The Underbelly of the Platform - Can We Put a Price on Human Interaction?
As more and more aspects of life become digital, what are we exchanging for greater convenience? Could platform economies that already determine the rules and parameters of our online activity come to shape our social, in-real-life activity as well?
Whether you want to order a taxi, look up a new restaurant or search for a video, chances are you are using some form of digital platform. With the examples of YouTube, Facebook, and Twitter, this is, in most cases, a technology company, through the use of algorithms and big data, that provides an online marketplace, whether that is to purchase and view physical goods or to gain access to a service such as entertainment. The ease with which we use digital platforms is unprecedented in human history; free at the point of use, even allowing content creators, self-made entrepreneurs, and the like to generate income for themselves with much lower barriers to entry. But what are we exchanging for this convenience? When, if ever, does it cross our minds how platforms, in particular social media platforms, shape behavior and norms?
The Market Makers
Digital platforms and the massive investment of capital into them over the last couple of decades are primarily driven by the hope for a new form of value creation – namely, the commercialization of products or services offered by individuals, packaged in an entirely virtual service that connects the supply and demand sides of a marketplace en-masse, creating a central destination to which buyers and sellers alike are drawn to. By creating a big data backend generated through user data on their content preferences, engagement patterns, and so on, the platform ensures that consumers seeking a particular service or product can be matched up with a suitable provider that matches their needs, whether that is based on locational or behavioral data.
All in all, platform economies are consumer data companies – taking the traditional format of selling goods or services from businesses to consumers, platforms streamline and tailor this process with a deep and detailed understanding of how consumers behave. Therefore, they can set the price, the incentives, and the rules of how users interact on their platforms, creating from scratch the parameters and workings of their respective markets.
Selling Social Relations
Are there dangers to this kind of business model? Well, the speed at which platform companies have been able to scale should be an initial warning sign. The fact that platform economies are mostly virtual means that they are able to grow exponentially simply by attracting more users, while companies are responsible for the costs of maintaining and providing the incentives to use the said platform. In this way, there is a power imbalance. Just the act of watching a 5-minute video on YouTube or liking a post on Facebook multiplied by the millions of users informs that platform what the best way to capture your attention is to keep you in the loop as a consumer. Individuals within the platform economy become a commodity, with every digital interaction being converted into a data point to be traded to platform stakeholders for the sake of its own profit and growth.
As such, while monetizing and selling your data may be acceptable to users, it subtly shifts us onto a path of increasing consumerism regardless of consent. The incentives that draw us to partake in the platform economy also keep us there, in the same way that the 'traditional' global market has grown to encompass wide-reaching networks of goods and services which we can no longer live without.
Should We Go Backwards?
We certainly cannot call for the destruction of the platform economy, nor can we completely shut ourselves off from the digital world where most of our interactions now start and finish. Instead, we can look at the core issues of the platform economy - namely, that platforms do not hold the best interests of consumers at heart. How can we redesign platforms to the ones that no longer work for the sake of promoting products and services in excess but actually have an offering that consumers need?
More and more, the idea of quality over quantity seems like an obvious answer. A recent Substack newsletter called Every came to my attention that offers a different model of a media business – a collective operating on its own editorial and financial structure. By funding writers with a cut of subscription revenue and a salary, in addition to a more collaborative writing format that matches industry experts with a corresponding writer, relationships between stakeholders are much closer and more transparent. Writers can establish more intimate relationships with their audience who directly fund their content, platform sponsors are a part of the community that Every builds, and overall what is being sold remains not additional goods and services but the quality of writing itself. Of course, this may only work on a smaller scale where you can establish a tight-knit audience interested in the specific niche you are working in.
On the other end of the spectrum, the open-source movement has drawn some attention calling for greater transparency in commercial digital platforms and products, in particular, the opening up of the big data sets and code that go into creation and maintenance to the general public. Theoretically, this is a step towards a more decentralized Internet where companies don't hold monopolies over digital services and networks.
To sum up, what needs to happen is more suitable regulation of the relationship between platform companies and their audiences. Specifically, in the case of social media platforms, exploitative mechanisms that implicitly push consumers to certain products or behaviors that benefit third parties can be reconfigured to benefit consumers themselves.
Melvyn Tang is a student at the University of Warwick (UK) and Shanghai Jiao Tong University (China), with a background in History, Politics and Sustainable Development. Growing up throughout a unique time in West-China relations, Melvyn is passionate about cultural diversity and the intersections between inequality and global development.
This article is featured in JUSTIN Development Review (JDR) December 2022 Issue