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Big Tech *does* have network effects, but these are actually a tool that can be used to *dismantle* monopolies. Network effects are double-edged swords: if a service gets more valuable as users join, it also gets *less* valuable as users *leave*.

If you want to understand the anticompetitive structure of the tech industry, you'd be better off analyzing *switching costs*, not network effects. Switching costs are the things you have to give up when you leave a service behind.

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These monopolies all follow Big Tech's template of mobilizing monopoly rents to buy or crush all competition.

The differences between the anticompetitive tactics that monopolized these industries are largely cosmetic - swap out a few details and you might well be describing how John D Rockefeller and Standard Oil monopolized the oil markets in the late 19th and early 20th centuries.

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These are the same tactics that every monopolist uses - high-stakes moneyball that creates a "kill-zone" around the monopolist's line of business that only a fool would try to enter. Tech DOES have network effects, but that's not what's behind tech monopolies.

We see monopolies in industries from bookselling to eyeglasses, accounting to cheerleading uniforms, pro wrestling to energy, beer to health insurance.

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Google's scale is driven by acquisitions - Search and Gmail are Google's only successful in-house products. Everything else, from Android to Youtube to the ad-tech stack, was once a standalone business that Google captured.

Monopolies extract monopoly rents - like those delivered by Googbook's crooked ad-tech marketplaces, or Apple/Google's 30% app shakedown - and use them to maintain their monopolies. Google gives Apple billions every year so it will be the default Ios and Safari search.

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Tech monopoly apologists insist there's something exceptional about tech that makes it so concentrated: "network effects" (when a product gets better because more people use it, like a social media service).

They're wrong.

Tech is concentrated because the Big Tech companies buy up or crush their nascent competitors - think of Facebook's predatory acquisition of Instagram, which Zuckerberg admitted (in writing!) was driven by a desire to recapture the users who were leaving FB in droves.

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@imani makes a powerful analogy: Corporations behave (are *constructed deliberately* to behave) as callous, self-maximising, humanity-indifferent artificial intelligence.

From @pluralistic in 2015, locusmag.com/2015/07/cory-doct

“Corporations run on a form of code – financial regulation and accounting practices – and the modern version of this code literally prohibits corporations from treating human beings with empathy.”

As Imani points out, we as a society choose what code those corporations run.

@pluralistic

It sure is! And it wouldn't be that horrible if nearly EVERY SINGLE government & business ENTITIY on earth didn't require internet connectivity (as well as smart phones) for people to access them. THAT'S where I'd like to see some decent regulation. How about requiring those entities to have non-Internet, non-smartphone access for all customers? It's great to embrace future technologies but throwing out the old tried and true to do so is absurd.

@pluralistic once again pointing out the Supreme Court deciding to overrule congress's Telecommunications Act of 1996 in Verizon vs FCC (2002), and deciding that fiber didn't have to be common carrier, deciding that companies had monopoly rights.

since monopolies own most of the local infrastructure, & don't have to share, there's little incentive for other players to come in & improve local situations, to wire up just one neighborhood. they'd be a tiny ISP.

with common carrier, an upstart could service a unserved area, AND have access to the rest of the customer base. and they'd have to reverse-share (at regulated wholesale prices) with the main incumbent carriers too, for the new areas they served.

but nope! monopolies. as far as the eye can see. because of an activist pro-very-big-business pro-monopoly Supreme Court.

If you prefer a newsletter, subscribe to the plura-list, which is also ad- and tracker-free, and is utterly unadorned save a single daily emoji. Today's is "🛀🏾". Suggestions solicited for future emojis!

Subscribe here: pluralistic.net/plura-list

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If you're a Medium subscriber, you can read these - as well as previews of upcoming magazine columns and early exclusives on doctorow.medium.com.

My latest Medium column is "The Rent’s Too Damned High," about the long con of convincing Americans that they will grow prosperous through housing wealth, not labor rights

doctorow.medium.com/the-rents-

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You can also follow these posts as a daily blog at pluralistic.net: no ads, trackers, or data-collection!

Here's today's edition: pluralistic.net/2021/06/10/fli

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My first picture book is out! It's called Poesy the Monster Slayer and it's an epic tale of bedtime-refusal, toy-hacking and monster-hunting, illustrated by Matt Rockefeller. It's the monster book I dreamt of reading to my own daughter.

pluralistic.net/2020/07/14/poe

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My ebooks and audiobooks (from @torbooks, @HoZ_Books, @mcsweeneys, and others) are for sale all over the net, but I sell 'em too, and when you buy 'em from me, I earn twice as much and you get books with no DRM and no license "agreements."

craphound.com/shop/

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My book "How to Destroy Surveillance Capitalism" is a critique of Big Tech connecting conspiratorial thinking to the rise of tech monopolies (proposing a way to deal with both) is now out in paperback:

onezero.medium.com/how-to-dest

Signed copies here:
darkdel.com/store/p2024/Availa

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My latest novel is Attack Surface, a sequel to my bestselling Little Brother books. @washingtonpost called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance."

Get signed books from @darkdel: darkdel.com/store/p1840/Availa

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