This is On the Media. I'm Brooke Gladstone with the great Cory Doctorow. We've outlined the three steps taken by big digital media platforms like Facebook, Amazon, TikTok, and Twitter to get richer and get worse. This is the part where you explain, I guess, why the corrosion and corruption in the service provided by these huge platforms is not just possible, but inevitable.

Before we do that, do you want to push against the idea that big digital is just different from everything that ever came before? Sean Parker, the founder of Napster, and the first founding president of Facebook, wrote a mea culpa about using the ability to leverage dopamine, a neurotransmitter that makes us feel so good to steal our time and attention. You've written that tech exceptionalism isn't where we should go for our answers.

Cory: Neurotransmitters are real, but stimulus regresses to the mean. It is absolutely true that the first time I read an Upworthy headline, like Seven Amazing Things About Your Socks, You Won't Believe the Third one. I was like, "I really want to find out about the third one," but by the time I'd seen that headline 200 times, maybe it's true, they've established a foothold on human free will.

Maybe it's true, and this is the more likely explanation given the historic evidence, is they found a small temporary advantage that will erode over time just like $10.99 maybe didn't seem like $11 at one point. Today, for all, but the smallest children, $10.99 is indistinguishable from $11. Let us at least ponder the possibility that they aren't evil sorcerers, but rather ordinary mediocrities who've managed to corner a market.

Brooke: Now, let's talk about what is undeniably different about digital.

Cory: Sure.

Brooke: The speed in which they can change the game.

Cory: Absolutely. I call this twiddling, and we get back to this idea of evil sorcerers versus ordinary mediocrities. If JPMorgan or John D. Rockefeller wanted to bankrupt a ferry line by laying a railroad line and offering below-cost shipping to make sure that the ferry goes out of business and no longer competes with them, they don't get to click a mouse and lay some track.

When Jeff Bezos wanted to stop diapers.com after they left his offer to buy them out, he clicked a mouse and lost 100 million dollars selling diapers below cost. As soon as diapers.com was broke, he clicked a mouse and the price went back up again. It is not that the new generation of tech barons are doing anything that the old generation of tech barons didn't want to do. They're just doing it faster with computers.

Brooke: The reason that the big platforms can do what they do is because they are monopolies, and you wrote that the best time to prevent monopoly formation was 40 years ago, and the second best time is now.

Cory: During the golden age of antitrust enforcement, which is loosely speaking like FDR to Reagan, there were a large number of bases on which we attacked monopolies and tried to prevent them from forming. That revolved around things like whether a company would gain too much political influence or whether it would be able to abuse its workers, or whether it would foreclose on innovation. In the Reagan era, this kind of fringe figure named Robert Bork, who you may remember as the guy that Reagan tried to put on the Supreme Court and failed, he wrote this genuinely bizarre book called The Antitrust Paradox. He argues two things. That monopolies are often formed because they're efficient, and therefore, fence out all the competitors, and we don't want to punish efficient companies. Then he makes another argument that is just bizarre, which is that Congress knew this, and never wanted to fight monopolies.

Brooke: Huh.

Cory: This is just not true.

Brooke: Had he ever heard of Teddy Roosevelt?

Cory: More to the point, John Sherman, Tecumseh Sherman's brother, who in 1890 when he was stamping for the Sherman Act in front of the Senate, and let me get this quote for you. He said, "If we would not endure a king as a political power, we should not endure a king over the production, transportation, and sale of the necessaries of life. If we would not submit to an emperor, we should not submit to an autocrat of trade."

This is not a man who's concerned about efficiency. This is a man who's concerned about power and about the corrupting influence of large firms and the autocrats who run them. Bork makes these two arguments, but there's really no question about what the statutes say. The Sherman Act, the Federal Trade Act, the Clayton Act, these are very clear that monopolists are able to seize the power of democratically accountable lawmakers and gather to themselves.

We see this. AT&T ruled until 1982. The first attempt to break up AT&T was 69 years earlier. IBM went through a 12-year antitrust hell, 1970 to 1982, and every year outspent the entire Department of Justice Antitrust Division on outside counsel. They called it antitrust's Vietnam. Allowing a monopoly to form is allowing a concentration of power to occur, that if in hindsight you decide is dangerous, is very, very hard to diffuse again, because the monopolies become too big to fail and too big to jail.

Brooke: We're talking about monopolies, but let's pivot to monopsonies because, if a single dominant seller is a monopoly, a single dominant buyer is just as powerful when it comes to screwing up a genuinely free market.

Cory: That's right.

Brooke: That brings another platform into the discussion, Spotify. You have this orgy of mergers and acquisitions. You have three big record labels, Sony, Warner, and Universal. In the late aughts, when Spotify was trying to get off the ground, especially in the US, it made a deal with the big three.

Cory: Yes. Spotify goes to Sony, Warner, Universal, 70% of all the sound recordings in their portfolios, which they didn't invest in, they bought from other companies when they bought those companies and mergers. That would have been illegal before Ronald Reagan. They say to these three companies, "What's it going to take to get your music on our service?" The three companies say, "We're going to be your business partners. We're going to take a big equity stake. You're going to love that because we want those royalty rates to be as low as possible, a fraction of a penny per track."

These big three record labels, once they're co-owners of Spotify, can take money out of Spotify as licensors, and that money has to be shared with the labor force who made the music, or they can take it out of shareholders. That money, they don't have to give it to the workforce if they don't want to, the musicians who made the works. The more they charge for the music you listen to on Spotify, the less their shares are worth.

Brooke: You're describing record companies making money at the expense of their own artists by joining Spotify and keeping the price of access to music unreasonably low.

Cory: They also insisted that no one else get paid more than them. For the 30% of independents and small labels, they got the same low per-stream rate. They didn't get free inclusion in playlists, they didn't get free advertising. They didn't get minimum monthlies, and they certainly didn't get shares that were suddenly worth billions of dollars at Spotify's IPO.

Brooke: The big three, they got all of that.

Cory: Again, remember, historic antitrust contours prohibited manufacturers from offering preferential terms to a single retailer.

Brooke: Now, these enormous record companies could take a parcel of their huge profits and award them to particular musicians, which reminds me of a theory you love called the giant teddy bear theory.

Cory: I grew up going to a great little carny in Toronto called the Canadian National Exhibitions, the CNE. By 10:00 AM, there'd be someone walking around with a giant teddy bear that they won by throwing three balls in a peach basket. As hard as you tried, you could never match the feat. How did they get this giant teddy bear, and why? Basically, the carny made sure they won.

The first person who came along and looked like a likely mark, they'd say, "Tell you what, sir, I like your face. You get just one ball in the basket. I'll give you a key chain. If you do it again, I'll let you trade two key chains for the giant teddy bear." The point was, that if you carry that giant teddy bear around all day, other people are going to go, "Hey, I can get a giant teddy bear too." This guy is lugging around this conspicuous teddy bear doing the marketing for the rigged game.

Where you see Joe Rogan getting $100 million for his podcast, or where you see TikTokers who have these incredible success stories, or back when Kindle was getting off the ground, there were independent authors who went to Kindle and were reported these incredible findings. Substack, all of those early Substack writers who were guaranteed a minimum monthly were talking about how Substack was the future of journalism. Really, all that was happening is they were being the giant teddy bear.

Brooke: You say the big teddy bear theory plays out big on TikTok.

Cory: Even TikTok's critics admit, that it's pretty good at guessing what you want. That's why most people who use TikTok just tune into the recommendation feed. People find themselves going viral because so many people have tuned into this algorithmic feed. The assumption had been this is what America wanted to see right now, and so America saw.

Then a reporter from Forbes revealed the existence of something called the heating tool. It's just a knob that someone at TikTok twiddles to say, "We're going to stick this in front of a lot of people, even though the algorithm doesn't think they'll like it." This is a way of temporarily allocating a surplus, giving goodies to the kind of performer that they want to become dependent on TikTok.

Maybe they want sports bros. They find a few of these guys and they give them giant teddy bears. You're viral. 10 million views every video you post. Are you really going to make two different videos, one for YouTube and one for TikTok, especially when you're getting 10 times the traffic on TikTok? TikTok's got this idiosyncratic format. You really got to customize it for TikTok. It's not really practical to make it for Instagram, YouTube, and TikTok. Maybe you'd become a TikTok-first performer. Then they can take it away from you.

If they decide they got enough sports bro content, and now they want to get astrology influencers, they can stop promoting, stop heating the sports bro content and start heating the astrologer content. Also, it's impossible to tell whether a performer or writer or creative worker on one of these platforms like Substack, who's getting a giant payout, whether they've been given a giant teddy bear, whether they even know.

In fact, and now we're getting into counter-twiddling, if you get aggressive enough in trying to figure out how they're determining whether or not your videos will be shown to your subscribers, if you start to pull apart their app to see if you can find the business rules, they will start to come after you for violating Section 1201 of the Digital Millennium Copyright Act, which broadly prohibits reverse-engineering, violating the Computer Fraud and Abuse Act for tortious interference with contract, for a trademark violation, patent violation, copyright infringement. Again, this just boils down to felony contempt of business model.

Brooke: I don't know what that is.

Cory: That's just the idea that, even if Congress never passed a law saying, never displease a shareholder, that you can mobilize existing laws like copyright law to say that displeasing a shareholder becomes illegal. Let's talk about iPhones just for a second. I make an app for an iPhone. You own an iPhone. You spend $1,000 on that iPhone. I made the app, and I hold the copyright to it.

I don't want to share 30% of all my revenue with Apple, and you don't think I should have to, so I give you the app and a tool that allows you to install it on your iPhone, which belongs to you. I, the copyright owner, by letting you use my copyrighted work, violate copyright law.

Brooke: It's amazing that people who talk about the free market lock it up so tight that it can't be responsive to the consumers that are supposed to operate it.

Cory: Oh, it's even worse because it's not just that Apple, like all capitalists, hates capitalism when they're on the pointy end of it, it's that Apple did the thing that they would now sue you for to other companies. If you think about when Microsoft Windows reigned supreme in the Office and Macs were getting harder and harder to use because Word for the Mac or Office for the Mac was so bad?

The way Steve Jobs resolved that was by having some of his technologists reverse-engineer Microsoft Office and make iWork that read and write Microsoft Office's files. When Apple did it, that was progress. When you or I do it, that is theft.

Brooke: The FTC has lawsuits against Facebook, and the Department of Justice has an antitrust case against Google where twiddling resulted in undetectable fraud. Is there some accountability afoot?

Cory: Let's go back to the best time to fight monopolies was 40 years ago and the second best time is now. I think the world of the antitrust enforcers in the Biden administration, Lina Khan, is extraordinary.

Brooke: The head of the Federal Trade Commission.

Cory: That's right. She was a third-year Yale Law student just a couple of years ago, and she wrote this paper that was a direct answer to Robert Bork. Bork's book was called The Antitrust Paradox. Her law review paper was called Amazon's Antitrust Paradox. It was such a stinging rebuttal to Bork that it set the whole antitrust theoretical world on its ear.

Just a few years later, she is the youngest-ever chair of the Federal Trade Commission. She found things like Section 5 of the Federal Trade Commission Act, which wasn't that hard to find. It's right between Section 4 and Section 6 but hasn't been used in 40 years. It's the article that gives the Federal Trade Commission broad latitude to act against deceptive and unfair practices.

That's the basis on which she promulgated a rule banning non-compete agreements. We are seeing in Khan what a skilled technocrat can do. If you know where the levers are, and you're not afraid to pull the levers, you can make incredible things happen. We are in an incredible moment for antitrust where every department is now being asked to use its legislative authority to go ahead and act to reduce monopoly and monopoly power across the entire economy.

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Brooke: Coming up, Cory and I finish our conversation with some talk about solutions. This is On the Media.