Chokepoint Capitalism

From Reboil

Chokepoint Capitalism is a 2022 political book authored by Rebecca Giblin and Cory Doctorow.

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People

Robert Bork
Chicago School lobbyist who succeeded in diminishing the Sherman Antitrust Act (1890) with the consumer welfare doctrine which argues mergers and acquisitions are acceptable if the resulting monopoly promises to lower prices below what it would charge if it had to compete.
Ronald Reagan
US President that rolled back anti-trust law.
Susan May
(c13) Author and activist against Amazonʼs audiobook-publishing platform ACX.
Jeff Bezos
Founder and CEO of Amazon.

Places

Things

Amazon
Audible
Chicago school of economics
Live Nation
Sherman Antitrust Act
A 1890 US law that prohibits monopolies.
Spotify
Ticketmaster

Narrative

Chapter 1

A high level description how economic “chokepoints” and “moats” can be created by market control via monopoly (a single seller controls the market by not allowing anu customer to buy from anyone else) and control via monopsony (a single buyer controls the market by not allowing producers to sell to anyone else). A summary of the rise of monopsony in the US during the 20th century under the Chicago School of Economics as the objective of US anti-trust laws was changed to lower prices instead of fairness for both buyers and sellers. Amazon under Jeff Bezos is given as the primary example of monopsony. Creators fighting monopsony through stricter copyright laws are bound to fail since buyers of their work can dictate copyright terms or deny creators access to the market. An announcement that a strategy to fight monopsony is described in later chapters of the book.

Chapter 2

A creation story of Amazon's monopsony that begins with its start as a book seller. Amazon successfully pressed various publishers to pay bribes for favorable positions in Amazon search results. Public protests by the publishers were met with immediate unlisting of publishers from Amazon.

01:05:15: Kindle developed to take advantage of Anti-circumvention rules from a pair of 1996 international copyright treaties (see WIPO copyright treaty). DRM is one legal result. The US implementation of DRM is the Digital Millennium Copyright Act (DMCA).

01:08: The DMCA made software locks themselves sacrosanct, not the crime of violating copyright, giving platforms such as Apple the ability to raise the switching cost of using a competitor's software platform to listen to music using a competitor, or “locking in” customers (see the previous chapter's moat analogy). Apple could do this because Apple refused to sell their DRM technology that would allow customers to play DRM'd music on other platforms. In the case of the music industry, record labels effectively gave Steve Jobs (CEO of Apple Computer), a monopoly and gatekeeper position over the digital music market by insisting that music be sold under DRM. This monopoly was broken by Amazon striking a deal with music labels in 2007 to sell DRM-free music, restoring some ability of music publishers to dictate the terms by which they sold music.

01:10:50: Amazon applied the DRM middleman monopoly playbook observed in the music industry to the book publishing industry upon tbe launch of the Amazon Kindle. Book publishers failed to learn from the record labels's mistake and insisted that books be sold under DRM; Amazon used DRM to prevent readers from using anything except Amazon's services which allowed Amazon to establish an eBook monopoly; Amazon prohibited book publishers from selling DRM-free eBooks.

01:11:42: Amazon pressures book publishers to digitize their catalogues of printed books under penalty of being demoted in search results. Amazon sells books at 9.99 USD almost a third of typical 30 USD hardcover prices, selling at a loss but allowing Amazon to build a monopoly by using DRM to lock customers into the Kindle eBook store platform; Amazon then leveraged the monopoly to effect a monopsony over publishers. Book publishers find themselves legally unable to migrate Amazon customers outside the Amazon platform without breaking DRM. All major US book publishers (except for Random House) strike a deal with Apple to use agency pricing (publishers can dictate a price while the platform takes a fixed fraction) in order to inflate book prices in customer expectations.

01:22:16: Amazon invokes US anti-trust law[1] to punish book publishers for colluding to raise prices by complaining to the FTC which caused the US Department of Justice to take action.[2]

01:23:08: The Chicago School of Economics anti-trust theory punishes collective action of independent creators who defend their rights by framing their actions as collusion since an exception to anti-trust is given to employees but not independent workers. Port of Los Angeles truckers are given as an example of anti-trust law being used to prevent independent workers from unionizing. The policy of the Writers Guild to not protect independent writers is given as an example of current US anti-trust law successfully making independent workers unable to collectively bargain with their own labor. The book publishers were obliged to settle for 166 million USD; Apple was required to settle for 450 million USD.

01:27:10: As of 2018, Amazon controls 89 percent of the eBook market. Apple has 6.3 percent.

01:30:20 Audiobooks. Audible (an Amazon company) and Apple dominate the market and keep books under DRM. In 2018, coalition of publishers licensed Google to create a DRM-free audiobook store. Random House is described as no longer insisting on DRM. Publishers choosing not to use DRM is evidence that DRM fails to protect publishers despite that being the primary purpose for DRM in the first place.

01:33:30. ”Get Big Fast”, an Amazon slogan by Jeff Bezos.

01:38: Amazon used domination of the ebook market to surveil customer preferences to create actionable market intelligence on customer preferenfes. Amazon then used that information to poach authors, market its own titles, cross-sell non-book products based on reading preferences. This is an example of surveillance and vertical integration. This is surveillance capitalism. Big tech abuses monopoly power to deprive individuals of choice to limit what individuals can buy; locking customers into their ecosystems from which escape is not possible without risking prison sentences. Public libraries have historically been able to collect intimate preferences and thoughts of individuals but traditionally have defended patron privacy; Amazon actively uses customer searches, purchase history, and browsing metadata to extract profit from customers.

01:40:54: Money extracted by Amazon's monopolies and monopsonies are used to stifle competition in its “kill zone”. An example is given of the company behind diapers.com which Amazon undercut, then bought, then shut fown for 200 million USD. Venture capitalists are less likely to invest in companies that are likely to be destroyed or bought out, reducing innovation. AWS provides Amazon intelligence on new startups.

01:43:15: Amazon allowed eBook publishers to opt out of DRM after it dominated the market and most customer eBook libraries are locked inside Amazon's platform. Profits of monopolies and monopsonies are supposed to attract competitors. However, DRM has proven to be a legal tool to protect temporary market advantages into “enduring law-backed defenses”. A list of examples of DRM being used by companies to stifle competition (General Motors and their cars, Volkswagens and their cars, Phillips and their light bulbs, Hewlett-Packard and their printers, Johnson and Johnson and artificial pancreases, John Deere and tractors, voting machine manufacturers.

01:45:50: DRM is made available globally. Canada uses Bill C32 and the EU uses Article 6 of the EU Copyright Directive. By wrapping DRM around arrangements of how their products may be used, DRM allows monopsonies to effectively create their own private laws that are enforced by public courts and the police. This is anti-circumvention law.

Chapter 3

01:46:40: A short history of Craigslist.

Advertising.

C4

Music and copyright as a mechanism of monopolistic control.

C5

Music streaming and copyright as a mechanism of monopolistic control.

C6

Radio?

C7

C8

C9

Acting and writing agents.

C10

App store apps.

Adam Smith in The Wealth of Nations defined a free market as a market without rentiers.[3]

C11

Video streaming and YouTube.

C12

C13

C14

C15

08:40. How mandating a renewal of copyright every 25 years would help break monopolies.

C16: Radical Interoperability

C17: Minimum wages for creative work

09:38:30: Alan Dean Foster fights to get paid by Disney who claimed they bought the copyright to Fosters's work without the liability of paying him for the work when Disney purchased Lucasfilm and 20th Century Fox.

C18: Collective Ownership

History


See also


Cite this

Rebecca Giblin; Cory Doctorow. (2022). “Chokepoint Capitalism: How Big Tech and Big Content Captured Creative Labor Markets and How We'll Win Them Back. Beacon Press. OCLC: 1304834210.

External links

References

  1. ↑ See Sherman Antitrust Act (1890)
  2. ↑ See United States v. Apple Inc. (2012), decided 2013-07-10
  3. ↑ Baltakatei: ChatGPT defines rentiers as those “who seek to earn income through the ownership or control of resources, particularly when they leverage these resources to gain more without producing new goods or services. (i.e., rent-seeking behavior)”
  4. ↑ Rebecca Giblin; Cory Doctorow. (2022). “Chokepoint Capitalism: How Big Tech and Big Content Captured Creative Labor Markets and How We'll Win Them Back. Beacon Press. OCLC: 1304834210.

Footnotes


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