The Danger of Monopoly Power
A Review of Chokepoint Capitalism by Rebecca Giblin and Cory Doctorow
I recently finished listening to the audiobook of Chokepoint Capitalism by Rebecca Giblin and Cory Doctorow. I’m a fan of Doctorow and I have read several of his nonfiction and fiction books, as well as many of his blog posts over on https://pluralistic.net/
One of the main reasons I like his writing is that it’s almost always approachable and easy to understand. He is able to explain complicated subjects in a simple way, and build up reader’s knowledge base without starting from an assumed knowledge about tech or the other subjects he tackles. That being said, I felt that this was one area where Chokepoint Capitalism faltered a little. In the past few years I have read and learned a lot about neoliberal/Chicago-school economic theories, so I feel pretty comfortable with the ideas and framework and I began to write about them here. This book started off by blaming neoliberal policy for many harms, but only explained a tiny portion of what the ideology stands for. For someone who hasn’t heard the term, or only vaguely remembers it, it could sound more like Giblin and Doctorow are using “neoliberal” as a boogeyman or buzzword, rather than the widely adopted and widely harmful economic framework that it is. Hopefully that doesn’t turn anyone off this book because it is excellent and succinctly explained concepts like monopoly (when a seller has singular or almost singular control over a market), and monopsony (when a buyer has singular or almost singular control over a market). Using real world examples, both historical and current, the authors are able to illustrate the material harms caused by both of these types of concentration of power.
Many of the ideas presented were nothing unique: neoliberalism (which claims to value the free market above all else) hasn’t led to less regulation, only more powerful monopolies able to capture regulatory bodies through unlimited lobbying and campaign donations. However, the detailed analysis of specific creative sectors including literature, music, streaming, and podcasts, cast a light on the systemic issues that arise when a few big companies are allowed to control a market and how they will continuously choose to benefit their shareholders and CEOs at the expense of workers, artists, and limiting the landscape of culture to the detriment of all society.
One interesting point they detailed was the very real danger and harm of monopsonies, when one buyer controls much of the market. In many cases, monopsonies are harder to define and control through policy and are easier to create. A corporation can influence prices with a much smaller market share as a monopsony (buyer) than as a monopoly (seller) of goods or services. Amazon is a great example of this, as it forces authors and publishers to accept lower sale prices for e-books and audiobooks to attract customers to their subscription model and lock them in (in addition to a shady scheme whereby they offered unlimited returns/refunds to Audible customers, even if they had listened to an entire audiobook and then reduced the sales amount going to the authors based on the number of returns).
The book details the many shady business practices of Amazon, Google, Apple, Spotify, and major labels. It claims to be about “chokepoints” where businesses set up restrictions so they can act as middlemen and skim profits without providing a real service (or not at competitive prices) to consumers. However, many of the arguments seemed to be a rehashing of the dangers of corporate consolidation giving rise to monopoly and monopsony power. Anyone familiar with Doctorow’s past work will recognize the arguments against the DMCA (Digital Millenium Copyright Act), which went way too far in protecting digital copying of works even if a person owns them and the copying would normally be a legal act. For example, transferring an e-book from an e-reader to a computer, or transferring an audio file across different devices you own. One small provision in the DMCA allows companies to embed digital rights management (DRM) software in their products (e-books, music files, movies, etc.), which prevent the digital copying of files for any purpose. Then they sue anyone who removes or gets around the DRM, even if they do it for perfectly legal purposes under copyright law.
Where Chokepoint Capitalism excels is in detailing clear and longstanding corporate abuses and pointing to the legal structures and laws which permit or even encourage those abuses. The authors present compelling evidence of the problem, how it is harming many creative industries by preventing innovation and creativity, and they tie it all together with some simple policy solutions that would go a long way toward dismantling the chokepoints created by both legal and market power of major tech companies and allowing independent artists to take back some control of their creative work.
Policy details can often be messy, and specific suggestions often either fall short, or can have clear negative consequences. Giblin and Doctorow highlight examples in Europe where policies have had unintended consequences of entrenching the biggest companies that are able to comply with data security and privacy laws as a guideline for when a policy would go too far. Among the many steps listed in their policy framework, reducing the copyright duration on works to 20 years (based on expert consensus on the impact on innovation and investment), and allowing people to bypass DRM and only allowing companies to sue for actual copyright violations, not copies for personal use, seem to be the simplest and a great starting point. Their overarching framework and other policy suggestions are well-worth reading for anyone interested in either corporate monopolies, tech policy, or the creative industries in general.