Masters in Business
Masters in Business

BONUS: How the Internet Got Worse with Cory Doctorow

On this special, bonus edition of Masters in Business, Barry speaks with Cory Doctorow, a science fiction author, activist, journalist and blogger. They discuss the power of large companies over the Internet, and Corey's advocacy for data privacy. Barry and Cory discuss platform decay on the In

Featured Speakers

Bloomberg HostCorey Doctorow Guest

Topics Discussed

Episode Summary

Executive Summary: Corey Doctorow argues that today’s major tech platforms are not merely big but structurally designed to decay into worse services once users are locked in and competition is weakened. He traces how legal, technical, and policy changes enabled this “enshittification,” and explains why interoperability, reverse engineering, and stronger labor and privacy rules are key to reversing platform abuse.

Main Topics: Doctorow’s background in digital rights activism (Priority: 4/5): He explains his work as a writer, science fiction author, blogger, and longtime EFF activist focused on ensuring human rights apply online and offline. Encryption, Bernstein, and code as speech (Priority: 5/5): Doctorow recounts the Bernstein case, where EFF argued source code is protected expression, helping establish strong encryption as lawful and essential to digital security. How platforms decay into 'enshittification' (Priority: 5/5): He defines enshittification as a three-stage process: platforms initially serve users, then degrade the user experience while favoring business customers, and finally extract value from everyone once lock-in is complete. Legal and policy barriers to user modification (Priority: 5/5): He argues that anti-circumvention laws like DMCA Section 1201 criminalize lawful modifications, blocking ad blockers, reverse engineering, interoperability, and privacy-preserving tools. Europe, interoperability, and the move away from platform dependence (Priority: 4/5): Doctorow says the EU is shifting from regulating platform behavior to questioning platform power itself, pushing interoperability and migration rights that could weaken U.S. tech dominance. Case studies: Amazon, Uber, Facebook, Apple, and printers (Priority: 5/5): He uses examples from Amazon’s ads and fees, Uber’s wage algorithms, Facebook’s anti-fraud retreat, Apple’s app-store control, and printer ink lock-in to show how rent extraction works in practice. Generative AI, copyright, and labor rights (Priority: 4/5): He argues copyright is not the right tool for AI harms; instead, creative workers need collective bargaining power and sectoral rights to negotiate with concentrated media and tech employers.

Key Arguments: Platforms become abusive not because greed is new, but because competition, interoperability, and user modification rights were weakened, removing the discipline that once constrained firms. Anti-circumvention rules turn ordinary user repairs, privacy protections, and compatibility tools into crimes, even when the purpose is lawful. Interoperability and reverse engineering are essential to reduce switching costs and let users leave bad platforms without losing their data or communities. European regulators are increasingly targeting platform power itself, not just harmful content moderation choices, which could reshape global tech policy. Amazon’s search and advertising system has become a rent-extraction machine, with paid placement displacing relevance and quality. Uber uses algorithmic wage discrimination and worker lock-in to push drivers toward lower pay and worse conditions. AI policy framed around copyright is insufficient; workers need sectoral bargaining and collective power to prevent being displaced by concentrated firms. The U.S. has allowed only one modern privacy statute since 1988, leaving services like TikTok free to exploit a legal vacuum rather than solving the underlying privacy problem.

Data Points: DES key length: 50 bits - Doctorow describes the NSA-approved 'DES50' encryption as weak enough for brute force. Deep Crack brute-force time: 2.5 hours - EFF founder John Gilmore’s Deep Crack machine could break DES50 in this time. Deep Crack cost: $250,000 - The machine built to brute-force DES50 cost roughly a quarter-million dollars. Ad blocker adoption: More than half of internet users - Used to argue ad blocking is the largest consumer boycott in history. Amazon search ad market size: $32 billion -> $50+ billion - Growth in Amazon’s pay-for-placement/search advertising business since the book was written. Amazon first search result premium: 29% more expensive - The first item in Amazon search results is, on average, more expensive than the best organic match. Amazon top bar result premium: 25% - Items in the top bar or premium placements are materially costlier than the best match. Amazon junk fees to merchants: 45% to 51% at publication; 50% to 60% now - Doctorow says merchants increasingly pay fees for fulfillment, Prime, and advertising. P&G ad spend reduction: $200 million - Procter & Gamble cut this amount from Facebook advertising with no observed sales decline. Uber initial capital injection: $31 billion - Doctorow says Uber was heavily financed by Masayoshi Son and Saudi capital. Uber losses: 41 cents lost per dollar for 13 years - He cites sustained economic losses while Uber pursued market capture. Section 1201 penalty: $500,000 and 5 years in prison - Doctorow cites the first-offense penalty for circumvention under the DMCA. Audible market share: 90% - Used to illustrate how DRM locks customers into Amazon’s ecosystem. HP update timing: March update triggered in September - He describes a security update that later disabled generic printer ink after customers stocked up.

Pivotal Quotes: "Inshittification is both an observation about how things go bad and also a theory about why they're going bad." — Corey Doctorow: His definition of the term that titles the book and frames the whole interview. "Companies don't just become too big to fail. They become too big to care." — Corey Doctorow: On how monopoly insulation removes consequences and degrades service quality. "The problem isn't that you have the power, the problem is how you wield the power." — Corey Doctorow: His description of the older European regulatory approach toward platforms like Facebook.

Implications: If interoperability, privacy, and anti-circumvention rules stay weak, platforms will keep extracting more value while degrading service. Stronger user rights, labor organization, and EU-style migration tools could restore competition and curb platform power.

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About Masters in Business

Barry Ritholtz speaks with the people that shape markets, investing and business.

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