Some of the notes I took whilst reading the book. Overall I found it an impeccable work, extraordinary. Concise yet deep and broad, energized and sophisticated. Focused. We need more of this!
“Nearly every industry in the world looks like the tech industry: dominated by a handful of giant companies that emerged out of a cataclysmic, forty-year die-off of smaller firms which either failed or were folded into the surviving giants.”
“Forty years ago, countries all over the world altered the basis on which they enforced their competition laws—often called “antitrust” laws—to be more tolerant of monopolies. Forty years later, we have a lot of monopolies.”
“A trust was a way of merging all the dominant companies in a single industry (or even multiple related industries, like oil refineries, railroads, pipelines and oil wells) into a single company, while maintaining the fiction that all of these companies were their own businesses.”
“Chief among these was Robert Bork, who was best known for having served as Nixon’s solicitor general, in which capacity he was complicit in a string of impeachable crimes against the American people, which led to his flunking his senate confirmation hearing, when Ronald Reagan tried to elevate him to the Supreme Court.”
“But “consumer” is only one of our aspects in society. We are also “workers,” “parents,” “residents” and, not least, “citizens.” If our cheaper products come at the expense of our living wage, or the viability of our neighborhoods, or the democratically accountable authority of our elected representatives, have we really come out ahead?”
“Good monopolies don’t want to raise prices, they reasoned, so most of the time, when a monopolist raised their prices it would be because they were caught in a squeeze by rising costs. The last thing the government should do to these poor, beleaguered monopolists was kick them while they were down by accusing them of price gouging even as they were scrambling to get by during an oil crisis.”
“These models were highly abstract and really only comprehensible to acolytes of the consumer welfare cult, who would produce them on demand—for a fee. If you ran a big business and wanted to merge with your main competitor, you could pay a Chicago School economist to build a model that would prove to the regulators at the DoJ and FTC that this would result in a good monopoly. But say that after this good merger was approved, prices went up anyway? No problem: if the DoJ came calling, you could hire a Chicago School economist who’d whip up a new model, this one proving that all the price hikes were due to “exogenous factors” and not due to your price gouging.”
“Unsurprisingly, some of the most ardent believers in this story are already rich. They are captured by the tautology of a providential society: “If I am rich, it must be because I am brilliant. How can you tell I’m brilliant? Well, for starters, I’m rich. Having proven my wealth and brilliance, it’s clear that I should be in charge of things.”” - Sometimes it’s really as simple as this..
“The oil crisis of the 1970s was the movement’s opportunity. Energy shortages and inflation opened a space for a new radical politics, and around the world, a new kind of far-right leader took office; Ronald Reagan in the USA, Margaret Thatcher in the UK, Brian Mulroney in Canada.”
“They sponsored economics chairs and whole economics departments and created the Manne Seminars, an annual junket in Florida, where federal judges were treated to luxury accommodations and “continuing education” workshops on Bork’s unhinged theories. Forty percent of the US federal judiciary graduated from the Manne Seminars, and empirical analysis of their rulings shows that they took Bork’s consumer welfare theories to heart, consistently finding that monopolies were “efficient” and that mergers should be waved through and anticompetitive conduct forgiven.”
Institutional capture
“But of course, all of this is just a sideshow compared to Amazon’s effect on bookselling and all other forms of retail. The company’s market power—captured by selling products at a loss for years, burning investor capital to force others out of business—is reinforced by its Prime program, which holds its best customers hostage to the $150/year sunk cost.”
“The fact that all computers are universal, all capable of running every program, meant that there would always be a way to write a Mac program that could read and write Microsoft Office files better than Microsoft Office for Mac could. And once that program existed in the world, it could be given away or sold to anyone who had a Mac and an internet connection.
If you’re a Computer User of a Certain Age, you know what happened next. Apple launched a cheeky, ballsy ad campaign called “Switch,” which featured Windows users who’d ditched Microsoft and bought Macs, extolling the simplicity of reading and writing their files with iWork, praising the ease of collaborating with Windows users who hadn’t made the switch (yet). From my perspective as an IT professional, who, at the time, was writing purchase orders for millions of dollars’ worth of workplace computers every year, iWork saved Apple.
Microsoft used network effects to get big, and used high switching costs to stay big. Once Apple lowered those switching costs, the network effects no longer mattered so much—indeed, they became a double-edged sword. Every person who got stuck inside Microsoft’s walled garden was a reason for others to join —but every person who escaped that walled garden became a reason for others to leave, too.
Remember, there was nothing technical Microsoft could have done to prevent Apple from reverse engineering its files and making iWork. The deep universality of computers meant that Apple would always be able to blow a hole in Microsoft’s walled garden.
Which is not to say that Microsoft didn’t try. The old Office file formats were a notoriously gnarly hairball of obfuscation and cruft. Even Microsoft struggled to maintain compatibility with all the different versions of Office it had pushed out over the decades.
But here’s the kicker: after Apple successfully launched iWork, Microsoft gave up. It stopped obfuscating Office, and instead, took those Office file formats to a multistakeholder standardization body, and helped create an open, public standard for reading and writing Office files. Today, that standard is everywhere: Google Docs, LibreOffice, iWork, Office and a million websites that can ingest your Office files and turn them into something that lives on the internet.”
“These are the machinations of a company that believes that its most profitable user-retention strategy is to lock its users up. They’re the machinations of a company that is thoroughly uninterested in being better than its competitors—rather, they’re dedicated to ensuring that leaving Facebook behind is so punishing and unpleasant that people stay, even if they hate Facebook.”
1998 Digital Millenium Copyright Act (DMCA)
“That, in a nutshell, is the internet that Big Content wanted—a polite marketplace where no one surprised them by inventing something to help artists and/or audiences unless they cleared it with the cartel first.”
“f we force Mark Zuckerberg—and the leaders of Apple, Google, Amazon, Microsoft, Salesforce and other tech giants—to blast openings into their walled gardens so new entities can connect to their services, we can drain their power.
Every time one of these companies screws you over—by censoring your speech, or by failing to block the speech of someone who’s harassing you, or by cloning your product and selling it over yours, or by blocking you from reaching your subscribers —you can just leave, without incurring the sky-high switching costs they’ve worked so hard to build into the system.”
“When TV came along, radio broadcasters adopted it as an adjunct to their existing services. It was these broadcast companies who insisted that cable should not exist without their permission and control—and never mind that they owed their own existence to their ability to launch a new medium without the consent of the recording artists, who dominated the previous wave of technological progress.” – Hypocrisy - self interest veiled as ethical principles.
“Take Epson, the printer giant. Like most printer companies, Epson makes outsized profits by locking its customers into using its official ink, which is sold at prices that make vintage Champagne seem a bargain by comparison. Of course, Epson’s customers would strongly prefer to pay less for ink, so Epson has to find some way to force them to pay through the nose.
To accomplish this, Epson embeds cheap microchips in its official ink cartridges, which are preloaded with secret cryptographic keys at the factory. When you put an ink cartridge in your Epson printer, the printer generates a random number, a “nonce” —and yes, British readers, I fully appreciate how funny you find this cryptographer’s term of art—and sends it to the chip on the cartridge.
That chip uses its cryptographic key to “sign” the nonce (generating a new number that combines the key and the random number, which is called “hashing”) and sends the signature back to the printer. The printer also has a preloaded cryptographic key, which it can use to verify the signature. If the signature verifies, the cartridge is approved for use and the printer will send commands to it, allowing it to print.
The pandemic triggered mass shortages in microchips, especially cheap, low-powered chips used for applications like this one. It got so bad that some carmakers scoured warehouses for deadstock clothes washers that could be disassembled for their embedded controller chips, which could be repurposed to finish cars that came off the line minus their microchips.
This was a problem for Epson: its printers were designed to block any ink cartridge unless it had an official Epson-configured chip—and it couldn’t get the chips! In the end, Epson started selling chipless cartridges, along with instructions for bypassing its own security chips.”
A farce
“Indeed, the point of these locks is not to stand up to outsiders and prevent them from doing things that are adverse to the interests of Big Tech shareholders. Rather, the point of adding a lock to a product is to gain the right to invoke Section 1201 of the DMCA.
Once the software that powers a product has been wrapped in the thinnest skin of digital locks, then any competitor who wants to alter how that software works—say, to enable you to use third-party ink in your printer or third-party batteries in your phone—has to remove the digital lock.
Section 1201 of the DMCA felonizes removing a digital lock. Thus, the presence of a digital lock constitutes a countermeasure whose legal force is far more powerful than its technical force. Even if you can figure out how to break a digital lock, telling anyone how you did it, or making a tool so they can do it too, becomes a felony.
This represents a seismic shift in our relationship to the products and services we buy. Historically, buying something made it yours to use as you saw fit. If your microwave oven was sold at a discount because it was a low-end model whose turntable was immobilized, you could go out and buy a third-party turntable at Wal-Mart, and the manufacturer didn’t get to stop you.”
“Infrastructure choices cast a long shadow. Take roads: the width of the Roman roads was the width of the wheelbase of Roman chariots, itself a function of the state of the art of Roman metallurgy, which determined the maximum length of a stable axle.
The chariot roads became cart roads, and the cart roads became motor-vehicle roads. Long after we had the ability to extend the wheelbase of a motor vehicle beyond the limits of Roman metal-beating, we were locked into roads that could be served by the blacksmiths of the Classical Age.
The width of the road determined the width of a train container because of intermodal transport, where freight containers are moved from flat railcars to flatbed trucks. Any efficiencies that could be realized by making freight containers wider than what a flatbed truck could handle would be erased by the extra work of unloading that container’s contents and repacking it into one that was road-sized.
So it was that the track clearances along the rights-of-way for railroads were sized to accommodate a freight car, with a little space on either side. Shipping anything wider than a freight car became a complex business, requiring advance scouting along the whole route to make sure the cargo wouldn’t clip a tree branch, utility pole or building.
The design for the Space Shuttle called for the creation of reusable solid rocket boosters, massive cone-tipped cylinders that would lift the Shuttle to 150,000 feet before falling away and floating to the ground on parachutes for recovery and reuse. This worked surprisingly well.
The boosters were built in Brigham County, Utah, and shipped to Florida for takeoff. After each use, they’d be recovered from the open ocean, freighted to port, refurbished and, once again, shipped to Florida.
The boosters were about 150 feet long, but they were precisely 12.17 feet in diameter—because they had to fit on a special railway flatcar for those overland shipments.
The aerospace engineers who sat down to design those solid rocket boosters had a lot of parameters to juggle—the pull of gravity, the efficiency of rocket fuel, the weight of the payload. But mixed in with those parameters, immutable and inarguable was the width of a railcar, which was foreordained by the width of the Roman chariot wheelbase, which was, in turn, determined by the metalbeating know-how of Roman blacksmiths.
Infrastructure casts a long shadow.”
Remarkable, the potentials of historical lock-in are breath taking
“Not so trademark. Trademark has nothing to do with incentives. It is not a reward. It doesn’t even really belong to the company that holds the trademark—the company is merely its custodian.
At root, trademark is a system of consumer protection. The purpose of a trademark is to prevent the public from being deceived when they buy a product or service. Trademark is there to make sure that when you walk into a McDonald’s restaurant and order a Big Mac, you’re in a real McD’s and getting a real Big Mac.
Trademark empowers companies to act on behalf of their customers: companies are empowered to use the courts to shut down copycats who behave in a deceptive manner—who market their products and services in a way that is “likely to give rise to confusion.”
If someone opens a fake McDonald’s restaurant and starts serving fake Big Macs, McDonald’s can use the courts to shut them down with trademark claims, but not to protect McDonald’s —trademark lets them do this to protect you from deception.
It’s a subtle but important distinction. Copyright lets rightsholders defend their own economic interests against competitors who misappropriate their works; trademark lets sellers protect their customers’ economic interests against competitors who seek to trick those customers.
The corollary is that trademark does not protect companies from rivals who use their marks in ways that don’t deceive their customers, even if that ends up hurting the companies that hold the trademarks.
That means you can open a restaurant called “Better Than McDonald’s” and serve a sandwich called the “Better than a Big Mac”—or, as is more common, you can sell a charger cable and advertise “Works with an Apple iPhone.” So long as no one is being tricked into thinking they’re eating a Big Mac at McDonald’s or charging their phone with an Apple cable, no one’s trademark is being violated.”
Accentuating this next section as it stood out in shocking ways
“But more than that, controlling repair lets Apple control the cadence of your replacement of your devices, because it lets Apple decide when a phone can be repaired at all—and, unlike an independent repair depot, which might declare your phone beyond repair and offer you a nice deal on an Android phone or a used iPhone, Apple can control the whole end-of-life experience, declaring your phone dead and offering you a trade-in on this year’s iPhone model.
This is a great deal for Apple, and not just because the corporation gets to force an upgrade, but also because it gives Apple control over the disposal of your ex-phone. Apple—uniquely among major manufacturers—has a policy of shredding devices consigned to it for recycling, which ensures that no parts can be harvested from old phones and used to patch up other devices.
But even with this “recycling” scheme, lots of Apple devices reach the end of their lives without being turned in to Apple for annihilation. These were distributed around the Pacific Rim, where low-wage workers break them down and harvest their parts, which are collected, packaged and shipped back to the USA (this is a surprisingly common practice—a lot of third-party printer ink cartridges use “security chips” extracted from official, manufacturer-supplied cartridges).
These are real Apple parts, tested and fit for service. They embody tons of conflict minerals and immortal plastics, as well as gigawatts of energy. These aren’t just diverted from a landfill when they’re rescued and sent back stateside—they also rescue phones from the scrapheap, as independent technicians, working with third-party manuals (like the ones that iFixit makes through tearing down and reverse engineering Apple devices) to fix Americans’ phones.
This is a big problem for Apple. Honestly, you couldn’t ask for a more flagrant case of felony contempt of business model. An iPhone that is fixed by an independent technician is bad for Apple’s shareholders in so many ways: first, because they lose out on the windfall profits they’d receive from charging for brand-new parts and labor; second, because they lose on the chance to coerce an upgrade out of a customer by declaring a phone to be beyond repair; and finally, because they lose the opportunity to offer a trade-in on the phone that keeps the customer locked into Apple hardware (independent repair shops will often cheerfully offer a trade-in credit that customers can apply to used or new phones from any manufacturer, and will assist in moving Apple data to Android and vice versa).
Enter trademark. If you have an iPhone handy and you want to see something few people have ever seen, crack it open. You can do this by microwaving a beanbag and wrapping it around the phone to melt the glue and then using a “spudger” tool to pry the case apart, or you can opt to use Apple’s own kit, which weighs 80 pounds and is shipped to you in two Pelican cases, which you have to ship back to the company or forfeit a $1,200 credit-card hold. Or you can just hit it with a hammer (wear eye- and hand-protection!).
Once you’re inside the phone’s guts, get a magnifying glass and start checking out the parts. They’re precisely manufactured to extremely fine tolerances—and they are engraved with minuscule (and even microscopic) Apple logos.
As noted, almost no one will ever see these—they are not there for human consumption. They exist for the purposes of invoking trademark. Apple claims that anyone who harvests these parts and ships them to the United States is violating its trademarks. They argue that the ant-sized Apple logos on those parts are a signal to consumers: this is an Apple product, and will be as reliable and well made as any other Apple product.
They argue that because the reclamation and refurbishment process produces parts that might be almost undetectably less reliable than using factory-fresh parts, prospective purchasers are being deceived as to the quality of these parts, even though they are being sold as “refurbished.” This, says Apple, is a special kind of trademark violation called “tarnishment,” by which they mean something weird and circular like: “Apple makes a high-quality product; when that product is refurbished by randos, it might become a low-quality product. Consumers who are burned by this will come to associate the Apple logo—which we engraved in miniature on all those parts—with low-quality goods and will therefore struggle to make accurate assessments of our products in the marketplace.”
So, they say, to prevent consumers from being confused, they argue that US Customs should seize and destroy these refurbished parts at the US border. And the whole thing turns on the existence of those infinitesimal Apple logos, engraved on the parts.
Apple’s use of trademark to clamp down on refurbished parts is an example of how clever lawyers can deploy multiple, overlapping legal theories to create impregnable felony-contempt-of-business-model regimes.
Apple uses patent to prevent the independent manufacture of some parts; it uses anti-circumvention to prevent the independent installation of other parts; it uses contractual arrangements with recyclers to ensure that most used phones are not broken down for parts; it uses trademark to block the re-importation of parts that have escaped the recyclers’ shredders.
This is what I mean when I say there’s a “thicket” of laws that stand in the way of interoperability. Reforming any one of these laws would make a difference, but to actually clear the way for interop, we need to reform all of them. But that’s a tall order.
So pertinent, and immeasurably important!
“In 2012, when Massachusetts voters went to the polls, they got to vote on an automotive right-to-repair (R2R) ballot initiative. Normally, participation in these ballot initiatives is very low, but record numbers of Bay Staters who marked their ballot papers in 2012 weighed in on the R2R question. All told, 80 percent of them voted in favor of automotive R2R, which would force the auto manufacturers to share access to diagnostic information with independent mechanics, so any certified mechanic could fix your car. You wouldn’t be locked into taking it to the manufacturer.
The state legislature duly enacted a R2R bill along the lines of the ballot initiative, but left a curious loophole. Under the law, automakers were required to give mechanics access to diagnostic information on their cars’ internal wired networks.
The automakers promptly retooled and started sending diagnostic information over their vehicles’ wireless networks.”
Further Reading, Listening and Viewing
I have attended hundreds of conference talks and presentations on the subjects of this book, and a few stand out as significant:
- Yochai Benkler: After Selfishness—Wikipedia 1, Hobbes 0 at Half Time (Berkman Klein Center)
- Sumana Harihareswara: What Would Open Source Look Like if It Were Healthy? (Github)
- How Markets Co-opted Free Software’s Most Powerful Weapon (Benjamin Mako Hill, LibrePlanet)
There are far more podcasts worth your time than you can possibly listen to, but there are some that anyone interested in tech criticism really should tune in to, including Trashfuture, Tech Will Not Save Us and This Machine Kills.
On tech and competition, I recommend the blog Naked Capitalism and Matt Stoller’s newsletter Big.
You might think that law review articles aren’t your cup of tea, and in the main, you’re probably right. However, I strongly implore you to try these three open-access, highly accessible, recent landmark papers. The first is Lina Khan’s “Amazon’s Antitrust Paradox,” published in 2017 in the Yale Law Journal when Khan was a third-year law student. Today she is chair of the FTC and is turning the ferociously argued material in that paper into national policy. Second is Dina Srinivasan’s 2019 Berkeley Law paper “The Antitrust Case Against Facebook: A Monopolist’s Journey Towards Pervasive Surveillance in Spite of Consumers’ Preference for Privacy,” which makes a hugely important connection between privacy invasions and antitrust harms. Finally, there’s Kate Klonick’s 2018 “The New Governors,” from the Harvard Law Review, which is essential to understanding the speech implications of monopoly platforms. Of course, there are a lot of books you could read, besides this one, if you want to learn more about the subjects covered herein.
On monopoly
This is a golden age of anti-monopoly books, but even amid all that plenty, three titles stand out. The first is Zephyr Teachout’s Break ’Em Up: Recovering Our Freedom From Big Ag, Big Tech, and Big Money. Teachout is a campaigning law prof who writes like a muckraking journalist in this accessible, infuriating work. Next is David Dayen’s Monopolized: Life in the Age of Corporate Power. Dayen is a prominent journalist with a keen appreciation of the law, and his book is full of beautifully explained case studies. Finally, there’s Tim Wu’s The Curse of Bigness: Antitrust in the New Gilded Age. Wu is another campaigning law prof—he was Teachout’s running mate in a bid for the New York governorship—who coined the term “net neutrality” and served as Biden’s White House tech antitrust czar from 2020–2022. Curse is a brilliantly argued, swift-moving critical history of the rise and fall of US antitrust enforcement.
For tech criticism
Start with my Electronic Frontier Foundation and Verso colleague Jillian C. York’s Silicon Values: The Future of Free Speech Under Surveillance Capitalism, the best work on content moderation and speech in a global context, hands down. For an older international perspective on tech and its impact on movements for self-determination, read Rebecca MacKinnon’s now-classic Consent of the Networked: The Worldwide Struggle for Internet Freedom. For a scathing, take-no-prisoners takedown of the ad-tech industry, read Tim Hwang’s Subprime Attention Crisis: Advertising and the Time Bomb at the Heart of the Internet. For an equally ruthless insider’s takedown of startup culture, read Wendy Liu’s Abolish Silicon Valley: How to Liberate Technology From Capitalism.
On innovation:
Andrew “Bunnie” Huang’s The Hardware Hacker: Adventures in Making and Breaking Hardware (2017) is half practical advice for would-be reverse engineers, half deep philosophy of how all new things are made by nonconsensually tearing down and rebuilding the stuff around you. Claire L. Evans’s brilliant Broad Band: The Untold Story of the Women Who Made the Internet is a novelistic history of the role of women in the rise of digital computers, and comprises dozens of case studies about how neglected minorities produce innovation by seizing the means of computation and reworking tools to make them fit for purpose. Aaron Perzanowski’s The Right to Repair: Reclaiming the Things We Own is a timely and urgent look at how tech monopolies use the rhetoric of innovation to punish actual innovators who divert their products from landfills, all in the name of increasing shareholder returns. Finally, there’s Half Letter Press’s long-overdue reissue of Prisoners’ Inventions, a 2003 classic that collected the beautiful schematic drawings and closely observed technical notes of an inmate in California named Angelo, who documented his fellow prisoners’ incredibly creative and inspiring works.
Finally, a novel:
Tamara Shopsin’s LaserWriter II, a fictionalized memoir of Shopsin’s time as a repair technician at TekServe, New York City’s legendary independent Mac repair shop. Shopsin weaves a beautiful tale that is a hymn to community-scale technological self-determination. She is also a daughter of Kenny Shopsin, co-founder of Shopsin’s, the greatest diner on Earth, where the menu has hundreds of options and parties of five may not be seated.