A few years ago, Cory Doctorow coined a word that took the internet by storm. It appeared everywhere, including in our newsletter that analyzed why dating apps are breaking the hearts of their users. The American Dialect Society named it its word of the year in 2023. Merriam-Webster even added it to its dictionary — despite it having a swear word in it.
The word Doctorow coined is “enshittification.” And, naturally, that’s also the title of his new book.
Enshittification is more than just a catchy word, describing when companies turn to crap. For Doctorow, a long-time internet activist and journalist, it describes a specific process he sees in the evolution — or, really, the devolution — of internet platforms, like Facebook, Google, Uber, and Amazon. (Disclosure: Google and Amazon are financial supporters of NPR and Amazon pays to distribute some of our programming.)
Jaque Silva/NurPhoto via Getty Images
The Stages Of Enshittification
In his new book, Doctorow argues there’s a pattern in how these platforms operate. The companies behind these platforms are basically middlemen, connecting their users with businesses that want to make money from these users. So, for example, Facebook and Google connect their users with advertisers. Amazon connects its users with third-party merchants on its marketplace.
Stage 1 is when these platforms are new and want to entice users onto their platforms. They are flush with investor cash, face less pressure from shareholders to make immediate profits, and are in a race to convince people to sign up. This is when the platforms are really good to their users.
For example, in its early days, Facebook told users that they wouldn’t spy on them and harvest their data the way they said MySpace did. And they offered “a feed of things that users wanted to see, rather than things that businesses would pay to show them,” Doctorow writes. For a while at least, Facebook was “fun and useful and valuable.”
Amazon and Uber offered consumers incredible deals during their stage 1. Like others before him, Doctorow alleges these deals were so good that they amounted to “predatory pricing,” or when companies charge below-cost, unsustainably low prices aimed at putting their competitors out of business.
Stage 1 is all about achieving scale and locking in users. The platforms want to grow and benefit from what economists call “network effects.” That is, the more users they have, the more valuable their platform becomes. These platforms, Doctorow writes, also benefit from “high switching costs,” which mean that their users find it hard to leave and switch services.
With Facebook, for example, leaving the platform and going to another social network means trying to convince your friends and family they should leave and go somewhere else too. With Prime, Amazon gets consumers to pay for free shipping up front, incentivizing them to keep using their platform. And, if you’ve ever bought e-books or movies on their platform, you can’t take them with you when you leave.
Stage 2: Being Good To Business Customers
After these platforms achieve scale and lock in a large user base, they enter stage 2. That’s when the companies start trying to entice business customers onto their platform by being really good to them — at the expense of their users.
For Facebook, Doctorow writes, this meant changing the feeds that users saw. Facebook began using user data to target them with precise ads. Advertisers loved it. And they got publishers to publish short excerpts of their articles, and Facebook would “nonconsensually cram those excerpts into the eyeballs of users who never asked to see them.” This was a great deal for publishers, who became increasingly dependent on Facebook for traffic.
Likewise, Amazon provided a great deal to its business customers. “Amazon paid full price for their goods, then sold them below cost to its customers,” Doctorow writes. “It subsidized returns and customer service, too. It ran a clean search engine, which put the best matches for shoppers’ queries at the top of the page, creating a path to glory merchants could walk merely by selling quality goods at fair prices.”
With users and businesses locked in to their platforms, that tees up Stage 3, when the companies start trying to recoup their investor cash and actually start trying to make a lot of money.
Stage 3: When Everything Turns To Crap
Stage 3 is when these platforms tighten their grips on business customers, squeezing money out of them.
Facebook, Doctorow writes, began forcing advertisers to pay more for ad services and provided those advertisers with lower quality ad targeting. Wanting to keep internet traffic on their platform, they began forcing publishers to publish longer and longer excerpts of their articles in order to appear in user feeds. And they started charging them to “boost” their content in order for large numbers of users to see it, even when users had explicitly followed these publishers and signed up to see that content.
“Meanwhile, for users, things kept getting even worse,” Doctorow writes. They were fed an algorithm not of stuff they had signed up to see, but rather one filled with "content people paid to put there: ads and boosted content.”
We reached out to Facebook (Meta), and they didn’t respond for comment.
Amazon, Doctorow writes, began using its data on merchants’ sales to “clone” their products. He asserts Amazon began gaming their search algorithm to benefit themselves. And Doctorow asserts Amazon began charging merchants junk fees. “Add all the junk fees together, and an Amazon seller is being screwed out of 45 to 51 cents on every dollar it earns on the platform,” Doctorow claims. “Even if a merchant wanted to absorb the ‘Amazon tax’ on your behalf, it couldn’t. Merchants just don’t make 51 percent margins.” So the merchants have to increase their prices. (We reached out to Doctorow about where he got these numbers, and he cites this 2023 study from the Institute for Local Self-Reliance, a non-profit research and advocacy organization).
Stage 3, he writes, is also worse for consumers in other ways, like search quality. “On average, the first result in an Amazon search is 29 percent more expensive than the best result for your search,” Doctorow claims. “Click any of the top four links on the top of your screen, and you’ll pay an average of 25 percent more than you would for your best match. On average, the best match is located seventeen places down in an Amazon search result.” (Doctorow cites this study and this study).
From the perspective of these platforms and their shareholders, you might call Stage 3 enrichification. But, for users and business customers, Doctorow writes, this is “the end-stage of enshittification, the stage at which a platform turns into a pile of shit.”
Naturally, we reached out to Amazon about Doctorow’s arguments and claims. “The book’s entire theory about Amazon is incorrect,” an Amazon spokesperson says. “Even a cursory look would show that the value Amazon offers customers has only gotten better and better over time.”
In regards to Doctorow's assertion that Amazon “clones” products of smaller businesses, the spokesperson responded, “We follow the same practices as countless other retailers to inform our private brands, and we prohibit employees from using non-public, seller-specific data to determine which private-label products to launch.” About search, they said they do not favor their own products in results. And they say it’s “categorically false” that Amazon introduced “junk fees.” The spokesperson says Docotrow’s figures are “false and misleading because they conflate required selling fees with the cost of optional services — such as logistics, customer service, and advertising — that some sellers choose to purchase from Amazon or other providers. Amazon selling fees are 15% or less in most product categories.” And, the spokesperson stressed, the extra fees are optional. “Sellers who choose to purchase optional services from Amazon do so because Amazon provides more value than they can get elsewhere.”
Why Doctorow believes platforms degrade over time
Most of Doctorow’s explanation for why internet platforms have gone down the toilet is hardly novel. While he offers some interesting technical nuances and solutions, his analysis largely comes down to two big factors: a lack of competition and an absence of the right, pro-consumer regulations.
Doctorow argues that these internet platforms have been treating their users and business customers like crap because they can treat them like crap. They can act this way because they don’t fear their users will flee to competitors or that they’ll be sanctioned much by the government.
Put another way, the castles of these companies’ profit engines are protected by moats. Each moat is made of things like network effects and switching costs. Their customers either don’t want to leave en masse or have a hard time escaping. And, at least until recently, the government has proven unwilling or unable to try and storm the castles.
To increase competition, Doctorow advocates for more vigorous antitrust enforcement and abandoning an influential legal doctrine known as “the consumer welfare standard.” This standard was adopted by the courts in the late 20th century. It judges whether companies are monopolies or anti-competitive not based on how big or powerful they are, but on whether they are measurably harming consumers, typically through demonstrably higher prices (We tell the origin story of this standard, and explore the new movement to change it in this Planet Money series about antitrust. Give it a listen).
When it comes to improving regulation, Doctorow offers a number of interesting ideas. One is, essentially, making it easier for users to leave platforms. For example, passing regulations that would allow Amazon Kindle users to take their e-books with them. He argues that this “right-to-exit” would be easy to administer. And it would create real incentives for platforms to be better to their users.
Doctorow also spends a lot of time singing the praises of “interoperability.” It’s a technical computer term that basically means allowing products or services to work with other products or services. One example is printer ink cartridges. In his ideal world, any competitor would be able to make ink cartridges that are compatible — or interoperable — with a given printer. However, in the existing system, makers of printers are able to make it so users must use only their special, very expensive ink cartridges in their printers. This exclusivity is obviously a money-making scheme.
The tech companies have made it so many of their products and services are not interoperable with each other. iPhones won’t run Android apps. Bluesky users can’t DM their old Twitter contacts. Doctorow suggests these are artificial barriers created by companies to maintain their market power, and that regulations have helped them do it.
And, yeah, lefty consumer advocates like Doctorow seem to be mostly losing in today’s America. But he points out that the anti-tech monopoly movement has really gathered steam in recent years, including overseas. And he believes there are clear policy solutions that are popular, including with many conservatives, that can “reverse the enshittification of the internet.”
Reminder for those of you following along with Planet Money’s Board Game project: We’re going to have a live online chat you can join on 11/1 about the game, the process, and how it’s going. Bring your questions and ideas. Sign up here to get a link emailed to you closer to the date.
Subscribe to Planet Money+ for bonus episodes with behind the scenes takes, extended interviews, and extra facts we couldn’t fit into the main show. Plus, it’s ad free. You’ll get The Indicator and Planet Money Summer School too - all while supporting our nerdy, ambitious journalism. Learn more at Plus.npr.org/PlanetMoney and start with a free 30-day trial by using the code "freemonth".
The year NYC went broke — In 1975, New York City ran out of money. For a decade it had managed to pay for its hundreds of thousands of city employees and robust social services by taking on billions of dollars in debt. But eventually investors were no longer willing to lend the city any more money. New York teetered on the edge of bankruptcy — the city shuttered more than a dozen firehouses, teachers went on strike and garbage piled up in the streets. Listen here
Government shutdown fallout, price floors, and AI slop against the machine — It’s … Indicators of the Week! The Indicator’s weekly look at some of the most fascinating economic numbers from the news. On today’s episode: Frozen and canceled federal dollars, America’s intensifying tit-for-tat with China, and a sloppy trend infiltrating the music business. (With a pocket full of shells.) Listen here
OpenAI's deals are looking a little frothy — There have been many headline-grabbing AI deals recently: Nvidia investing up to $100 billion in OpenAI. OpenAI promising to buy $300 billion worth of computing power from Oracle. Oracle buying tons of chips from Nvidia. Listen here
You received this message because you're subscribed to Planet Money emails. This email was sent by National Public Radio, Inc., 1111 North Capitol Street NE, Washington, DC 20002
