It’s not just you. The internet is getting worse, fast. The services we rely on, that we once loved? They’re all turning into piles of shit, all at once. Ask any Facebook user who has to scroll past 10 screens of engagement-bait, AI slop and surveillance ads just to get to one post by the people they are on the service to communicate with. This is infuriating. Frustrating. And, depending on how important those services are to you, terrifying.
This moment we’re living through, this Great Enshittening, is a material phenomenon, much like a disease, with symptoms, a mechanism and an epidemiology. When doctors observe patients who are sick with a novel pathogen, their first order of business is creating a natural history of the disease. This natural history is an ordered catalogue of the disease’s progress: what symptoms do patients exhibit, and in which order?
Here’s the natural history of enshittification:
1. First, platforms are good to their users.
2. Then they abuse their users to make things better for their business customers.
3. Next, they abuse those customers to claw back all the value for themselves – and become a giant pile of shit.
This pattern is everywhere. Once you learn about it, you’ll start seeing it, too. Take Amazon, a company that started out by making it possible to have any book shipped to your door and then became the only game in town for everything else, even as it dodged taxes and filled up with self-immolating crapgadgets and other junk.
In Jeff Bezos’s original business plan for Amazon, the company was called Relentless. Critics say that this is a reference to Bezos’s cutthroat competitive instincts, but Bezos always insisted that it was a reference to his company’s relentless commitment to customer service.
How did Amazon go from a logistics company that got packages to you quickly and efficiently to a behemoth of digital content defined by the Prime experience (which has much less to do with free shipping now and more with everything else)?
Stage 1: good to users
Amazon started with a large surplus of cash that it was able to allocate to its customers, and allocate it did. The company raised a fortune from early investors, then a larger fortune by listing on the stock market. Then it used that fortune to subsidise many goods, selling them below cost. It also subsidised shipping and offered a no-questions-asked, postage-paid returns policy.
This offer tempted millions of users to pile on to the platform. Once they were there, Prime membership went a long way to locking them in. Paying for shipping a year in advance is a powerful incentive to do your shopping on Amazon. Indeed, the overwhelming majority of Prime subscribers begin their e-commerce searches on Amazon and, if they find what they’re looking for, don’t shop around for a better deal.
You can think of Prime as a form of soft lock-in, Amazon binding you to its platform with a silken ribbon. But Amazon’s also got some iron chains in its toolbox. All the audiobooks and movies, and most of the ebooks and emagazines, you buy from Amazon are permanently locked to its platform.
They are sold with digital rights management (DRM), a form of encryption designed to force you to view or listen using apps that Amazon controls. Break up with Amazon and delete your apps, and you will lose all the media you’ve ever bought from the platform. For a certain kind of reader, listener or movie buff, this is a very high switching cost indeed.
Amazon has one more trick up its sleeve: after years of selling goods below cost, it has completed the work that big box stores started, eliminating swaths of small, independent, brick-and-mortar businesses. Its online predatory pricing tactics have done the same for much of the e-commerce world.
That means shopping anywhere other than Amazon has become substantially more inconvenient. These tactics – Prime, DRM and predatory pricing – make it very hard not to shop at Amazon. With users locked in, to proceed with the enshittification playbook, Amazon needed to get its business customers locked in, too.
Stage 2: abusing users, good to businesses
Amazon was initially very good to those business customers. It paid full price for their goods, then sold them below cost to its customers. It subsidised returns and customer service, too. It ran a clean search engine, which put the best matches for shoppers’ queries at the top of the page, creating a path to glory merchants could walk merely by selling quality goods at fair prices.
Then, once those merchants were locked in, Amazon put the screws on them. Amazon brags about this technique, which it calls “the flywheel”. It brings in users with low prices and a large selection. This attracts merchants who are eager to sell to those users. The merchants’ dependence on those customers allows Amazon to extract higher discounts from those merchants, and that brings in more users, which makes the platform even more indispensable for merchants, allowing the company to require even deeper discounts – and around and around the flywheel spins.
Let’s take a step back. This flywheel is the direct product of a radical legal theory that has had the world in its grip since the late 1970s. From the 1890s until the Jimmy Carter administration, US corporations’ power was blunted by antitrust law, which treated large companies as threats simply because they were large. Once a company is too big to fail, it becomes too big to jail, and then too big to care. Antitrust law was designed to fight that apathy and force companies to care.
A rival – and frankly terrible – theory of antitrust law says that the only time a government should intervene against a monopolist is when it is sure that the monopolist is using its scale to raise prices or lower quality. This is the consumer welfare standard theory and its premise is that when we find monopolies in the wild, they are almost certainly large and powerful thanks to the quality of their offerings. Any time you find that people all buy the same goods from the same store, you should assume that this is the very best store, selling the very best goods. It would be perverse (goes the theory) for the government to harass companies for being so excellent that everyone loves them.
It was under this theory that Jimmy Carter started to remove a few of the Jenga blocks from the antitrust system. Then Ronald Reagan came along and tore them out by the fistful. (Most of the rightwing policies for which we remember Reagan started under Carter, who was hoping to woo conservative voters. He failed.) Every president since – Republican or Democrat – has followed Reagan’s example, up to (but not including) Joe Biden.
The Amazon flywheel is designed to fit neatly into the consumer welfare framework. It proclaims itself to be an enemy to merchants on behalf of consumers. The flywheel is all about lowering prices, and the consumer welfare standard theory prizes low prices above all else.
Stage 3: a giant pile of shit
Amazon has a myriad of tactics at its disposal for shifting value from business customers to itself, some of which also involve shifting value away from end users, no matter what the cute flywheel pitch says.
It uses its overview of merchants’ sales, as well as its ability to observe the return addresses on direct shipments from merchants’ contracting factories, to cream off its merchants’ bestselling items and clone them, relegating the original seller to page umpty-million of its search results.
Amazon also crushes its merchants under a mountain of junk fees pitched as optional but effectively mandatory. Take Prime: a merchant has to give up a huge share of each sale to be included in Prime, and merchants that don’t use Prime are pushed so far down in the search results, they might as well cease to exist.
Same with Fulfilment by Amazon, a “service” in which a merchant sends its items to an Amazon warehouse to be packed and delivered with Amazon’s own inventory. This is far more expensive than comparable (or superior) shipping services from rival logistics companies, and a merchant that ships through one of those rivals is, again, relegated even farther down the search rankings.
All told, Amazon makes so much money charging merchants to deliver the wares they sell through the platform that its own shipping is fully subsidised. In other words, Amazon gouges its merchants so much that it pays nothing to ship its own goods, which compete directly with those merchants’ goods. [ed. emphasis]
Here’s where Amazon’s attacks on its merchants’ bottom lines turn into higher prices for its customers. A merchant that pays Amazon through the nose needs to make up the money somewhere. Hypothetically, merchants could eat Amazon’s fees themselves – in other words, if Amazon wants a 10% fee on an item with a 20% profit margin, the seller could split the difference, and settle for a 10% profit.
But Amazon’s fee isn’t 10%. Add all the junk fees together and an Amazon seller is being screwed out of 45-51 cents on every dollar it earns there. Even if it wanted to absorb the “Amazon tax” on your behalf, it couldn’t. Merchants just don’t make 51% margins.
So merchants must jack up prices, which they do. A lot. Now, you may have noticed that Amazon’s prices aren’t any higher than the prices that you pay elsewhere. There’s a good reason for that: when merchants raise their prices on Amazon, they are required to raise their prices everywhere else, even on their own direct-sales stores. This arrangement is called most-favoured-nation status, and it’s key to the US Federal Trade Commission’s antitrust lawsuit against Amazon.
Let the implications of most-favoured nation settle in. If Amazon is taxing merchants 45-51 cents on every dollar they make, and if merchants are hiking their prices everywhere their goods are sold, then it follows you’re paying the Amazon tax no matter where you shop – even the corner mom-and-pop hardware store. [ed. emphasis]
It gets worse. On average, the first result in an Amazon search is 29% more expensive than the best match for your search. Click any of the top four links on the top of your screen and you’ll pay an average of 25% more than you would for your best match – which, on average, is located 17 places down in an Amazon search result.
Why does this happen? Because Amazon makes more than $50bn every year charging merchants for search placement. When you search for a product on Amazon, the top results aren’t the best matches: they’re the matches that pay the highest fees to Amazon to be top of the list.
Researchers Rory Van Loo and Nikita Aggarwal call this “Amazon’s pricing paradox”. Amazon gets to insist that it has the lowest prices in the business, but no one can find those prices. Instead, we all pay a massive Amazon tax every time we shop there, and the merchants we buy from are paying an Amazon tax, too.
That means that, on average, the stuff at the top of an Amazon search results page is bad. It’s low-quality, high-priced junk. Even when you’re buying a known quantity, such as a specific brand of AA batteries, the top item will usually be more expensive than the items lower down on the page – the ones without the splashy banners advertising “Best Seller” or “Amazon’s Choice”. The Amazon smile logo gets a lot more sinister when it appears next to a top search result that costs 29% more than the best match for your query, thanks to Amazon’s $50bn-a-year paid search placement.
by Cory Doctorow, The Guardian | Read more:
Image: Noma Bar
[ed. I dropped Prime, and it's fine. The few things I order still have free (or miminal) shipping charges, and the movies (usually with additional rental fees) aren't missed at all.]
[ed. I dropped Prime, and it's fine. The few things I order still have free (or miminal) shipping charges, and the movies (usually with additional rental fees) aren't missed at all.]
