In light of the events that occured in the United States of American on the 6th of June, and with the memory of that day still fresh in the worlds mind, a subject that has long been relegated has started to garner a bit more of attention from the public, that subject being the platform based economy that dictates our society. Platform based economy is a consequence of Knowledge economy. Bruno Amable and Philippe Askenazy, two french economists state in their contribution to the UNESCO report, “Construire des sociétés du savoir”, that “Knowledge economy is defined as a stage of capitalism in which a specific productive model based on the complementarity of human capital, Technology of communication and information (TCI), and a reactive organization of companies is generalised”
The world we live in is indeed vastly different from the world our parents and grandparents lived in. It is also vastly different from the world future generations will live in. The main reason behind that is the huge technological advancements we have been able to achieve. The first plane was invented in 1903, and today, we have planes that can break the sound barrier. The first computer was created in 1937, less than a hundred years ago, and today they have become so performant and efficient, that they can even predict human behaviour, trick us, all without our notice. However, what would happen if these technologies turned against us?
Sophocles, a Greek tragedian, once said:” Nothing vast enters the life of mortals without a curse”. Never has that statement made more sense than today. With the rise of computers, and the exponential increase in processing power, what is possible has long since exceeded what anyone thought was possible. We have now built models, and programs so complex that we classified them as intelligence, Artificial Intelligence. These programs have been built to exploit human vulnerabilities, so as to shift, ever so slightly, our behaviours just like what a hacker does with computers and the likes. These programs take the form of platforms, social media, or applications that most of us use daily.
Through the years, these platforms have honed their technique to an art. Thanks to that, they have become some of the most profitable and influential businesses in the history of mankind. Never before has the world balance been in the hands of approximately 1000 people. The world leaders of today, those with the most influence, are not countries anymore but these companies, sometimes called GAFAM, Big tech etc… Which begs the question, how did they do it? How does their system work, and is there a way to counter and regulate them?
How does it work?
First and foremost, it is important to establish and understand what we are facing. These types of companies are what we call natural monopoles. What differentiates them from a normal monopoly is that they don’t follow the predetermined patterns of a monopoly. Usually with standard monopolies, the marginal cost (the cost of reproducing a good or service) increases each time, making it so that the producer has to restrain his offer to a certain extent for him to gain the maximum efficiency. However, these natural monopoles are born from the digitalisation and dematerialisation of an economy based on the Internet.
One of the specificities of the Internet is the ease at which information is created, travels, and is reproduced. Hence companies that centre their offer around such technologies have relatively low or even non-existent marginal costs. However, the fixed costs are very high and represent the initial investment. Such fixed costs include the experts you must pay to create your platform and the computers to keep the company running. As these experts are highly qualified, they are highly remunerated. Their costs are nonetheless vastly out shadowed by the amount of potential profit they bring with their knowledge. All this makes it so that it’s more advantageous for the natural monopoles to spread their products as much as possible, which is the opposite of other monopoles that try to restrain their products, as rarity should equal to value. Moreover, these new types of companies use, and depend on, what is called the network effect. Through that, and other means, they are able to “lock us in” their products.
The network effect is when the value of the product is directly tied to its amount of users, meaning said product becomes all the more attractive the more people use it. As you can imagine, these kinds of products are very dependent on the initial network they used to grow. However, there will be a point when the amount of users will be enough for the product to self sustain and grow, that point is when it reaches what is called critical mass. Once a product reaches critical mass, it doesn’t need any advertising to reach an increasing number of people. At that point the users won’t want to switch to another similar product because the majority of people are already using said product, and very few are using other products of substitution.
That is what we call the lock-in effect. It can take many forms and has always existed; however, it has become more prominent these days. This also means that the first company to reach critical mass wins the market, the winner takes all. An example to illustrate the point would be comparing General Motors and Facebook. General Motors has to invest a non negligible amount for each car. They have to procure the resources, pay all of their many employees, all their infrastructure, their advertisements, and more. All that is needed to produce another car, and they also have to worry about competition. However, Facebook on the other hand doesn’t have to pay that many employees, relatively speaking, they don’t need additional resources or advertisements, in fact General Motors and other companies pay them to post advertisements on their website. They don’t even have to worry about competition, because at this point nothing can replace them, and even if a potential threat shows signs of such development, they have enough capital to buy it (ex; Instagram, WhatsApp).
What do they do differently?
It is normal to wonder: how are they so successful? Were they just lucky, there with the right product at the right time? Or did they do things differently? How did they make that much money? And, why should I care?
The product, the customer and the market
We have heard the sentence “If you don’t pay for the product, then you are the product” being thrown around a lot. However, very few actually understand its meaning. A lot of us think that companies just collect our data while we browse through the net. Some think it’s not a big deal, it may bother others, but we tend to easily gloss over it. Furthermore, many are under the wrong impression that just collecting our data holds little value, and nobody would benefit from knowing my favourite song. The truth is these companies have devised an incredible way to make a seemingly non lucrative service be one of the most profitable in the world. They did that by making it seem like we are the users, that we are the customers benefiting from it, however, we are nothing more than the products on display. These companies sell physical entities to legal entities. The choice of word here might seem strange, but it is to point out the fact that even the people behind these companies, are themselves being sold, as we are all users of these products and services.
Just like oil, coffee and other futures that are found in trading centers, there exists a virtual trading center for human futures. What is being sold is not ourselves per say, but rather certainty based on our behavioural information. For example, certainty that Miss X will like these products, or that Mr Y is suspicious of what the media is showing, so he is very likely to believe what you are trying to spread. They are able to sell “certainty”, because they have built models from the data they have collected, models that can, thanks to A.I. and machine learning, more and more accurately predict our behaviour and even sometimes change it slightly. Jaron Lanier, a computer philosophy writer says, “it’s the slight change in our behaviour over time that is being sold”. The best models would attract more clients, which are people that want to change, or predict our behaviour. For example advertisers, some world leaders, and the likes. Hence, we are watched and tracked to feed AIs with our data. Some of these might even know us better than we know of ourselves.
The three pillars of success
These companies have 3 main goals to keep their system running. The first goal is to keep us engaged so as to keep us on the platform as much as possible, it is called the engagement goal. The second goal is the growth goal. Its role is to keep us coming back, and to increase/intensify our desires. Lastly, their third goal, the advertising goal, aims to get as much money as possible by selling ads while we scroll through the platform. Meaning it aims to capture the customer with an advertisement at the moment they are ready to make the purchase.
It’s by deciphering these three points, and how they went about applying them, that we can see how much thought and care has been put into every little detail, nothing was left to chance.
To achieve these goals, the creators of these services go through some psychology classes to study subconscious behaviourism. It should be noted that 95% of our brain activity is unconscious, meaning we are not aware of 95% of the things that we do, think, feel.
They have studied and learnt how to take advantage of our weaknesses to affect our subconscious hence our behaviour, just like hacking takes advantage of a weakness in the system.
They make their products extremely addictive on purpose, as mentioned prior, nothing is left to chance. From the sound of the notification, to the design of the platform. Some are more effective than others depending on the cases and individuals, for example some people are addicted to the Netflix sound, some to the twitter notification.
Some designs take direct inspiration from casinos, like the never ending scroll, or the refresh feature when you scroll up, it is very reminiscent of a slot machine. All these are found through countless experiments that aim to see what generates the most dopamine. None are exempt from these, even the creators of these “tools”, who know more than anyone of their effects, still fall prey to them. Tristan Harris, the leader of Center for Human resources said:” Something is a tool if it is just sitting there waiting for you to use it. A tool ceases to be a tool if it demands something from you, has its own agenda, and it manipulates, seduces you, to reach that goal”.
A Platform based economy’s effects on society
In essence, there is nothing inherently wrong with what these companies are doing, and that is what they will argue. However, the effects and influence these companies have on the world and our society through their products is immense. Some of the main effects are the rise of isolation, depression, the spread of fake news and polarization. All these are linked in a way shape or form to this topic.
Connexion leading to isolation
In this seemingly interconnected world, many studies show that the sense of isolation and depression are on the rise these past few years. The case is especially bad in young children that are more vulnerable. The case of young teens admitted for self harm, and the rate of suicide has increased exponentially with the rise of New Information and Communication technologies (NCIT) and especially social media. These cases are more prominent in young teens and especially young girls, because this generation is the first to grow up with these new technologies surrounding them and at that age, children build their sense of self and identity. However, these teens build all of that around social media, and are exposed to unending feedback and sometimes criticism coming from all around the world. Moreover, as the internet guarantees the non-disclosure of your identity, and there is no way to distinguish between adults and children, people tend to be extremely harsh. These children face something that even adults struggle with, hence it causes confusion, self-doubt, a growing thirst for approval, which then makes them more susceptible to fall into depression and suicidal tendencies. As they think everyone is on social media and believe that it’s one of the main places to seek connexion, they suffer from FOMO (Fear Of Missing Out). It causes them to stay engaged on social media (Lock-In effect), however, they feel all the lonelier and more isolated in doing so. The lack of regulation around these issues is also a cause for concern as mental health issues are the main cause for suicide.
Weaponizing social media
Another main effect is the spread of fake news, and an increase in polarization. As shown in a study featured on MIT news, fake news spreads 6 times faster than real news. One of the reasons is that real news is controlled and follows specific fact checks and procedures, however, fake news spreads freely and is unconstrained by reality and finds the people and groups most susceptible to believe it. It should be noted that each feed is unique. No one person sees the same thing, no matter how close they may be. It is as if each individual is given a different lense to view the world through. This phenomenon is visible with the Google search bar autofill. Depending on the region and past searches, the proposition from Google may vary a lot. The main reason for the rapid spread of fake news and conspiracy theories, however, is the algorithm used. Through it, people are being separated in groups, or to be more precise, people with similar profiles are being gathered in groups. For example, people prone to believing conspiracy theories will be noted by the algorithm and targeted with that kind of content.
Hence in recent times we have seen a spike in conspiracy theories such as those surrounding covid-19, the flat earth theory, or the elections in the USA being rigged which led to the events of January 6th. The algorithm isolates these kinds of people in a sort of virtual bubble and continues to feed them the same type of information. The more they see, the more they believe and think of it as common knowledge, to the point that they can’t see anything else. The information is shared, and it ends up spreading like a virus. Each group is infected with their virus type information, be it true or false, and can’t understand the other side because it seems that the information they have is the only one that travels, they don’t know that the other side doesn’t see the same information as them. Because of that, none of the sides are listening to the other, and a compromise is impossible to reach. Such scenes happen in many areas of our modern society spanning across countries, domains, genders, races, beliefs, and politics. No subject is spared, and no progress is made in understanding each other .
That is how polarization is created, people get riled up and annoyed, so they seek like minded individuals, or articles online to feel reassured, and the algorithm obliges. Polarization is efficient in keeping people engaged. It tries to find a rabbit hole that is closest to your interests so as to lead you into it. It does not only convince “gullible” people unlike what most think, some prominent and well studied individuals have fallen into rabbit holes as well. The algorithm works so well at polarising people because there is a trust crisis in the world. Ironically, the rise of the NCIT is what created this trust crisis, by giving access to seemingly limitless information, people have stopped believing and trusting what the government tells them or what the media broadcast, and try to find the “truth” hidden behind. As shown through the insurrectionist in the USA that firmly believed they were saving their country and ignored the calls of the government (President Trump excluded) and the media to step back. The algorithm feeds on this kind of environment to increase engagement time. In this case specifically, the leader of the country at the time, used the algorithm to his advantage. Such a phenomenon is called the weaponization of social media and is not to be overlooked.
It is important to note that these platforms have done incredible things. They’ve found organ donors, where the normal route failed, they’ve allowed the reunion of long lost friends or families, they’ve given some people sustenance, and granted the means for some to pursue the job of their dreams. They are also extremely useful, as they have eased the research workload, allowed for smooth communication across the world, and have virtually connected the entire world, in both senses of the term.
However, we must beware of the trap laid underneath all that and the danger it poses. It makes us extremely dependent. It also divides us and brings out the worst in society. It undermines our system and makes us lose sight of the truth, and when nothing is true, everything is permitted. Hence, it is our duty to be mindful and enforce ethics into what we create, and how we use them.
Some people have started to take notice, and take actions on large scale, and small scale. For example, there is a trend to downgrade your phone to a flip phone. It makes you use it less, stay focused, and not rely too heavily on convenience. Others are trying to change the way companies apply technologies by proposing an ethical alternative, like Tristan Harris the leader of Center for Humane Technologies.
The European Union as a whole is also taking action. measures such as the Digital Market Act, and Digital Services Act are being discussed. The aim of these two Acts would boil down to control and regulate the influence of these companies, and make them more responsible/accountable for their actions. Even though the acts are still being discussed, and some believe it is too dramatic of an approach, It is a step in the right direction for many.
By Oluwafisayomi Agunbiade, promotion 2020-2021 du M2 IESCI
Amable, B. et Askenazy, P. (2003), “Introduction à l’économie de la connaissance”, Rapport de l’UNESCO, construire des sociétés du savoir.
Center of Humane Technology https://medium.com/@HumaneTech_
Commission Européenne “Législation sur les marchés numériques: garantir des marchés numériques équitables et ouverts”
Healthline “The FOMO Is Real: How Social Media Increases Depression and Loneliness” https://www.healthline.com/health-news/social-media-use-increases-depression-and-loneliness
Help guide “social media and mental health” https://www.helpguide.org/articles/mental-health/social-media-and-mental-health.htm
MIT News “Study: On Twitter, false news travels faster than true stories” https://news.mit.edu/2018/study-twitter-false-news-travels-faster-true-stories-0308
New-York Times “On YouTube’s Digital Playground, an Open Gate for Pedophiles” https://www.nytimes.com/2019/06/03/world/americas/youtube-pedophiles.html?searchResultPosition=1
Pans “Emotion shapes the diffusion of moralized content in social networks” https://www.pnas.org/content/114/28/7313
Netflix “The Social Dilemma” 2020
Time “The Few, The Proud: The Millennials Who Still Use Flip Phones” https://time.com/3318573/flip-phones-millennials-iphone6/