Platform Enshittification: Three Stages of Value Extraction and Policy Failure

This conversation with Cory Doctorow, author of "Enshittification: Why Everything Suddenly Got Worse and What to Do About It," reveals a chilling, three-stage process by which online platforms systematically degrade user experience to extract maximum value for shareholders. Far from random decay, Doctorow argues this "enshittification" is a predictable outcome driven by policy failures that reward companies for mistreating users and suppliers. The non-obvious implication is that individual consumer choices are insufficient to combat this systemic rot; genuine change requires collective action to reform the policy environment that enables this extraction. Anyone building or relying on digital platforms, from startup founders to end-users frustrated by declining service quality, will gain a crucial understanding of the underlying forces at play and a roadmap for potential systemic solutions.

The Three-Act Play of Platform Decay

The term "enshittification," as coined by Cory Doctorow, isn't just a colorful descriptor for the frustrating experience of using many modern online platforms; it's a precise diagnosis of a systemic process. Doctorow argues that this decay isn't accidental but a deliberate, multi-stage strategy employed by platforms to maximize value extraction, ultimately benefiting shareholders and executives at the expense of users and business customers. This isn't about companies suddenly becoming greedy; it's about a policy environment that incentivizes and rewards this behavior.

The process unfolds in three distinct stages. Initially, platforms are benevolent to their end-users, focusing on growth and user acquisition. They aim to make their service indispensable, effectively locking users in through network effects and convenience. This is Stage One: the "good" phase, where the platform is useful, and users become dependent. Doctorow uses Facebook's early days as a prime example. Launched in 2006, it lured users away from MySpace by presenting itself as a more ethical alternative, emphasizing privacy and genuine connection. Users flocked to it, not through complex lock-in tactics like Uber's aggressive subsidies, but through a collective action problem: it was too difficult for friends to coordinate leaving a platform where their social graph resided.

"The reason that I think that story matters is it tells you that it's not merely the minor license to vulgarity although I think that's important people love cussing but it's the combination of the technical critique and the minor license to vulgarity that was like the magic peanut butter and chocolate here that if it were just the vulgarity people would have just been using it for all the interim."

Once users are locked in, the platform transitions to Stage Two. Here, the experience for end-users begins to degrade. The platform leverages its captive audience to attract business customers--advertisers, publishers, developers--by promising them access to these locked-in users. Facebook, for instance, began offering advertisers highly targeted ad placements, exploiting the very user data it had once promised not to misuse. Publishers were incentivized to post content directly on the platform, with the promise of reaching new audiences. However, as the platform's dependence on these business customers grows, it begins to turn the screws on them as well. Publishers find their reach throttled unless they post longer excerpts or even full articles, driving traffic away from their own sites. Advertisers face inflated costs and declining ad fraud rates, as highlighted by Proctor & Gamble's significant savings when they reduced their programmatic advertising spend. The platform harvests value from both users and business customers, funneling it upwards.

Stage Three is the final harvest. The business customers, now dependent on the platform for access to users, find that value is extracted from them too. Publishers are forced to surrender more content and traffic, while advertisers face escalating costs and diminishing returns. The platform, having extracted value from all sides, becomes a hollowed-out shell, offering a "homeopathic residue of value" to keep users tethered, while its primary purpose becomes shareholder enrichment. Doctorow points to Mark Zuckerberg's pivot to the metaverse as a potential manifestation of this final stage--a desperate attempt to find new avenues for value extraction when the core platform has become unpalatable. This isn't just about a bad user experience; it's about a system where companies can mistreat users and suppliers and thrive financially as a consequence, a direct subversion of traditional market discipline.

The Erosion of Market Discipline

Doctorow’s central thesis is that enshittification is not an inevitable consequence of capitalism but a product of specific policy failures that have dismantled the traditional mechanisms of market discipline. Historically, companies were kept in check by four forces: competition, regulation, labor power, and social license. Doctorow argues that decades of neoliberal economic policies have systematically eroded these checks, particularly competition and regulation, creating an environment where platforms can engage in extractive practices and be rewarded for it.

The decline of robust antitrust enforcement is a key culprit. For forty years, a prevailing economic theory suggested that monopolies were simply a sign of a company's superior performance, and breaking them up would be perverse. This led to a wave of consolidations, allowing companies like Google to acquire potential competitors rather than build innovative products in-house. Doctorow notes that Google's core success is search, with most of its other consumer-facing products being acquired. This consolidation also facilitates regulatory capture, where large, consolidated industries can exert undue influence over regulatory bodies, ensuring that regulations are either weak or serve the industry's interests rather than the public's.

"The reason billionaires want you to vote with your wallet is their wallets are thicker than yours and they're not very numerous as individuals so the only kind of election they can win is the one where you vote with people."

The legal system's response has been inadequate. Doctorow cites Google's antitrust trials, where judges have cited the rise of AI and chatbots as potential competitors, or the judge in the Facebook case dismissing the monopoly claim by pointing to TikTok as a competitor for user attention. Doctorow dismisses this as fundamentally flawed reasoning, arguing that these are not true competitors in the way that matters for systemic change. The legal framework, influenced by decades of weakened antitrust, struggles to address the reality of concentrated market power.

This erosion of discipline extends beyond tech. Doctorow illustrates how digitization is enabling enshittification in other sectors, such as nursing. Through digital platforms and data brokers, employers can access nurses' financial histories, using credit card debt as leverage to offer lower wages. This is not just "greed" in the colloquial sense; it's the specific application of platform dynamics to exploit labor, made possible by a lack of consumer privacy laws since 1988 and the digitization of employment relationships.

Charting a Course Beyond Enshittification

Doctorow is clear that individual consumer choices, while personally satisfying, are insufficient to reverse the systemic forces of enshittification. "You're not going to like make your consumption choices change this," he states. The real solution lies in collective action to reform the policy environment that enables this decay.

This involves a "Ulysses Pact"--a commitment made in a state of strength to prevent future weakness. For creators and businesses, this means building distribution systems that are open and not beholden to a single platform. This could include maintaining RSS feeds, avoiding being solely reliant on platforms like Spotify or YouTube, and utilizing open licenses for content that are irrevocable. For workers, it means unionizing. Doctorow emphasizes that a union can act as a bulwark against pressure from venture capitalists or executives who might rationalize making the platform worse for users.

"If your workers are unionized they can say we're not going to do this bad thing to our users."

Beyond individual organizational choices, Doctorow stresses the need to engage with groups dedicated to systemic change. He points to organizations like the Electronic Frontier Foundation (EFF) as examples of entities working to reform policy. He encourages readers to get involved with local political organizations, mutual aid groups, and labor unions fighting concentrated corporate power. This collective action, he argues, is not just about policy reform but about reclaiming the human need for community and shared purpose, moving away from isolated consumption towards engaged participation. While he acknowledges this is a "big lift," he insists it's a "good lift" because it reconnects people to each other and to the possibility of shaping a better future.

Key Action Items:

• For Creators/Businesses:

  • Immediate Action: Establish and promote an RSS feed for content distribution.
  • Immediate Action: Utilize irrevocable open licenses (e.g., Creative Commons) for published material.
  • Longer-Term Investment (12-18 months): Explore structuring as a B Corp or worker cooperative to embed stakeholder interests.
  • Longer-Term Investment (Ongoing): Diversify distribution channels beyond any single platform (e.g., avoid being exclusively on YouTube or Spotify).

• For Workers/Employees:

  • Immediate Action: Investigate and join or form a union within your workplace.
  • Immediate Action: Advocate for worker representation in company governance and decision-making.

• For All Users/Citizens:

  • Immediate Action: Support and join organizations advocating for policy reform (e.g., EFF, local advocacy groups).
  • Immediate Action: Participate in local mutual aid networks and community organizing efforts.
  • Longer-Term Investment (1-3 years): Actively engage in political advocacy for stronger antitrust laws and consumer privacy regulations.