The illusion of the open platform: how 'fake markets' leverage technology to centralize control

“ In one generation, the Internet went from opening up new free markets to creating a series of Fake Markets that exploit society, without most media or politicians even noticing.
The open internet markets American culture loves to use the ideal of competitive free markets as the solution to all kinds of social problems. Though the vaunted Free Market has no incentives to, say, take care of babies with cancer, a well-functioning market can definitely be a great way to see which provider offers the cheapest price for a roll of toilet paper or a bushel of apples. ”

“ Changes in other sectors, most notably the open source model of software production and values associated with the internet of free access, and open approaches have influenced (and been influenced by) practitioners in higher education. The past decade or so has seen the growth of a global open education movement, with significant funding from bodies such as the William and Flora Hewlett Foundation and research c­ouncils. Active campaigners in universities have sought to establish programmes that will release content—­including data, teaching resources and ­publications—openly ”

“ Outside of these headline figures there are fundamental shifts in practices: academics are creating and releasing their own content using tools such as Slideshare and YouTube; researchers are releasing results earlier and using open, crowdsourcing approaches; every day millions of people make use of free, open online tools and resources to learn and share.
In fact, openness is now such a part of everyday life that it seems unworthy of comment. ”

“ A single opaque algorithm defines which buyers are matched with which sellers. Sellers have no control over their own pricing or profit margins. Regulators see the genuine short-term consumer benefit but don’t realize the long-term harms that can arise. This is, by any reasonable definition, no market at all. One might even call Uber a “Fake Market”. Yet, by carefully describing drivers in their system as “entrepreneurs” and appropriating the language of true markets, Uber has been welcomed by communities and policymakers as if they were creating a new marketplace. ”

“ Competition in the open market seems to secure that each consumer shall obtain the best possible terms; and again, since all men are consumers whether they produce or not, or whatever they produce, the greatest measure of comforts for each seems likely to be attainable on these lines. For those who are frankly cosmopolitan, and who regard material prosperity as at all events the prime object at which public policy should aim, the free-trade doctrine is readily transformed, from a mere principle of criticism, till it comes to be regarded as the harbinger of a possible Utopia. ”

“ The rise of rigged markets The inevitable automated gaming of the early open digital markets inadvertently catalyzed the start of the next era: rigged markets. Google got concerned about nefarious search engine optimization tricks, and kept changing their algorithm, meaning that pretty soon the only web publishers that could thrive were those who could afford to keep tweaking their technology to keep up in this new arms race. ”

“ He commands the situation, and can take care not to become its victim; and he covers his risks by making the poor man pay their cost; for the poor man, living from hand to mouth on his daily earnings, is the slave of his necessities. The vicissitudes of the great business world overtake him unawares, for he has not the opportunity to watch the workings of hidden forces ”

“ The third and last method of reducing the earnings of the men as above enumerated, is by a combination of both the systems before explained, viz., by grinding and driving united, that is to say, by not only paying the men a smaller wage than the more honourable masters, but by compelling them to work longer hours as well. Let me cite another illustration from the trade.
C is a large contractor, and both a grinder and driver. He employs 28 men, and not only pays them less wages, but makes them work longer hours than the better class of employers. ”

“ And passengers can’t make informed choices about selecting a driver: The algorithm by which a passenger and driver are matched is opaque—to both the passenger and driver. In fact, as Data & Society’s research has shown, Uber has at times deliberately misrepresented the market of available cars by showing “ghost” cars to users in the Uber app.
It seems this “market” has some awfully weird traits.
Consumers can’t trust the information they’re being provided to make a purchasing decision. ”

“ Give us a free and open competition in our own market, and we fear not to encounter like competition in the general markets of the world. If, under all our discouragements, by the acts of our own government, we are still able to contend with these against the world, can it be doubted if the impediment were removed we should force out all competitors, and thus also enlarge our market, not by the oppressions of our fellow citizens of the other states, but by our industry, enterprize and natural advantages. ”

“ OK, so first of all, this reality of opaque creativity, you know that as proprietary code. Creativity where you don't get to see how the thing works, and the law protects the thing you can't see. It's not Shakespeare that you can study and understand because the code is, by nature, open. Nature has been reformed in our modern, technological era, so nature can be hidden and the law still protects it—and not just through the protection, but through increasing control of uses of creative work. ”

“ But even in these fake markets, there are currently multiple providers offering their services within the ecosystem. The providers are those Uber drivers or Facebook publishers being lauded as independent entrepreneurs thriving on the platform.
But Uber has already plainly announced its roadmap: Self-driving cars. The much-lauded independent driver-entrepreneurs will be replaced by completely automated service providers as quickly as possible, and not only will those new self-driving cars not have drivers who need to be paid, they will all be owned by Uber itself. ”

“ Among the 19 master scavagers there are altogether 7 employers who are both grinders and drivers. These employ among them no less than 111 hands; hence, the gross amount of which their workmen are yearly defrau—no, let me adhere to the principles of political economy, and say deprived—is as under:—
Here we perceive the gross loss to the operatives from the system of combined grinding and driving to be no less than 1164l. 3s. per annum.
Now let us see what is the aggregate loss to the working men from the several modes of reducing their wages as above detailed. ”

“ On the Red river the clerks were accustomed to graduate the fare according to the locality where the passenger came on board. The more fertile and wealthy the region, the higher was the price of passage. Travelers from the cotton districts paid more than those from where tobacco was the staple product, and those from the sugar country paid more than any other class. With few exceptions there was no ticket system, every man paying his fare when it best suited him to do so. ”

“ Few words in the English language pack as much ambiguity and sexiness as ‘open.’ And after O’Reilly’s bombastic ­interventions – ‘Open allows experimentation. Open encourages competition. Open wins,’ he once proclaimed in an e­ssay – ­its luster has only intensified. Profiting from the term’s ambiguity, O’Reilly and his collaborators ­likened the ‘openness’ of open source software to the ‘openness’ of the academic enterprise, markets, and free speech. ”

“ Firstly, there is a real conflict at the heart of the direction openness takes. We’ll explore this more throughout this book, but for many of the proponents of openness its key attribute is about ­freedom – ­for individuals to access content, to reuse it in ways they see fit, to develop new methods of working and to take advantage of the opportunities the digital, networked world offers. The more commercial interpretation of openness may see it as an initial tactic to gain users on a proprietary platform, or as a means of accessing government funding. ”

“ Much of the work around open licensing, particularly that of Creative Commons, has been initiated in or influenced by higher education. Licensing is, in the eyes of many, one of the true tests of openness, as the ability to take and reuse an artefact is what differentiates open from merely free. Licences are the main route through which broader policy based initiatives can be realised. By adopting a position on licences, governments, charities, research funders, publishers and technology companies create a context whereby openness follows. ”

“ In fact, all the mottos of free software development have their counterparts in the theory of democracy and open society; "given enough eyeballs, all bugs are shallow" is merely the most obvious example. ”

“ Governance processes, too, can be assembled through distributed methods on a global network, by people with widely varying motivations, skills, and reserve prices.5 24
The free and open source software movements have produced software that rivals or, some claim, exceeds the capabilities of conventional proprietary, binary-only software.6 Its adoption on the "enterprise level" is impressive, as is the number and enthusiasm of the various technical testaments to its strengths. You have almost certainly used open source software or been its beneficiary. ”

“ I­n the previous chapter I raised the issue of openwashing and using openness as a route to commercial success, but it is also true that an open or ­part-​­open model can be an effective business model. The freemium approach works this way, where a service is open to a large extent, but some users pay for additional services, with services such as Flickr being an example. If this is the goal, then openness works by creating a significant demand for the product. ”

“ Instead of discovering new models of open education, running a MOOC on the Coursera (or EdX or FutureLearn) platform becomes seen as the way to run a MOOC. Diversity in the market is undesirable for commercial providers; they want to become the Microsoft or Google of MOOCs, since that leads to the best revenue. Indeed, becoming the dominant provider may be the only route to high revenue returns in the MOOC field. In the opening chapter I argued that the tensions in open education could be deemed a battle, because there was real value associated with being a victor. ”

“ The tensions in the open access publishing world are representative of those in all aspects of openness in education: Incumbents have a vested interest in maintaining the status quo; there are considerable sums of money involved; the open approach allows new entrants to the market; the open label becomes a marketing tool; and there are tensions in maintaining the best aspects of existing practice as we transition to new ones. Driving it all is a conviction that the open model is the best approach, both in terms of access and innovation. ”

“ For instance, the notion that content should be free in terms of price was not a driving concern of the open universities or the open source software movement, although open source software often is free. It was with the development of web 2.0 that free became an expectation. One can see the various aspects of openness in education as aligning themselves with some of these principles, but not all of them. For instance, the commercial MOOCs are taking the free cost and open access element, but not necessarily the freedom to reuse. ”

“ For example, we can sincerely laud Uber for making it easier for African American passengers to reliably hail a car when they need a ride, but if persistent patterns of bias from drivers arise again in the Uber era, we’ll have a harder time regulating those abuses because Uber doesn’t usually follow the same policies as licensed taxis. ”

“ How unassailable would be the majesty and the tyranny of monopoly if it could thus get sanction of law and the authority of government! By what means, except open revolt, could we ever break the crust of our life again and become free men, breathing an air of our own, living lives that we wrought out for ourselves?
You cannot use monopoly in order to serve a free people. You cannot use great combinations of capital to be pitiful and righteous when the consciences of great bodies of men are enlisted, not in the promotion of special privilege, but in the realization of human rights. ”

“ A massive system of lawyers regulating creativity as copyright law has expanded in unrecognizable forms, going from a regulation of publishing now to a regulation of copying. You know the things that computers do when you boot them up? Going from copies to, not just copies of the original work, but even derivative works on top of it. Going from 14 years for new works produced by a real author—there are fewer and fewer of those people out there—to life plus 70 years. That's the expansion of law, but also there's been an expansion of control through technology. ”

“ Either by those who see you as a threat, who then invoke the system of law we call patents, or by those who take advantage of the extraordinary expansion of control that the law of copyright now gives them over innovation. Either of these two changes through law will produce a world where your freedom has been taken away. And, If You Can't Fight For Your Freedom, You Don't Deserve It. ”