Let me show you a magic trick. Make a choice -- any choice. You're already online, so maybe you want to read the news, check your email, surf your newsfeed, buy some food or any other number of things. Now for the trick, I'm going to tell you the companies that facilitated whatever choice you just made. It was almost certainly Google, Amazon, Apple, Microsoft or Facebook.
OK, not much of a trick. After all, everyone knows these five tech giants control vast swaths of the internet, directly or indirectly -- Amazon alone, for instance, facilitates nearly 40% of online commerce in the US and holds a whopping 23 million IP addresses thanks to its subsidiary Amazon Web Services.
That online control has material ramifications. Last week, leaders of companies like Sonos and Popsockets took shots at Amazon, Google, Apple and Facebook in a House antitrust hearing, arguing that the tech giants exert unfair control over their respective markets -- shutting out competitors, squashing startups and exploiting smaller companies to maintain their immense power and profit. Ah, monopoly: It's a tale as old as, well, the board game, at least.
But the problem goes deeper than the economy. These massive companies might actually be making us worse people. They're narrowing our choices online, intentionally corralling us toward behavior that benefits them. Rather than outright coercing us, though, these companies use a handful of key motivators -- convenience chief among them, not to mention the "approval, attention, retweets, shares and likes" of social media -- to condition us to behave in certain ways. But that conditioning has an unexpected outcome: As we practice decision-making driven more by impulse and economic self-interest than by any more deeply held values, we erode our conscience over time. In short, we're becoming worse human beings.
Mapping the Amazon
The first part of any good magic trick is creating the illusion of choice. When Google search exploded almost 20 years ago, for example, the search results it offered were selected by a number of factors attempting to measure, essentially, relevance. You were searching for something, and Google wanted to help you find it -- from a credible source.
Google's goals have shifted.
Now when you Google something, the page is typically filled with options selected not simply by relevance, but by which companies have paid Google for the publicity. David Heinemeier Hansson, co-founder of the software company Basecamp, pointed out in last week's antitrust hearing that companies can take out advertisements against their competitors' names. That means if you Google "Basecamp," the top results could actually be the websites of its direct competitors.
Google is requiring businesses to "pay protection money," Heinemeier Hansson argues, just to be properly represented in customers' online search results.
Google is wringing significant profit from its old identity as an unbiased purveyor of information, and it's not the only one. Amazon, too, exerts power over the companies selling products through its online store, imposing stringent requirements and charging extra fees that, according to many third-party sellers on the site, damage their businesses. Amazon's dual role as platform and competitor represents a fundamental conflict of interest, letting the tech giant easily (and legally) undermine direct competitors in subtle ways, such as changing policy without due notice, refusing personal support for sellers without additional fees and even requiring sellers to deal directly with Amazon, which can then set its own prices on their products.
The list goes on for these tech giants: Apple's control of the App Store; Google's control of the Play Store; Facebook's control of content and user privacy. Each of these platforms claims to offer choice, but that choice is always highly directed.
Going beyond the advertisement
OK, OK. You get it. But using advertising to direct customer decisions has been around for at least a century, and isn't this whole situation better for the consumer anyway? Last week I drove to two stores looking for batteries to use in a set of smart shades. Both stores were out of stock in the variety I needed, so I pulled up my Amazon app, ordered a box (which was cheaper than in both stores) and received them the next afternoon. I was reminded in that moment that, problematic advertising and conflicts of interest aside, Amazon still offers an impressive customer experience, by and large. Maybe it's winning online retail so handily because it provides the best user experience.
But it goes beyond delimiting and directing customer choice in the traditional ways. Amazon is able to provide that best experience in part because it can adopt short-term policies that lose the company money in order to completely shut out competitors.
Say, theoretically, a "Smart Battery" costs $10 on the Amazon site. If Amazon wants to, assuming the trademark is up, it can sell an Amazon-branded Smart Battery at a loss, for $8. Customers buy the cheaper option, its competitors go out of business, and three years later Amazon can push its price up to $12.
Amazon likely wouldn't use such tactics on a small scale, but it's already doing so on a larger one. It's called buying growth. Last quarter, Amazon spent an estimated $1.5 billion to make 24-hour shipping a reality for Prime customers. Good for users in the short term, sure, but the long game is to supplant local convenience or grocery stores, which provide competition in key areas Amazon wants to control. And Amazon can always bump up its Prime membership fee incrementally to help close the gap created by 24-hour shipping.
You forgot about the magic trick, I can tell. Which is actually part of the trick. At some point, these companies become so ubiquitous that life without them becomes almost untenable, as reporter Kashmir Hill demonstrated so thoroughly in her series Life Without the Tech Giants. But for those of us using smart home technology, the problem becomes even stickier: Google and Amazon's voice assistants have become the new hubs for the vast majority of connected home technology. Amazon has partnered with some 9,500 companies, representing over 100,000 devices.
What's more, we become so busy, so pressed for time, that our short-term economic interests further inoculate us. We buy something on Amazon because it's quicker and cheaper. We use Gmail because it's most reliable. We use Face ID on our iPhones because it's quicker than that pesky passcode. And we forget the reports that Amazon is stacking the deck, that Google shares our emails with companies and that Apple shares our faces with apps.
But something else gets lost in the shuffle of this trick. Despite the common misconception that our values always direct our behavior, the opposite is often true. What we do, we come to value.
The problem with Amazon and Google and all the other tech giants restricting our choices goes beyond the material. These companies are actually training us -- intentionally or not -- for hours each day to act primarily on impulse, convenience and short-term economic self interest, even when our more deeply held values are at odds with that.
After all, high percentages of people value buying local products (it's why I drove to two stores before ordering batteries from Amazon). We value (which is why so many struggle to understand the subtle ways ). We value choice (which is why so many use ad-blockers and scroll past the promotional content on so many platforms).
But when we're consistently confronted with the choice between convenience and inconvenience, a lower price tag and a higher one, it's natural to respond to our immediate, material concerns. But each time we do that, we have to make a second choice: Do we care that we're making decisions at odds with our values, or do we just refashion our values to align with our behavior?
Tech giants are neither evil nor altruistic, but they are undoubtedly reshaping economies, replacing markets and monetizing seemingly everything. We shouldn't let them rewrite our values, too.