Lately, I've been talking about how monopolization in the tech sector has been attended in a rise of defensive legal tools to prevent new competitors from "disrupting" the firms that gained dominance through disruption (the golden age for pirates who become admirals)
Here's a good concrete example: when Uber and Lyft walked away from Austin, TX (a tantrum over drivers being regulated like taxi drivers), the drivers formed a co-op and cloned the rideshare app: @ride_austin
Ride is just fuckin' great. Seriously. It works exactly like Uber and Lyft, but the drivers get an extra 25% -- the share that would normally be siphoned off for Uber/Lyft's shareholders.
I only go to Austin once/year-ish, but I keep Ride on my phone and only use it in town. Drivers LOVE it. I meet drivers who commute to Austin (eg from San Antonio) just to drive for Ride instead of Lyft/Uber.
But of course, all the drivers also have Uber/Lyft on, because not every passenger has Ride (particularly out-of-towners). I've had lots of arguments with investor blowhards about #platformcooperativism and they say this is why co-ops will fail, they're too hard to discover
But imagine if there was an app that drivers and passengers could install that allowed them to express a preference for a co-op. I land at Austin airport and page a Lyft, but the app senses that both me and the driver have Ride installed.
It seamlessly cancels my Lyft order and re-places the order with Ride, reconnecting me and the driver. I don't even have to know that Ride exists: the app could have a list of co-op alternatives, city by city, and IT would know that Ride exists
This arrangement is #disruptive. It allows users to express preferences, improves competition and produces a better service that costs less and delivers more to all its stakeholders. There's only one problem: it's radioactively illegal.
For this app to work as described, you'd have to reverse-engineer Uber and Lyft's passenger and driver apps. Not that technically challenging, but doing so would violate the EULA, giving rise to #CFAA claims from the companies.
It would also involve bypassing an access control for a copyrighted work, which is a felony under #DMCA 1201, punishable by a five-year prison sentence and a $500K fine (for a first offense).
Both CFAA and DMCA were not intended to work this way (though critics warned Congress that this kind of abuse was inevitable), but as Big Tech has gotten bigger, it has carefully built up a jurisprudence that lets it act this way.
There's a story about Big Tech market concentration that goes like this: "Tech has NETWORK EFFECTS and FIRST MOVER ADVANTAGE and that's why it got so big so fast. This can't be the whole story (otherwise we'd be Altavistaing from our PETs to find cool stuff on Friendster)
Historically, when a tech company got big, it attracted competitors who saw its dominance as an opportunity, not an unassailable wall. "Oh, IBM has sold a bunch of mainframes and is marking up VT100s at 3,000%? Scuse me, I'm off to make a VT100 that's sold at a 10% margin"
Or like when Facebook made a Myspace scraper that would login to Myspace on behalf of new Facebook users whose friends were still on Myspace: the bot would import waiting Myspace messages and let users reply to them on Facebook, pushing them back to Myspace
(Facebook later sued Power Ventures, a company that did the exact same thing for Facebook users wanting to migrate off the system -- and put them out of business. Every pirate wants to be an admiral)
Network effects are a double-edged sword. Concentrated, high-margin firms attract competitors and in the absence of legal (not technical) countermeasures, one of those competitors will eventually find a way to erode the advantage.
There are LOTS of things we can do to unfuck the fuckery of Lyft and Uber and we should do 'em: but don't forget that they got big in part by subjecting the incumbents they triumphed over to a kind of hardball that no one can subject Lyft and Uber to
Big Tech is every bit as much an outcome of policy as it is an outcome of network effects, first mover advantage, aggregating demand, globalism, access to capital, etc. Big Tech is big because of an arsenal of monopolistic legal tactics, not coding virtuosity.
(And if you're ever in Austin, use Ride!)
