Prelims

Half Title Page

INTERNET OLIGOPOLY

The Corporate Takeover of Our Digital World

Series Page

DIGITAL ACTIVISM AND SOCIETY: POLITICS, ECONOMY AND CULTURE IN NETWORK COMMUNICATION

The Digital Activism and Society: Politics, Economy and Culture in Network Communication series focuses on the political use of digital everyday-networked media by corporations, governments, international organizations (Digital Politics), as well as civil society actors, NGOs, activists, social movements and dissidents (Digital Activism) attempting to recruit, organise and fund their operations, through information communication technologies.

The series publishes books on theories and empirical case studies of digital politics and activism in the specific context of communication networks. Topics covered by the series include, but are not limited to:

• the different theoretical and analytical approaches of political communication in digital networks;

• studies of socio-political media movements and activism (and ‘hacktivism’);

• transformations of older topics such as inequality, gender, class, power, identity and group belonging;

• strengths and vulnerabilities of social networks.

Series Editor

Dr Athina Karatzogianni

About the Series Editor

Dr Athina Karatzogianni is an Associate Professor at the University of Leicester, UK. Her research focuses on the intersections between digital media theory and political economy, in order to study the use of digital technologies by new sociopolitical formations.

Published Books in this Series

Digital Materialism: Origins, Philosophies, Prospects by Baruch Gottlieb

Forthcoming Titles

Nirbhaya, New Media and Digital Gender Activism by Adrija Dey

Title Page

INTERNET OLIGOPOLY

The Corporate Takeover of Our Digital World

BY

NIKOS SMYRNAIOS

Université de Toulouse, France

United Kingdom – North America – Japan – India – Malaysia – China

Copyright Page

Emerald Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First published by Institut national de l’audiovisuel as Les Gafam Contre L’Internet: une économie politique du numérique, 2017

Copyright © Nikos Smyrnaios

English language translation published under licence by Emerald Publishing Limited, 2018

Translated by Cynthia J. Johnson

The moral right of the copyright holder and translator has been asserted.

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No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the UK by The Copyright Licensing Agency and in the USA by The Copyright Clearance Center. Any opinions expressed in the chapters are those of the authors. Whilst Emerald makes every effort to ensure the quality and accuracy of its content, Emerald makes no representation implied or otherwise, as to the chapters’ suitability and application and disclaims any warranties, express or implied, to their use.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN: 978-1-78769-200-8 (Print)

ISBN: 978-1-78769-197-1 (Online)

ISBN: 978-1-78769-199-5 (EPub)

About the Author

Nikos Smyrnaios is an Associate Professor at the University of Toulouse, France, where he teaches theory, history, sociology and economics of the media and the Internet. Born in Athens, Greece, in 1976, he obtained a PhD in Information and Communication Sciences from the University of Grenoble, France. He has published numerous articles in peer-reviewed journals and book chapters in English, French and Greek and has presented at international conferences on the political economy of communication, digital journalism and the political use of social media.

Foreword

In The Internet Oligopoly: The Corporate Takeover of Our Digital World, Nikos Smyrnaios advances what is going to prove to be a seminal critique of the digital political economy. The book takes the reader on a journey tracking the commodification of the Internet from the legacy of ARPA, deregulation and the neoliberal turn, to the unquestioned privatisation of the Internet, the birth of Silicon Valley, start-ups and failed mergers. Smyrnaios is a real virtuoso in setting up his critique, and leaves no stone unturned: the conditions for the emergence of the oligopoly, winner-takes-all economics, regulators avoiding any challenge to the oligopoly, the exploitation of digital labour, intermediaries’ strategies, Facebook and Google’s advertising dominance, personal data as a political issue and the impossibility of democratic regulation.

Smyrnaios identifies four parameters which strengthened the GAFAM (Google, Apple, Facebook, Amazon and Microsoft) to the point of oligopoly: the emergence of a digital information economy, the technological convergence of previously separate sectors (IT, telecom, devices, software, online services), and the financialisation and global deregulation of the economy. GAFAM developed global market platforms, forcing traditional actors in the cultural industries to adapt and serve their owners exclusively, thus making the development of alternatives too difficult.

As quite a few of these oligopolistic actors rely on indirect financing, algorithmic strategies were developed: strategies which exploit their customers by collecting and using data on their identity, socio-demographic characteristics and preferences. Resistance to Google, Amazon and the long-established monopoly-targeting against Microsoft has been brought into sharp focus by the Facebook data breach and Cambridge Analytica scandal. Now the GAFAM problem has come to the fore in the European Union with the General Data Protection Regulation (GDPR), legislation in the United States, United Kingdom and elsewhere. Ultimately, these recent developments justified a decade-long academic scholarship cautioning against oligopoly, deregulation, privatization, privacy, surveillance, censorship, digital labour exploitation and broader issues, stemming from the fact that digital technologies are powerful vectors of neoliberal hegemony.

Within this context, Smyrnaios illustrates beautifully both the historical emergence of the Internet oligopoply and the theoretical development of the debates it has generated. Real gems in his account include Carmen Hermosillo’s experience of the Whole Earth 'Lectronic Link (WELL, founded 1985), who already in 1994, predicted the future of the Internet: ‘I began to see that I had commodified myself […] I created my interior thoughts as a means of production for the corporation that owned the board I was posting to, and that commodity was being sold to other commodity/consumer entities as entertainment. That means that I sold my soul like a tennis shoe and I derived no profit from the sale of my soul’. ¹

The mid-1990s are given intense treatment by Smyrnaios, and he explains forcefully how these years set up the conditions for the oligopoly’s emergence: ‘This crucial historical moment, in which the state pulled out of managing the Internet, would give birth to the start-up culture as well as financialisation that would lead to the speculative bubble of the “new economy”. Despite the spectacular bursting of this bubble, this new economy would contribute significantly to the concentration of the telecom and the media, thereby laying the groundwork for the advent of the internet oligopoly’.

The critical issue of the privatization of the Internet was never debated in American society, unlike for other comparable cases, such as the debates over bandwidth allocation or the railway network, and no significant political actor opposed its privatisation and deregulation. As Smyrnaios explains:

As such, negotiations were dominated by large firms such as telecommunications operators and online service providers. As a result, citizen and user groups which may have opposed it were excluded from the process. This was all the more true because the issue was highly technical, complex, and with future implications that were difficult to predict. In addition, some internet pioneers, including the hacker community, believed cyberspace was a separate universe and thus not subject to the laws of government and the market. And thus it was with a single decision, which seemed to be a mere technical matter, that the fate of the internet changed in April 1995.

When there is political will to fight the GAFAM, as was the case in Europe, especially from the 2013 Snowden revelations onwards, the complexity of the technical and legal transnational issues as well as the GAFAM lobbying proved an impediment to breaking down the ologopoly’s hold on the global market. Indeed, the numbers supporting Smyrnaios’ argument are staggering:

The GAFAM are in the top twenty companies in the world that spend the most on research and development for new technologies and products ($ 11.4 billion for Microsoft, $ 9.8 for Google, $ 9.3 for Amazon and $ 6 for Apple in 2015). These four companies, as well as Facebook, also account for 280 mergers and acquisitions between 2011 and 2015 for a budget of several tens of billions of dollars.

Smyrnaios demonstrates how vertical integration proves a crucial weapon for the Internet oligopoly, as the oligopoly is present in four subsets and markets that are part of the infomediation infrastructure: operating systems, consumer electronics, telecommunications networks, and data centres, whereby: ‘A close examination of Google, Apple, Facebook, Amazon and Microsoft reveals that they are all well positioned throughout the chain, either through mergers or acquisitions, stock purchases, or exclusive and privileged partnerships with companies that are upstream or downstream of their core business’.

At the heart of GAFAM, tracking methods result in markets where gigantic quantities of information on the profiles and habits of Internet users are constantly bought and sold, and here Smyrnaios provides a wonderfully detailed account of the workings of the leaders in the tracking market and the fundamental political implications they raise in regards to mass surveillance and freedom of expression, but above all the ability of our societies to produce common goods to benefit everyone without a market goal.

Thus, in this invaluable work, Smyrnaios solidly concludes his argument: ‘Among intellectuals interested in digital issues, as well as among practitioners and tech-savvy users, there is a collective realisation that the direction taken by the internet is not the right one: increased commodification, the concentration of resources, and ubiquitous surveillance. The internet, under the powerful sway of the oligopoly, increasingly resembles what it was supposed to oppose, namely, computing as a technology of domination’.

Considering the importance of this work for several disciplines cross-fertilising each other to push the area of platform economics to projects attuned to equality, solidarity and the end of digital labour exploitation and democratic disruption, it is a vital weapon in my own arsenal, and I foresee it to be thus for both our peers and students.

Athina Karatzogianni, Metz, 24 May 2018