We built our digital philosophy in circles that cherish empowerment, sustainability and accountability. Saying we are unimpressed at the state of the internet today is an understatement. The current hyper-concentration of data and power is in the hands of unethical monopolies. 

In internet economics, a healthy competitive market puts innovation at the service of users, not profits. This does not mean no business model. It means the business model is not built on exploitation of human dignity.

What is making these monopolies toxic?

The value of a digital product is often tied to how you can interact with other people, via that product. To take the example of the invention of telephones - the first telephone was a gem of modernity, but if you were the only one to have one it was useless. The value of phones increased with the penetration of this technology amongst the society. The more people have phones, the more it is useful to have one. This is called a network effect; value rises with the network’s growth. It is the core of social media's success. In addition, changing product can sometimes be a painful journey as it requires learning a new interface and/or having to reformat data (.docx vs .pages for instance). These are called switching costs. The combination of network effects and high switching costs is often the backbone of platforms’ strategy, as it locks-in their users. It is a recipe to become an monopoly.

'Lock-in' put simply: Users are not locked per say, but the amount of work required to change, and the risks of ending up on a tool you are alone on, make the change not worth it.

On unregulated markets, monopolies are usually toxic disease to avoid. Indeed, healthy competition forces competitors to innovate to continuously adapt to users’ needs with efficiency to remain cost effective. 

On the opposite, a monopolistic player will not be incentivised to match needs and will concentrate innovations on profits maximisation. Examples:

• We know that what Facebook users desire the most is improved privacy policies. Yet Facebook made sure to maximise switching costs for individuals wanting to leave. 
• Many monopolistic players are embracing carefully planned anti-competitive behaviour to lock-in their users and act as a gatekeeper. For instance, Amazon faced EU Commission action for using its market place to copy most successful products and promote its own products above competitors’. 
• Apple was found to force its users to use the app store and require app sellers to pay 30% of all they earn, even if Apple had no added value in the production (ex: books, movies). For comparison, bank payment enablers take 1 or 2% of every bank transaction.
• Uber subsidised early ride prices to practice below market prices. That is to say, prices that could not be economically viable. Once most competitors had been killed by these unbeatable prices, and users were locked-in, Uber raised prices. The Uber business model is now leaning on welfare states to support its workers out of poverty. In other words, the Uber business model depends on taxes we pay to ensure their workers can have access to basic services like health. 

New rights for users!

The EU has enacted the Digital Markets Act (DMA) to curb some of the dangers created by gatekeepers. Yet a core fundamental issue remains. To fully free users and competitors, user data must easily be moved from one platform to the other. It is only once data becomes easily controlled and moved around by users that switching costs are removed.

Since 2018 Europeans have gained a new right, the right to data portability. This right should specifically enable individuals to send their data from one service to the other. Yet to do so, competitors need to be able to use data they receive. Which is where monopolies fall short, as they will usually try to send data in a format they created themselves* or that is expensive to use for others. EU law requires data to be sent in a “commonly used” format, to avoid that. We add that such format must rely on open protocols as standards, for all to benefit from it and be safe. Yet today this EU right is not well implemented nor enforced.