch ads if you'll recall,
[23:29] Speaker 3: oh very much, how easy it us to switch So
[23:32] Speaker 3: this was this incredible moment. Now what would happen if
[23:34] Speaker 3: you did this to Apple? Right, we have people locked
[23:36] Speaker 3: into the iPhone today. Their apps are there, their data
[23:39] Speaker 3: is there, and so on. It's not hard to make
[23:41] Speaker 3: an iPhone emulator that runs on another computer, including like
[23:45] Speaker 3: on an Android device, right, and so you could run
[23:48] Speaker 3: all those apps, you could access all that data if
[23:50] Speaker 3: you did that to Apple today. If you did onto
[23:52] Speaker 3: Apple as Apple had done unto Microsoft, first, they'd hit
[23:55] Speaker 3: you with Section twelve to one of the Digital monam
[23:57] Speaker 3: Copyright Act for circumvention. That's a five h thousand dollar
[24:00] Speaker 3: fine in a five year prison sentence for a first offense.
[24:03] Speaker 3: Then they would call you a tortious interferer with their
[24:05] Speaker 3: contract for violating their terms of service, and they might
[24:07] Speaker 3: hit you with criminal terms of service violation under the
[24:09] Speaker 3: Computer fraud and Abuse Act. They would call you a
[24:11] Speaker 3: copyright violator, they call you a trademark violator, a patent violator.
[24:15] Speaker 3: Maybe if you hired some ex employees, they'd say that
[24:18] Speaker 3: you're going after their trade secrets, and maybe there are
[24:20] Speaker 3: ex employees non disclosures. They would basically nuqu till you glowed, right.
[24:26] Speaker 3: And so it's true platforms went bad all through history,
[24:30] Speaker 3: but they had counter maneuvers.
[24:32] Speaker 2: You know.
[24:33] Speaker 3: It wasn't just that MySpace was outcompeted by Facebook. It
[24:36] Speaker 3: was that when Facebook was trying to lure users over
[24:39] Speaker 3: from MySpace, it gave them a bot, and you gave
[24:43] Speaker 3: that bought your login and password, and it would go
[24:45] Speaker 3: to MySpace several times a day. It would grab everything
[24:47] Speaker 3: in your MySpace feed and put it in your Facebook
[24:49] Speaker 3: feed so you could apply to it and it would
[24:51] Speaker 3: push it back out again. So again you didn't have
[24:53] Speaker 3: to choose between the people that you loved on MySpace
[24:56] Speaker 3: and the superior application that was Facebook. Because Facebook's pay
[25:00] Speaker 3: which at the time was don't use my Space. It's
[25:02] Speaker 3: owned by an evil billionaire. No one wants to use
[25:03] Speaker 3: social media owned by an evil billionaire. Plus, did you
[25:06] Speaker 3: know they spy on you? We're never going to spy
[25:08] Speaker 3: on you at Facebook, right, But you know, no one
[25:10] Speaker 3: is going to just smugly read the superior terms of
[25:12] Speaker 3: service while they wait for their dumb friends to join
[25:14] Speaker 3: them on Facebook.
[25:15] Speaker 2: They're going to be where their friends are. So they
[25:17] Speaker 2: just solved that problem for them. Now.
[25:18] Speaker 3: In the book, I tell the story of an app
[25:20] Speaker 3: called og app was created last year by a couple
[25:23] Speaker 3: of teenagers. They just reverse engineered Instagram. And so you
[25:26] Speaker 3: would give Instagram, you give the app your Instagram logging
[25:29] Speaker 3: and password. It would go to Instagram, pretend to be
[25:31] Speaker 3: You would grab everything in the queue waiting to be
[25:34] Speaker 3: shown to you, and it would throw away the ads,
[25:35] Speaker 3: it would throw away the recommendation, so it would throw
[25:37] Speaker 3: away the boost of content, would throway everything and been
[25:39] Speaker 3: like surfaced from three months ago because it was getting clickbait,
[25:43] Speaker 3: and it would just show you the things that the
[25:44] Speaker 3: people you followed had posted in reverse chronological order.
[25:47] Speaker 2: It was the og app.
[25:49] Speaker 1: It's what Facebook did to MySpace in take they're doing
[25:53] Speaker 1: to a Facebook owned property.
[25:55] Speaker 3: And so within twenty four hours it was in the
[25:58] Speaker 3: top ten on both app stores. Wow, And then that
[26:01] Speaker 3: night Apple and Google shut it down at Meta's request.
[26:04] Speaker 3: No kidding, because now we have these choke points, and
[26:06] Speaker 3: it turns out that there is honor among thieves. Right,
[26:09] Speaker 3: they will all defend to the death one another's ability
[26:13] Speaker 3: to structure whole markets and decide which products can reach audiences,
[26:18] Speaker 3: how profitable those products can be, what they can charge,
[26:21] Speaker 3: whether or not you can even use them. Right, all
[26:23] Speaker 3: of those things are now being privately regulated by entities
[26:29] Speaker 3: that are not winning their markets alone, but rather are
[26:32] Speaker 3: enlisting the state to win their markets. So people have
[26:36] Speaker 3: different views about how much industrial policy we should have
[26:39] Speaker 3: and so on, but nobody I think that I know
[26:42] Speaker 3: of is like, we should have industrial policy, but the
[26:44] Speaker 3: way that it should work is that the government should
[26:46] Speaker 3: find some monopolists, pay no attention to what they're doing,
[26:49] Speaker 3: except when the monopolists get angry and then destroy anyone
[26:52] Speaker 3: they're angry at. That is like the weirdest form of
[26:55] Speaker 3: industrial policy I've ever heard of.
[26:57] Speaker 1: And that seems to be the sort of policy we have.
[27:00] Speaker 1: Let's talk a little bit about the crapification of Amazon. Sure,
[27:05] Speaker 1: which the Great revealed to me was during the pandemic
[27:09] Speaker 1: when they would frequently run out of stuff, and then
[27:13] Speaker 1: sometimes it would be at Walmart, sometimes it would be
[27:15] Speaker 1: at Target, sometimes it would be on Instacart. And the
[27:21] Speaker 1: shock of the pandemic to me was, these guys have
[27:25] Speaker 1: been I've had an Amazon account since I got a
[27:28] Speaker 1: gift from a college roommate. I want to say it
[27:30] Speaker 1: was ninety eight something like that, so a long time.
[27:33] Speaker 1: The same with eBay, and suddenly you discovered that Amazon
[27:39] Speaker 1: wasn't the low cost provider. And then the free overnight shipping.
[27:43] Speaker 1: It's like, hey, your shipping day is Wednesday. We'll send
[27:46] Speaker 1: it to you on Wednesday. We'll give it to you
[27:47] Speaker 1: tomorrow for three ninety nine. Wait, this isn't next day
[27:51] Speaker 1: shipping or even two day shipping. And then the last
[27:54] Speaker 1: insults was the advertisement. I was searching, you know, the
[27:58] Speaker 1: little lithium batteries for kifire, Like they're very specific. Durcel
[28:03] Speaker 1: fifty three seventy four. You put that in the search
[28:06] Speaker 1: bar and the first thing that pops up it's a
[28:08] Speaker 1: Dura cell. You click it, you send it, you open
[28:10] Speaker 1: up the package. Wait, this isn't a fifty three seventy
[28:13] Speaker 1: four right, Why you I'm advertising for this exact size
[28:18] Speaker 1: voltage whatever? Why on earth would you show me something else?
[28:22] Speaker 1: And I'm enough of a jerk that I make them
[28:25] Speaker 1: pay me the two dollars and eighty nine cents for it,
[28:28] Speaker 1: and I send it back.
[28:29] Speaker 3: So you remember Lily Tomlin's bits on SNL where she
[28:32] Speaker 3: would pretend to be Ernestine the phone operator doing these.
[28:34] Speaker 2: Commercials for effort.
[28:35] Speaker 3: Well, start on a laughing and she took to been
[28:37] Speaker 3: corrected by so many panantic people, but she started on laughing.
[28:41] Speaker 3: She did it on SNL. She did more segments on
[28:43] Speaker 3: SNL though yes that's it.
[28:45] Speaker 2: Yeah, so it's but yes, I but both.
[28:49] Speaker 3: And she would at the end of these ads for
[28:51] Speaker 3: the Bell system, she would turn to the camera and
[28:53] Speaker 3: she'd say, we don't care.
[28:55] Speaker 2: We don't have to. We're in the phone company. Right.
[28:58] Speaker 3: One of the insights I think that Lena had when
[29:00] Speaker 3: she was in office that really landed was that companies
[29:03] Speaker 3: don't just become too big to fail. They don't just
[29:05] Speaker 3: become too big to jail. They become too big to
[29:07] Speaker 3: care that when they're insulated from consequence, they do this. Now,
[29:11] Speaker 3: what's striking about Amazon is the growth that they've experienced
[29:15] Speaker 3: from rent, right, not from products, but from rent. So
[29:18] Speaker 3: you mentioned the advertisements when I wrote this book. They're
[29:21] Speaker 3: so called ad market, which is the payola market. It's
[29:24] Speaker 3: the payment for placement and a search result. That was
[29:27] Speaker 3: like a thirty two billion dollar business, it's now a
[29:30] Speaker 3: fifty something billion dollar business. This is remarkable growth. And
[29:35] Speaker 3: that's the reason that the first item in your Amazon
[29:38] Speaker 3: search result is on average twenty nine percent more expensive
[29:41] Speaker 3: than the best match for your search.
[29:42] Speaker 1: Or just the ruling item.
[29:43] Speaker 3: It's amazing, sure, and then the top bar twenty five percent,
[29:46] Speaker 3: and then you get down to position number seventeen or so,
[29:49] Speaker 3: and that's where you find the good result. And of
[29:51] Speaker 3: course the companies spending more to advertise have less surplus
[29:56] Speaker 3: to allocate to product quality, and so they're just dominating
[29:59] Speaker 3: these search results, and they're they're shipping bad things to you.
[30:03] Speaker 3: By the same token, every merchant on Amazon is paying
[30:06] Speaker 3: junk fees to list on Amazon, and most of these
[30:09] Speaker 3: fees are listed as option we'll practically speaking, if you
[30:11] Speaker 3: don't pay them, you won't get there. So you have
[30:13] Speaker 3: to do fulfillment by Amazon. You have to pay for prime,
[30:15] Speaker 3: you have to pay for advertising. When I wrote the book,
[30:18] Speaker 3: it was, depending on the estimate, forty five to fifty
[30:20] Speaker 3: one percent in junk fees, and now today in the
[30:23] Speaker 3: New York Times, Tim wu sites fifty to sixty percent.
[30:27] Speaker 3: That's on and I've been through New York Times fact checking.
[30:29] Speaker 3: I think he wouldn't make that. And I've known Tim
[30:32] Speaker 3: since we were in elementary school together fifty years Columbia Professor,
[30:35] Speaker 3: Columbia Professor. We both grew up in Toronto, like all
[30:38] Speaker 3: the best Americans were Canadians.
[30:40] Speaker 1: So in the book, it's funny because I'm assuming the
[30:44] Speaker 1: advertising on Amazon yields a result. In the book, you
[30:50] Speaker 1: talk about how the process of decay got worse and
[30:53] Speaker 1: worse at Facebook and what was it twenty eighteen Procter
[30:57] Speaker 1: and Gamble said we're just going to cut twenty seventeen
[30:59] Speaker 1: two hundred billion dollars in advertising and they source zero
[31:02] Speaker 1: decrease in sales.
[31:03] Speaker 2: Yeah.
[31:03] Speaker 3: So one of the things that Facebook did early on
[31:06] Speaker 3: was allocate a lot of resources to anti fraud because
[31:10] Speaker 3: ad fraud is very easy.
[31:11] Speaker 2: You think about how the.
[31:11] Speaker 3: Ad market works, it's very complicated, and you know, if
[31:14] Speaker 3: you're a publisher and you're getting paid by the click,
[31:16] Speaker 3: you can just fire fake clicks.
[31:18] Speaker 1: On ads, right boy, farms and everything else.
[31:20] Speaker 3: Yeah, yeah, or you know, just websites that don't even
[31:23] Speaker 3: exist that are just loading like they just they only
[31:26] Speaker 3: exist like as a series of API calls that are
[31:29] Speaker 3: then generating click responses.
[31:32] Speaker 2: And so on.
[31:32] Speaker 3: You know, it can be very lucrative, and so they
[31:35] Speaker 3: put a lot of money into policing this, and then
[31:37] Speaker 3: they just drew down that spend because it's expensive, right,
[31:41] Speaker 3: and so you just.
[31:42] Speaker 1: Like, providing a quality product and service is expensive.
[31:45] Speaker 3: And so a million dollars disappeared down the fraud hole. Right,
[31:48] Speaker 3: that's someone else's problem, right, it's not Facebook's problem. I'm
[31:51] Speaker 3: sure Facebook would prefer a fraud free marketplace, but why
[31:54] Speaker 3: bother you know, gold plating their anti fraud.
[31:57] Speaker 1: When one of the biggest advertisers in the purchase the
[32:00] Speaker 1: country says, cutting this out because your ads are garbage,
[32:04] Speaker 1: that's why.
[32:05] Speaker 3: Well they're back now though, Oh they reinstituted it, and
[32:07] Speaker 3: they just have more anti fraud on their own ends.
[32:09] Speaker 3: So they're internalizing those costs. They're doing more auditing on
[32:12] Speaker 3: their end.
[32:13] Speaker 1: Unbelievable. So we talked about Facebook, we talked about Amazon,
[32:18] Speaker 1: got to ask about Uber, which has all sorts of
[32:21] Speaker 1: interesting platform issues. The big one was when the vcs
[32:26] Speaker 1: first realized, hey, we have to stop subsidizing these millennials
[32:30] Speaker 1: and allow the prices to float freely. The one I've
[32:34] Speaker 1: noticed over the past year or two is there's time
[32:38] Speaker 1: as it exists in the universe, and then there's time
[32:41] Speaker 1: on the Uber app waiting for a car that seems
[32:44] Speaker 1: to have no correlation to the actual time. What's going
[32:48] Speaker 1: on with Uber in terms of what they pay people,
[32:51] Speaker 1: surge pricing, and their wonky perspective on time.
[32:57] Speaker 2: So when Uber kicked off, they tapped the cow market.
[33:00] Speaker 3: Specifically, they got Masioshi's son, Star of Stage and Screen,
[33:04] Speaker 3: the man who gave us Yahoo, buying and destroying every
[33:06] Speaker 3: promising web two point zero company, and we work and
[33:10] Speaker 3: these days open aiyes latest round, and he went to
[33:13] Speaker 3: his favorite suckers, the Saudi royal family, and he got
[33:16] Speaker 3: thirty one billion dollars out of them. And then they
[33:19] Speaker 3: lost forty one cents on every dollar for the next
[33:21] Speaker 3: thirteen years and just lit it on fire. But that
[33:24] Speaker 3: did have some salutary effects from their business perspective. It
[33:27] Speaker 3: provoked a lost decade in transit investment all over the world,
[33:30] Speaker 3: because why invest in transit when it's so cheap. They
[33:33] Speaker 3: put medallion cabs out of business everywhere, and they used
[33:36] Speaker 3: predatory pricing to freeze out all but one also ran
[33:41] Speaker 3: ride hail company, which is lyft and then having effectively
[33:45] Speaker 3: cornered a market and spent a lot of money on
[33:47] Speaker 3: policy adventurism. Think about the two hundred and twenty five
[33:50] Speaker 3: million dollars that was spent in California on Prop. Twenty
[33:52] Speaker 3: two to formalize the Workermer's classification allowed them to you
[33:56] Speaker 3: only pay the drivers when they had a passenger in
[33:58] Speaker 3: the car, and they not when they were cruising around,
[34:00] Speaker 3: giving free labor and wear and tear on their cars
[34:02] Speaker 3: to the company. They were able to raise prices and
[34:05] Speaker 3: they were able to lower wages, and to do both
[34:08] Speaker 3: they tap both private data and algorithmic fluidity. So the
[34:15] Speaker 3: labor or the lawyer rather the labor lawyer viena do
[34:18] Speaker 3: ball coin. This term algorithmic wage discrimination. It's when two
[34:23] Speaker 3: workers are offered a different wage based on the algorithm's
[34:27] Speaker 3: estimation of their desperation. And so in the case of Uber,
[34:31] Speaker 3: the way that this works is if you take a
[34:33] Speaker 3: low ball offer, and when you get an offer as
[34:35] Speaker 3: an Uber driver, just a few seconds to say yes
[34:38] Speaker 3: or no, and you've got to figure out like mileage,
[34:40] Speaker 3: minutes and so on. When if you take that offer
[34:43] Speaker 3: and it's lower than your historic rate, then that becomes
[34:46] Speaker 3: a new ceiling and they start to nudge you down
[34:49] Speaker 3: lower and lower.
[34:50] Speaker 1: Really, and that's unbelievable.
[34:51] Speaker 3: Yeah, So drivers they bucket themselves into pickers and ants,
[34:55] Speaker 3: and the pickers are picky, and the ants take everything,
[34:57] Speaker 3: and ants have their wages go down and down and down.
[35:00] Speaker 3: And the idea is to turn every picker into an ant,
[35:02] Speaker 3: because an ant is subsidizing the company.
[35:05] Speaker 2: Right, they're just.
[35:06] Speaker 3: Driving around and around. They're on the road, no matter
[35:08] Speaker 3: how garbage the fares are. It's great for the company.
[35:12] Speaker 3: And of course if you can take a low ball
[35:13] Speaker 3: offer and you can find a passenger who will take
[35:16] Speaker 3: a price gouging offer, then the differences to companies to
[35:20] Speaker 3: sock up. And so we on the passenger side we
[35:23] Speaker 3: have our own version of this where they are doing
[35:25] Speaker 3: all kinds of calculations in the back end to calculate
[35:28] Speaker 3: how desperate we are get to take the ride. Now,
[35:30] Speaker 3: it used to be that they had this whole thing
[35:31] Speaker 3: about how we're going to match supply with demand using
[35:33] Speaker 3: price signals. We'll have surge pricing when everyone gets out
[35:37] Speaker 3: of a dodger's game, we'll crank.
[35:38] Speaker 2: Up the price and that'll drive drivers out.
[35:41] Speaker 3: That's not what they do anymore, right, they do have
[35:44] Speaker 3: surge pricing. They just keep the searge right unless the
[35:48] Speaker 3: drivers won't take it. Now again, if it were lawful
[35:51] Speaker 3: to do reverse engineering modification, you could imagine drivers doing
[35:55] Speaker 3: what they're already doing in other countries, like in Indonesia,
[35:58] Speaker 3: gig riders, because they don't cars. They ride motorbikes there,
[36:01] Speaker 3: and those are the taxis and delivery vehicles and so on.
[36:04] Speaker 3: Those gig riders, they started these little clubhouses because you
[36:06] Speaker 3: need somewhere to pee and to have a cup of
[36:08] Speaker 3: tea and you know.
[36:09] Speaker 2: Working your bike.
[36:10] Speaker 3: And those clubhouses turned into co ops, and the co
[36:12] Speaker 3: ops started commissioning software, and the commissioned software to modify
[36:15] Speaker 3: their dispatch apps.
[36:16] Speaker 2: And it started pretty modest.
[36:18] Speaker 3: It started with the well understood tendency of graphic designers
[36:22] Speaker 3: to torment the rest of us by making all their
[36:24] Speaker 3: type eight point great type on white, right, and all
[36:27] Speaker 3: the older riders are like, I cannot see my goddamn
[36:29] Speaker 3: phone and I'm in traffic.
[36:30] Speaker 2: Make the type bigger and black.
[36:31] Speaker 3: But these days it's stuff like an app that allows
[36:33] Speaker 3: all the riders to say, none of us will take
[36:36] Speaker 3: a ride.
[36:36] Speaker 2: That's a low ball offer.
[36:38] Speaker 3: So automatically calculate the mileage and the per minute when
[36:41] Speaker 3: you get the offer over the air, and just turn
[36:43] Speaker 3: it down automatically so that you can force the algorithm
[36:46] Speaker 3: to force the wage up right. Drivers here can't do that,
[36:50] Speaker 3: not because it's technically impossible, because it's unlawful.
[36:52] Speaker 2: You know the posse would that be unlawful.
[36:54] Speaker 1: It's like a union.
[36:55] Speaker 3: Because you're bypassing the technical protections in the app and
[36:59] Speaker 3: unders section twelve one of the Digital One Name Copyright Act.
[37:02] Speaker 3: That's illegal, even if you're doing so for a lawful purpose.
[37:05] Speaker 3: So the mere presence of what's called an effective means
[37:09] Speaker 3: of access control in the statute creates a zone where
[37:13] Speaker 3: you cannot enter, irrespective of the legitimacy of the reason
[37:17] Speaker 3: for your entry.
[37:18] Speaker 1: That's unbelievable. You would think they could create a very
[37:21] Speaker 1: simple client app where the server is the one that's
[37:25] Speaker 1: doing all of that. It's not, and just do the
[37:27] Speaker 1: calculation and say.
[37:28] Speaker 3: No, yeah, but scraping, So scraping the number right when
[37:31] Speaker 3: it comes in is illegal.
[37:33] Speaker 1: You're not even scraping it. You're just you're seeing it.
[37:36] Speaker 1: You don't have to go to their site and see no.
[37:38] Speaker 2: No, but it's on your device, but on your device. Right,
[37:41] Speaker 2: they're blocking.
[37:42] Speaker 3: Other apps, but they're blocking other apps from reading what
[37:46] Speaker 3: one app. One app by design, one app can't see
[37:48] Speaker 3: what the other app is doing, which is good. You
[37:50] Speaker 3: kind of want that, right, you don't want you don't
[37:52] Speaker 3: want like the malware and your browser seeing your prodcasts.
[37:55] Speaker 1: Right, that's fair.
[37:56] Speaker 3: But you, as the owner of the device could certainly say, well,
[37:59] Speaker 3: I give permission for this, right, But for someone to
[38:03] Speaker 3: write the app that bypasses that control, even with permission
[38:06] Speaker 3: from the owner, is unlawful because that control itself has
[38:10] Speaker 3: its own zone of protection that is not in the
[38:12] Speaker 3: control of the owner of the device. It's in control
[38:15] Speaker 3: of the author of the software. I'll give you a
[38:17] Speaker 3: quick exam.
[38:17] Speaker 1: It's unbelievable.
[38:18] Speaker 3: All the audio books on Audible are sold with these
[38:21] Speaker 3: technical protection measures.
[38:23] Speaker 2: Play.
[38:23] Speaker 3: Yeah, they only play on Amazon's approved apps. They're ninety
[38:26] Speaker 3: percent of the market. That means every time I sell
[38:28] Speaker 3: you an audiobook, I create a switching cost for you.
[38:31] Speaker 3: And so if Amazon screws me and I leave to
[38:34] Speaker 3: you I have to guess whether you're willing to throw
[38:36] Speaker 3: all your audiobooks to follow me.
[38:38] Speaker 1: No. Well, I mean, how many people listen to the
[38:41] Speaker 1: same audiobook twice?
[38:42] Speaker 3: Lots of people big library. Yeah, lots of people are
[38:44] Speaker 3: big library. So here's the thing. If I give you
[38:47] Speaker 3: a tool to move your audiobook library from one app
[38:50] Speaker 3: to another, I the author of the book, and in
[38:53] Speaker 3: this case, I read the book aloud myself in a studio.
[38:55] Speaker 3: I finance the production, I paid the director, I paid
[38:58] Speaker 3: the engineer. This is my copyright from top to bottom.
[39:02] Speaker 2: This is not a lot to do that.
[39:04] Speaker 3: Not only do I commit a crime, but I commit
[39:07] Speaker 3: a more serious crime than you would if you pirated
[39:09] Speaker 3: the audiobook. I face a worse sentence than if you
[39:13] Speaker 3: shoplifted the audiobook on CD at a truck stop. And
[39:16] Speaker 3: we would probably get the same sentence if you and I.
[39:19] Speaker 3: If I were to provide you with a tool to
[39:20] Speaker 3: take the audiobook out of the app, and if you
[39:22] Speaker 3: were to stick up the driver of the truck that
[39:24] Speaker 3: delivered the CD.
[39:24] Speaker 1: Set, that's unbelievable. I have to ask you about general
[39:28] Speaker 1: of AI, the impact on artists and writers, and what
[39:31] Speaker 1: it means in terms of.
[39:33] Speaker 2: Oh We're never going to get this in two minutes,
[39:35] Speaker 2: but let me try.
[39:35] Speaker 1: Go ahead.
[39:36] Speaker 3: So look, the only your boss is insatiable horney for
[39:39] Speaker 3: firing you and replacing you with an algorithm. That has
[39:41] Speaker 3: been true since the time of the Luddites. Bosses don't
[39:45] Speaker 3: like to pay workers, and they're looking for a way
[39:47] Speaker 3: to erode the rights of workers. If we were to
[39:50] Speaker 3: give to creative workers a new right to control AI training,
[39:54] Speaker 3: those workers would still have to sell their labor into
[39:56] Speaker 3: a market of five publishers for studios, three labels, two
[39:59] Speaker 3: companies that control all the apps, and one ebook audiobook company,
[40:03] Speaker 3: and those companies would negotiate change their terms of contract
[40:06] Speaker 3: to non negotiably acquire that training right. They would license
[40:09] Speaker 3: our data to the AI companies, and then they would
[40:12] Speaker 3: buy back the resulting algorithm and try and put us.
[40:14] Speaker 2: Out of business.
[40:15] Speaker 3: However, we do have some remedies to us. So the
[40:18] Speaker 3: first important one is that the US Copyright Office has
[40:21] Speaker 3: said correctly that copyright is only for works of human creativity,
[40:25] Speaker 3: so anything out by a bot excuse my language, is
[40:28] Speaker 3: not eligible for a copyright. And the only thing our
[40:30] Speaker 3: bosses hate more than paying us is having people take
[40:32] Speaker 3: the stuff we make for them and using it without
[40:37] Speaker 3: paying them without their permission. So that's the first thing,
[40:39] Speaker 3: and the second thing is what the Writers Guild taught us,
[40:42] Speaker 3: which is that you can't solve AI with a copyright,
[40:46] Speaker 3: but you can solve it with a union that has
[40:47] Speaker 3: the right for sectoral bargaining right to bargain with all
[40:50] Speaker 3: the studios. And if creative workers are going to advocate
[40:54] Speaker 3: for a new law, let's not make it a law
[40:56] Speaker 3: that our bosses want, which is a new copyright law.
[40:58] Speaker 2: Let's make it a law that our boss's hate.
[41:01] Speaker 3: Which is a sectoral bargaining right for all creative workers
[41:04] Speaker 3: to bargain with all employers in their sector. Because that
[41:07] Speaker 3: actually worked.
[41:10] Speaker 1: That was my conversation with Cory doctor O, author of
[41:13] Speaker 1: the new book in Citification. If you enjoy this conversation,
[41:17] Speaker 1: well be sure and check out any of our previous
[41:20] Speaker 1: six hundred we've done over prior twelve years. You can
[41:23] Speaker 1: find those at iTunes, Spotify, YouTube, Bloomberg, wherever you get
[41:28] Speaker 1: your favorite podcasts.
[41:30] Speaker 2: I would be.
[41:30] Speaker 1: Remiss if iden thank our crack staff who helps us
[41:33] Speaker 1: put these conversations together each week. Alexis Noriega is my
[41:37] Speaker 1: video producer Sean Russo is my researcher. Anna Luke is
[41:42] Speaker 1: my producer. I'm Barry Rittolts. You've been listening to Masters
[41:46] Speaker 1: in Business on Bloomberg Radio.

Shows are listed from Apple Podcasts' charts and directory, and Podcast Index where it is used. Every show and episode belongs to its publisher and plays from the publisher's own feed; this site hosts none of them.