What is “Enshittification” of Tech Companies? With Author Cory Doctorow

Key Takeaways

"Enshittification" describes online platforms degrading user experience to extract value.
Platforms degrade in three stages: attract users, exploit users, then exploit businesses.
Eroded market forces, like competition and regulation, allow companies to thrive despite poor practices.
Structural changes and collective action are crucial to combat platform degradation.
Proactive safeguards and worker unions prevent future compromises and enshittification.

The term "enshittification," coined by Cory Doctorow, describes the decay of online platforms.
Its origin stems from Doctorow's personal frustration with unreliable internet service and a poorly designed TripAdvisor website during a vacation.
The concept aims to provide a relatable framework for discussing critical digital rights issues.
The podcast introduced guest Cory Doctorow, author of "Enshittification: Why Everything Suddenly Got Worse and What to Do About It," to discuss this phenomenon.

"Enshittification" is a three-stage process where platforms degrade user experience to extract value.
The process begins with attracting end-users, then exploiting them once they are locked in, exemplified by Facebook contrasting itself with MySpace.
The second stage involves exploiting business customers, like advertisers, by reducing content reach and increasing ad prices after incentivizing direct posting.
The final stage extracts maximum value from both users and businesses, leading to increasing ad costs and decreasing effectiveness, as seen with Procter & Gamble's significant savings after reducing programmatic ad spending.

The guest defines "enshittification" as a platform mistreating users and thriving as a consequence, challenging traditional market principles.
Drawing on Adam Smith's theory, the guest explains that specific policies have eroded natural market discipline where bad practices typically lead to financial decline.
This erosion creates a market environment where mistreatment of customers can paradoxically lead to market gains, which is central to the concept of enshittification.

The conversation shifts to four historical forces that discipline companies: competition, market alternatives, ownership, and the power to regulate, noting the erosion of competition.
Historically, some economic theories viewed monopolies as beneficial, arguing against antitrust laws by suggesting dominance indicated quality.
The guest critiques tech giants like Google for lacking internal innovation, primarily growing through acquisitions such as Instagram, Maps, and ad tech rather than in-house development.

Large, merged companies can achieve regulatory capture, influencing regulators due to a lack of competition and strong coordination.
Dominant companies like Google avoid direct competition, with Google reportedly paying Apple $20 billion annually for search market exclusivity.
Google faced three antitrust convictions in the past year, yet a judge cited emerging AI and chatbots like ChatGPT as potential future competitors, leading to lenient penalties.
The current state of antitrust law is described as problematic, suggesting a need for legislative reform to address flawed reasoning in cases like the dismissal against Facebook regarding TikTok as a competitor.

The guest advises against solely relying on moral integrity to prevent "enshittification," noting that bad decisions often arise from stepwise compromises.
Strategies include implementing a "Ulysses Pact" to preemptively resist future temptations and maintaining open distribution systems.
Other preventative measures involve unionizing workers to resist investor pressure, structuring as a B Corp or worker co-op, and using irrevocable open licenses for content.

While "enshittification" can be used colloquially, its specific technical definition applies to industries with characteristics like software interoperability and historical skilled labor scarcity.
Expanded intellectual property laws have limited reverse engineering, thereby diminishing the workforce's power to counter company practices.
The digitization of non-tech sectors, such as nursing, enables "enshittification" through national apps that exploit data and regulatory loopholes to offer lower wages, creating a 'desperation premium' for nurses with debt.

Systemic change to combat "enshittification" requires collective action and policy alteration, rather than individual consumer choices.
The guest advises joining groups that politically work to change the policy environment, citing the Electronic Frontier Foundation (EFF) as an example.
Cory Doctorow, a science fiction novelist, envisions alternative tech futures where social connections are private, app stores are fairer, and search engines do not collect excessive personal data, rather than being anti-technology.