How Software Bullies Beat You Up for Change

Over the next few years, you’re going to hear a lot about Lina Khan, the Chair of our Federal Trade Commission. One of her jobs is to protect you against the software bullies who beat you up for change.

Sometimes they do it so cleverly that you don’t even know you’re being had. How so? Read on.

But first I’d like to set a bit of background. I’m no “radical left-wing socialist.” Nor am I a knee-jerk corporation basher. Fifteen years ago, I wrote a paean to corporations and their effects on human history so far.

Ever since the British East India Company helped discover and exploit America, corporations have brought innovative and powerful change to human life. I predicted their rise to dominance in economics, social life, and eventually politics. I thought and think that eventually they will eclipse governments, just as governments (at least in the West) had replaced the Church’s deadening autocracy during the first millennium. Collectively, I wrote, corporations could replace both church and state as the most powerful institutional influences on human life.

Little did I foresee how quickly it would all happen. Today, corporations provide virtually all of our necessities and luxuries, except for water, power, trash collection, protection against crime, and national defense. Through their little “click here to sign up” contracts—which most customers never read—they’ve replaced the entire Anglo-American legal system with a system of contractual “law” that they themselves have written.

Not surprisingly, their system favors them in both subtle and dramatic ways. Legal scholars call these little agreements with consumers “contracts of adhesion.” Why? They are the fly paper and you are the fly. If you “click here” to “sign” them, they mostly strip you of all your rights under the British and American common law built up since Magna Carta in 1215—over eight centuries.

If you have a dispute with the corporation, for example, the flypaper usually strips you of the right to a trial by a jury of your peers that our Constitution ostensibly guarantees. Far less do you get a class action—the right to combine your suit with those of other consumers similarly aggrieved, so as to make suing for small amounts worth while for you and the lawyers who might represent you. Instead, you get secret arbitration, sometimes with a gag order, before an unknown (to you) professional arbitrator who, as often as not, makes his/her living protecting the “rights” of corporations. Even if you win, you can’t say a word to encourage others similarly harmed. You must enjoy your measly personal recovery in secret.

But that’s just the bare beginning of corporate power in modern America. Today corporations have co-opted, if not utterly taken over, our political system and, increasingly, the world’s. When I wrote my first general analysis, I pointed out that Apple Computer had more cash reserves than France. Today, the US government is $31.4 trillion in debt. In contrast, US corporations collectively earned $2.3 trillion in profit for just the first quarter of 2023. That’s an annualized profit of $9.2 trillion, based on a down quarter!

So US corporations, collectively, could pay off the entire US national debt in less than four years, without losing a dime. That’s economic power!

As for politics, you don’t have to ask who controls us. Through their so-called “conservative” Federalist Society, the corporate oligarchs have utterly co-opted our Supreme Court. They've turned it sharply to the right, in a country where the Republican candidate for president has lost the nationwide popular vote in all but one of the last nine presidential elections.

This ostensibly “legal” coup d’etat, wrought with the help of our own Demagogue, has given us a radically reactionary Supreme Court. Among many other things, it has: (1) declared money “speech” and therefore “soft” bribery (in the form huge and dark-money contributions) constitutionally protected; (2) gutted the Voting Rights Act, thereby making voting much harder for citizens, especially minorities; and (3) taken away a Court-granted right of women to enjoy bodily autonomy in reproduction. Affirmative action in education and the right of the “administrative state” to have Ph.D.s and other experts make decisions that require expertise are even now on its chopping block.

To call these results “conservative” is a misnomer. Far from “conserving” what we as a nation have had, they are giving us an entirely new regime of money, politics and basic human rights. In that regime, money doesn’t just talk; it rules. And the millennial commands of near-obsolete religions have risen from their graves to rule us once again, here in the US, in the twenty-first century.

Next to these dismal megatrends in our declining nation, the examples below may seem trivial. But they set a tone. Little things add up. In this case, they add up to a picture of uniform, increasing and deeply troubling corporate oppression of individuals. All of that might pass itself off as perfectly legal, but for Lina Khan.

Khan’s most recent effort was outlined in today’s New York Times. She’s suing to stop Amazon from making it confusing and hard for customers to cancel their $139-per-year Amazon Prime subscriptions. Amazon reportedly made $31 billion on these subscriptions in 2021—separately from all the profit on its sales of goods and streaming video. According to Khan’s suit, Amazon “defends” this easy money by using all the tricks of clever and even deceptive programming to deflect and discourage consumers who want to cancel their subscriptions from doing so.

Worse yet, according to the NYT article, Amazon apparently changed some of these tactics in response to pre-suit pressure from Khan. But how, for how many customers, in what markets, and how permanent were these changes? Finding the answers to those questions will require extraordinary investigation, on the part of Khan and her small team of lawyers at the FTC, into the Internet’s operation and recent history.

And therein lies the rub of all government enforcement of this sort. A software monopoly holds all the cards. It controls what the software does, where the customer’s and the corporation’s data are stored (here, abroad, and in what state), and how long they are stored. It controls whether incriminating evidence lasts long enough for enforcement, or even for outside review.

As Internet-law guru Larry Lessig is reported to have said, “The code is the law.” What he meant was that, whatever the law says, the computer code determines what actually happens in interactions of software firms with their customers. And the code and its process can be changed in an instant, even to hide or exacerbate illegal or immoral behavior or to delete code once used for immoral purposes or evidence of that use.

Today AI can make the hiding, exacerbating or deleting automatic and nearly instantaneous. So now it’s cops versus AI robbers, and the latter can respond to threats of legal sanctions in milliseconds.

Amazon’s reported maze to cancel Prime membership doesn’t bother me yet. I use its Prime free delivery at least a couple of times a month, and its video streaming often enough to justify the $12 per month subscription fee all by itself. But that’s not the point. My wife and I have duplicative subscriptions, and someday we might want to cancel one. Anyway, other customers who find a Prime subscription uneconomic or useless shouldn’t be forced to continue it by software that’s coercive, confusing, contradictory or simply hard to use. What’s a small burden to one consumer may be a bigger one to another; a mega-corporation should not be entitled to maintain a $31 billion annual windfall by bullying ordinary people.

Just recently, I discovered another, similar scam by Google. My wife and I have houses in different states, and I “commute” between them often. A few years ago, I abandoned an outmoded Apple Macbook Air as my portable computer for a Chromebook using Google’s Chrome operating system. I liked Chrome’s relative simplicity, speed and inter-browser-tab security. But I’m an old school kind of guy, having first worked with and programmed digital computers in 1961. I like my storage local, and my backup storage also local, all completely under my control.

Unfortunately, Google’s business model is based on Cloud storage, and it’s constantly dunning me to buy more. It makes it hard, although not impossible, to store data locally, whether on the Chromebook’s ample internal storage or on an external thumb drive. But lately I’ve noticed a new scam. Whenever I move the laptop, Google asks me to sign in again, on a screen with a microscopic password field that won’t let me view the password as I type. Then, quite recently, it began asking me for my old password, as a condition for reactivating my local storage on the Chromebook itself.

I keep a special file with hints about my passwords, in a foreign language and with abbreviations known only to me. But I tried all the old ones I could resurrect, and none worked. So Google gave me a choice of continuing and losing all my local Chromebook storage, or waiting until inspiration about my old password struck.

I could almost hear a voice saying, “That’s a nice bunch of local storage you had there, kid. Too bad you can’t remember the password that we think is your last one, so you’re gonna lose it all. You’d be better off if you’da put all your data in our cloud. Heh, heh!” For this and other reasons, I’ll soon be switching back to Apple for my next laptop, despite Apple’s relentless feature bloat and tendency to make laptop computers work like phones, which they are not.

There are countless similar things that seem less like deliberate pressure to increase the software monopolist’s bottom line and more like deliberate neglect of things that would make customers’ lives much easier but don’t produce much profit. Playing fast and loose with customers’ privacy—especially children’s—probably falls in the category. So do myriad features that would be easy to make easy but tend to be programmed by complexity or confusion engineers. Once or twice I’ve had to send a message directly to the maker or distributor of a product sold on Amazon; despite over sixty years experience with computers, software and the Internet, I found the messaging process so obscure and circuitous that I had to write down the steps, in detail, for a possible next time.

Among examples of this sort of thing are the placements of “sponsored” ads in search results. This happens on Amazon, where providers of goods or services apparently can command higher placement in search results by paying for that privilege. Whereas once the top user-recommended products appeared first on Amazon, now you have to scroll down half a page or more to get to the items most highly recommended by actual users. Several “sponsored” products, with lower user ratings or none at all, often appear first. This makes searching for what you need more complex, annoying and time consuming.

My impression is that all this happened after Jeff Bezos, with his obsessive focus on customer ease and satisfaction, retired from active involvement with Amazon. Thus can the tawdry profit motives of lesser underlings destroy the legacy of a visionary leader who, with his “many to many” communication of product reviews by actual users, broke the age-old sales model of “caveat emptor” (let the buyer beware).

Anyone who’s computer savvy and has worked with most of the big software monopolies has seen countless examples like these. In some universe of corporate-oriented legal interpretation, they may even be lawful. But moral, ethical and user-friendly they are not.

Should legal authorities like the FTC pursue stuff like this, at least when perpetrated by corporate monopolies to which there are few or no viable alternatives? I think so. At the end of the day, modern corporate “morality” treats customers and employees as nothing more than cogs in a profit machine. Despite some pathetic and ineffective countertrends, like the Business Roundtable’s recognition of corporate employees and customers as “stakeholders” a few years ago, business schools and the investment community encourage this trend relentlessly. They give lip service to human values, but in practice only the bottom line counts.

In our modern world, corporations have a far greater and more direct effect on our people and their quality of life (or lack thereof) than government. Corporations make, sell, promote, repair and improve our homes, cars, computers, phones, clothes, food, drugs, kitchenware, appliances, luggage, planes, trains, books, newspapers and all our information sources. So why shouldn’t they be held to a standard that puts people, if not first, at least in contention? And why shouldn’t the people whose human needs they consider include both employees and customers?

I’ll close with two simple anecdotes from my own life. At the beginning of the pandemic, my wife and I relied a lot on restaurant-delivery services to bring food to our door without risk of contagion. Then we read of the cost to restaurants, including fees that take up to 30% of restaurants’ profits, in an already low-margin business. We also read of mistreatment of drivers as expendable peons with no control over their working lives. So we started skipping ordering online and began ordering by telephone and picking up the food ourselves. In that way, we helped maintain our local restaurants’ meager profit margins, plus a human relationship with the owners. (Even so, the local restaurants in our neighborhood were decimated during the pandemic.)

Something similar happened to us with ride-sharing. As far as I can tell, Uber and Lyft are nothing more than elaborate Internet scams to make money by circumventing the labor laws that protect people who drive for a living. The convenience and ubiquity of the Internet helps them ignore or circumvent laws regulating wages and hours and requiring things like health insurance, vacation days, and reasonable schedules of work. By circumventing these laws, the Internet-based firms make more money for their bosses and (occasionally, depending on Internet-based markets) provide lower prices for passengers. But for me, the most visible results were: confusion, extraordinary waits for rides, occasional instances of drivers dropping us at the last minute for higher fares, and cars that ranged from dirty and dilapidated to downright dangerous.

Over the last several years, we’ve established a customer relationship with an Afghan refugee who has a large immigrant family in the US and Canada. He drives his own car and has contacts with other drivers. He (or a colleague he asks) takes us to the airport and picks us up. He has waited patiently for traffic and baggage delivery without charging us extra. He’s reliable and trustworthy, drives reliable and safe cars, and, although a bit more expensive than Uber and Lyft at their cheapest, has never let us down. Isn’t that how a driver-customer relationship should be?

The antitrust and consumer-protection laws that the FTC enforces are, of course, just a small part of the universe of law that Internet monopolies tend to thwart. But enforcing them rigorously would be a good start. No matter how profitable they may be, and no matter how high their share prices might fly, Internet monopolies won’t get us to a more human economy, a more equitable distribution of wealth and accurate information, or a more smoothly functioning society, any more than the railroad, steel and oil monopolies did in their day.

Nearly alone among our high government officials, Lina Khan seems to recognize the threat to consumers’ welfare and autonomy that the big software monopolies and the intended and unintended consequences of their behavior pose. So I await her next move with eager anticipation. I consider her appointment to be one of President Biden’s key achievements in setting our nation’s economy and democracy back on track. Unrestrained corporate power has never been good for Americans or America. I doubt it will be better in the Internet Age.


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