At the Guardian, Evgeny Morozov critiques "platform capitalism," an emerging form of internet business practiced by tech giants like Uber, Facebook, and Amazon. Morozov defines platform capitalism thus:
Instead of the tired conventional model, with individual firms competing for customers, we are witnessing the emergence of a new, seemingly flatter and more participatory model, whereby customers engage directly with each other. With a smartphone in their pocket, individuals can suddenly do things that previously required an array of institutions.
Such is the transformation we are witnessing across many sectors of the economy: taxi companies used to transport passengers, but Uber just connects drivers with passengers. Hotels used to offer hospitality services; Airbnb just connects hosts with guests. And this list goes on: even Amazon connects booksellers with buyers of used books.
While tech firms tout platform capitalism as a way to open up their innovations to unrestrained use by users, Morozov writes that it's really just another way for these firms to capture valuable data:
Few industries could remain unaffected by the platform fever. The unspoken truth, though, is that most of the current big-name platforms are monopolies, riding on the network effects of operating a service that becomes more valuable as more people join it. This is why they can muster so much power; Amazon is in constant power struggles with publishers – but there is no second Amazon they can turn to.
Venture capitalists such as Peter Thiel want us to believe that this monopoly status is a feature, not a bug: if these companies weren’t monopolies, they would never have so much cash to spend on innovation.
This, however, still doesn’t address the question of just how much power we should surrender to these companies. A publishing industry ruled by Amazon and Facebook might produce lots of innovations – but is there any guarantee that it would actually produce any significant articles or books?
One sure way to keep the platforms in check is to prevent them from appropriating all the adjacent peripherals. Making sure that we can move our reputation – as well as our browsing history and a map of our social connections – between platforms would be a good start. It’s also important to treat other, more technical parts of the emerging platform landscape – from services that can verify our identity to new payment systems to geolocational sensors – as actual infrastructure (and thus ensuring that everybody can access it on the same, nondiscriminatory terms) is also badly needed.
Most platforms are parasitic: feeding off existing social and economic relations. They don’t produce anything on their own – they only rearrange bits and pieces developed by someone else. Given the enormous – and mostly untaxed – profits made by such corporations, the world of “platform capitalism”, for all its heady rhetoric, is not so different from its predecessor. The only thing that’s changed is who pockets the money.
Image: An Amazon distribution warehouse. Graeme Robertson for the Observer.