In Which Cory Doctorow Channels James Madison

"The first part, which is largely diagnostic, sets out a cycle by which platforms decay. (The key word here is "platforms." Doctorow focuses on services and sites that sell things produced by others, taking a large chunk of revenue for themselves.) In Doctorow's telling, at the first stage, platforms provide excellent value to their users. This is typically achieved through burning cash (Amazon) and/or skirting rules (Uber). By providing valuable goods and services below cost, the platforms build customer loyalty."

"At a certain point, though, customer growth isn't enough to sustain the business. At that point, they start exploiting customers to benefit their business partners. In the case of Meta/Facebook, for example, they start harvesting all manner of customer data and selling it to advertisers. In some cases, too, this is where price increases start showing up. For example, YouTube TV, which is part of the Google Cinematic Universe, has more than doubled its monthly price since it began."

Many platforms begin by offering exceptional value to users, often subsidizing services through cash burn or bypassing regulations. When user growth ceases to sustain expansion, platforms shift toward extracting value from users to benefit business partners, including harvesting user data for advertisers and raising prices. Users largely remain because leaving imposes high costs in lost network connections and scarce realistic alternatives. This cycle transforms platforms from consumer-focused services into intermediaries prioritizing partner revenue shares, concentrating profits at the expense of user experience and market health, creating systemic decay across digital marketplaces.

Read at Inside Higher Ed | Higher Education News, Events and Jobs