Internet Oligopoly
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Internet Oligopoly

The Corporate Takeover of Our Digital World

Nikos Smyrnaios, Athina Karatzogianni

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eBook - ePub

Internet Oligopoly

The Corporate Takeover of Our Digital World

Nikos Smyrnaios, Athina Karatzogianni

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About This Book

Over the last decade, the digital technologies in everyday life have multiplied. Our lives have been gradually taken over by digital devices, networks, and services. Although useful, they have also become invasive additions to our personal, professional and public lives. This process has occurred in a globalized and deregulated economy and a few US-based start-ups transformed into an oligopoly of multinationals that today govern the informational infrastructure of our societies.
This book offers an analytical framework of the contemporary internet studied through the lens of history and political economy. Google, Apple, Facebook, Amazon and Microsoft are examined as emblematic products of a new capitalist order that is resolutely opposed to the original project of the internet.
The author retraces the process of commodification that resulted in financial rationales taking over from collective and individual emancipation and uncovers how this internet oligopoly uses its exorbitant market power to eliminate competition; take advantage of global financialization to exploit human labour on a global scale and to avoid taxation; and how it implements strategies to control our communication methods for accessing information and content online, thus increasingly controlling the digital public sphere. The book reveals how the reshaping of society via private company business models impact on the place of work in future societies, social and economic inequalities, and, ultimately, democracy.

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CHAPTER 1

THE COMMODIFICATION OF THE INTERNET

Since the 1990s, certain utopian discourses have tended to confuse the historical and technological features of the internet and the socio-political aspects that result – what Dominique Cardon calls ‘the spirit of the Internet’1 – with actual uses. In other words, qualities are often projected onto the contemporary internet that it no longer has for many of its users. While this type of utopian reasoning does draw on true events from the past, it forgets that the internet is not a socio-technical construction fixed in time but is a historical object. Therefore, it changes depending on the context and the actions of the actors involved. Over the period from the 1960s until the beginning of the 1990s, networked computing emerged as a public good but then began to deviate from this initial notion towards a market-centred one. A link was then gradually established between economic neoliberalism and a certain form of technological determinism, expressed by the new notion of ‘the information society’. At the same time, the first commercial applications of networked computing tested the uses and business models that would constitute the foundation of the commodified internet.

THE LEGACY OF ARPA

The official histories of the internet agree that its direct ancestor was the computer network set up in the late 1960s by US scientists working for Advanced Research Projects Agency (ARPA), an agency of the US Department of Defence responsible for research and development of new military technology.2 ARPANET was the concrete result of a series of theoretical studies on networked computing dating back at least to the concept of the Intergalactic Computer Network developed by JCR Licklider at the Massachusetts Institute of Technology (MIT) in 1963,3 as well as perhaps the Memex by Vannevar Bush4 and the cybernetics of Norbert Wiener.5 ARPANET combined several innovations such as Douglas Engelbart’s work on augmenting human intellectual capacity through computers, which was henceforth considered a communication tool for collaborative intellectual work.6 ARPANET also drew on the work of Leonard Kleinrock (MIT) and Paul Baran (Rand Corporation) on packet switching7 and John McCarthy on timesharing, that is, sharing computers among many users through simultaneous multitasking.

A Progressive Project

In the late 1960s, during that period of great political and cultural effervescence, the ambitious ARPANET project was based on the most ‘progressive’ technologies and management innovations (decentralised architecture, timesharing, packet switching, network computers and work in self-managing teams), as opposed to the ‘conservative’ methods prevailing at the time (centralised architecture, batch processing, switching circuits, local computers and rigid bureaucratic hierarchy). ARPANET's success in the early 1970s thus consecrated the open and collaborative socio-technical model, with its technical choices and collegial way of working, of the team headed by Robert Kahn and Vinton Cerf.8 This style of working continued after ARPA withdrew from the project in the mid-1980s and the National Science Foundation9 (NSF) took over. During this period, the internet was both invented and developed by a ‘republic of computer scientists’, that is, a community of equals whose core values were cooperation and the pursuit of scientific progress.10 The ensemble of technical and organisational innovations that would later serve as the internet’s foundation – from the establishment of regulatory bodies such as the Internet Engineering Task Force (IETF)11 up to the development of the World Wide Web following research by Tim Berners-Lee and Robert Cailliau – would be marked by this same spirit of openness, cooperation and progress.

Convergence of Design and Use

Another important feature differentiating the computer networks of the 1970s and early 1980s from other technologies of the time is that there was no gap between design and use. In other words, ARPANET’s designers were also its first users, giving them the power to change the orientation of technical inventions and their implementation according to their own interests and needs. The development of electronic mail by Ray Tomlinson in 1971 is one example; as Tomlinson explains, engineers working on ARPANET at the time were trying to find interesting uses for it, and the ability to send mail via the network seemed to solve their own communication needs.12 This foundational idea of the internet, that the design or modification of a technology must be accessible to its users, inspired the first hackers who banded together in the computer clubs of the 1970s, such as Steve Jobs and Steve Wozniak, inventors of Apple, as well as Richard Stallman, creator of the free software movement. As Eric Raymond explains in his seminal work ‘How to Become a Hacker’,13 the hacker culture and the DIY spirit that prevails among many IT people owe much to the pioneers of networked computing working on ARPANET.

ARPANET – A Public Good

At the same time, the socio-economic context that ARPANET was born in also influenced the values associated with it. Indeed, the entire project was financed by US taxpayers. Private companies such as IBM and AT&T refused to invest in it despite the government’s proposals because they thought it would be impossible to make it profitable.14 The main creators of the project were thus employed by universities and public research centres. ARPANET was, therefore, a pure product of the tradition of state technocracy, which emerged in the United States during the Second World War and developed within its military–industrial and scientific complex. Although private companies were involved as subcontractors from ARPANET’s very conception, the funding and the initiative remained under the control of public officials. Consequently, the first computer networks were considered by those who built them to be public property, that is, assets financed by public funds in order to serve the public interest. This is precisely what explains the refusal of internet pioneers, at least until 1994 and the birth of the first commercial web browser Netscape, to file patents on their inventions or to try to ‘monetize’ them by other means. This tradition of non-commercial technologies being developed collectively without being patented property and available to all continues today through the free software movement, which itself inspired the Creative Commons licenses and the theory of the Information Commons.15

Free Circulation of Information

Another core value of networked computing also resulted from the encounter of the early network designers and Californian counterculture of the 1970s: the free flow of information. Indeed, from the outset, ARPANET was conceived in order to facilitate the dissemination of information, and the networks inspired by it perpetuated this tradition. Their decentralised and non-hierarchical architecture made it difficult for a regulatory body to control the flow of information – a characteristic that quickly came into conflict with copyright and the legal frameworks for freedom of expression. This combination of technical choices and the internet’s cultural traits was translated politically into what Benjamin Loveluck calls ‘informational liberalism’, which continues to inspire a wide range of actors and communities, from peer-to-peer groups and anonymous to the proponents of digital currencies like Bitcoin.16
Through this brief description, it is easy to see how the birth of ARPANET and the internet and the influence of its initiators and users radically changed the perception of computing: while it was the very epitome of a technocratic apparatus designed for war, it came to represent a tool for individual freedom and a more harmonious society. As Loveluck writes, ‘This is how computers, originally denounced as one of the most advanced embodiments of individual alienation through technology, an impersonal machine serving the interests of the bureaucracy or the State, in a singular reversal became one of the main tools serving individual emancipation’.17 Nevertheless, while networked computing benefited from the favourable context of post-war prosperity when the public resources needed for its development were abundant, the ARPANET and then the internet only appeared at the very end of this period. From the beginning of the 1970s, the economic crisis triggered by the oil shock encouraged more thinking about the contours of the so-called post-industrial economy. As will be shown below, the ‘thesis of the information society’ was central to these reflections, which would prepare the connected computer’s entry into the commercial world.18

THE INFORMATION SOCIETY AND THE POST-INDUSTRIAL ECONOMY

In the US, the first attempts to elaborate the theory that American society was undergoing a structural transformation towards an ‘information society’ were written by Fritz Machlup in his 1962 work, The Production and Distribution of Knowledge in the United States, and by Marc Porat in his 1977 report commissioned by the US Department of Commerce, ‘The Information Economy: Definition and Measurement’. In the latter, the author shows the considerable amount of information production and processing work as opposed to ‘material’ production. In 1973, Daniel Bell published his major book, The Coming of Post-Industrial Society: A Venture in Social Forecasting, which was considered the first explicit attempt to describe the transition to a post-industrial society. He forecasted the evolution of American society by extrapolating from trends that were already underway and thus observable. For Bell, the nature of employment is the dominant feature in every historically determined configuration of society and economy. The decisive factor in the transition from an industrial society to a post-industrial one was the spectacular increase in productivity through information-related work; hence the idea that post-industrial (or post-Fordist) society is an ‘information society’.

The Convergence of Neoliberalism and Technological Determinism

The theory of a post-industrial society came just in time to provide an explanatory framework and rational justification for the economic and technological changes shaking up advanced societies towards the late 1970s.19 Substantial progress in computer technology and microelectronics, and their introduction into offices, factories, and households during the economic crisis, stirred up debates on the general evolution of the economy and society. It was in this fertile ground that Bell’s theory struck a chord with both the scientific community and economic and political decision-makers because, by setting a course and by identifying the means to follow it, Bell’s theory was supposed to help us manage the growing complexity of the world. At the end of the 1970s, Bell reshaped his theory of post-industrial society by incorporating the notion of ‘information revolution’. He was thus the first to make the connection between post-industrial society and the more visible aspect of the technological revolution underway: computerization.20
Bell’s idea was even more relevant as it perfectly complemented the work of economist Robert Solow, who in the late 1950s had developed a theoretical model of economic growth in which technological innovation played a predominant role.21 This model, inspired by neo-classical economics, posits that technical progress increases the productivity of capital and of labour. In other words, over the long term, growth comes from innovation. In combining Solow’s and Bell’s theories, what follows logically is this: if economic development depends on technological innovation, and if, in post-industrial societies, most innovation comes from the ‘information revolution’, then we must ‘informatise’ (or computerise) the economy. Solow and Bell’s theories thus brought together two currents that became dominant in the United States in the 1970s: that of neoliberal economists, notably from the Chicago School, and that of intellectuals and engineers believing in the revolutionary potential of IT.

Technology to Overcome the Critiques of Capitalism

This convergence between economic neoliberalism and technological determinism was introduced to the general public through a series of highly popular futurology books. Among them was one very influential book, The Third Wave, written by American essayist Alvin Toffler following on his work, Future Shock.22 Toffler said his aim was to create a ‘desire for the future’ by describing it in the most positive way. But above all, he advances a theory underlying previous studies on the advent of the information society, which permeated all those that followed: the concepts and social theories inherited from the Industrial Age – especially those criticising capitalism – were no longer valid. He argues that a completely new analytical framework was needed in order to understa...

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