On Digital Monopolies

A significant tendency to take into account when analyzing contemporary Internet developments is the one of monopoly creation. As McChesney  (2013 130) points out, it is indeed “supremely ironic that the Internet, the much-ballyhooed champion of increased consumer power and cutthroat competition, has become one of the greatest generators of monopoly in economic history”. Looking at the largest U.S. corporations in terms of market value, in 2014 three out of the top four companies are Internet giants: (1) Apple, (3) Google,  (4) Microsoft (number two in market value being the oil-giant Exxon Mobil).1

That is to say that the “Internet monopolists sit at the commanding heights of U.S. and world capitalism” (ibid.); reasons for this include the following:

  1. Network effects, referring to the increased gains experienced when a single resource or service is used by many, i.e. the capturing of customers creates demand-side economies of scale online. “Monopolies are actually even more likely in highly networked markets like the online world. The dark side of network effects is that rich nodes get richer”, resulting in winner-takes-it-all markets (Anderson 2010 online).
  2. The importance of technical standards, necessary for an effective and wide-spread use of any communication technology. The public interest would be to have such standards as open as possible, but in reality, the firms developing the technologies that eventually become the industry standards are off for a head start, e.g. Microsoft with Windows (McChesney 2013).
  3. The use of patents, providing temporarily government protection of a monopoly license as a reward for innovation, seeing an explosion of prominence since the digital era (e.g., Microsoft took a few hundred patent in 2002 and 2500 in 2010) (ibid.).
  4. Copyright law, acting in a similar manner and a discussion by itself, but “the belief that stronger intellectual property protection inevitably leads to more innovation appears broadly wrong”, acknowledging that innovation is a cumulative process (Bilton 2012 online).

The profitability of successful internet firms, explained by the factors above, rests elementarily on “establishing proprietary systems for which they control access and the terms of the relationship” (McChesney 2013 135). McChesney further draws the comparison to imagine the Internet as a planet where each monopoly is like a continent, resembling their monopoly base camp. Each empire then wants to be as self-contained as possible, drawing consumers into its world by offering an array of services and products, essentially to “gather extensive data in its cloud to be mined for prospective advertisers” (ibid. 140).

Mergers and acquisitions of smaller tech companies by big digital giants to increase their monopoly power and consequently ‘expand their empires’ are the state of the art and common practice online. A recent is the $19 billion takeover of the mobile messaging service WhatsApp with its more than 400 million users by Facebook, Inc.2

The value for Facebook in spending such a huge sum, $4 billion in cash and the rest in stocks, is hardly justified by the additional functionality; Facebook itself offers exactly the same comfort of exchanging messages and pictures already. Rather, it is in expanding its demographic user base on the background that Facebook itself has seen a drop in younger users recently, a group where WhatsApp is especially prominent, and, most importantly, Facebook is getting one potential future competitor from the table. As acknowledged by The Economist, one of the benefits of being a cash-flush giant is being “rich enough to buy up potential rivals”.3

Facebook pocketed $16 billion in cash resulting from its IPO in May 2012 and managed to do nearly two dozen acquisitions since 2010, of which the largest until now was the takeover of Instagram for $1 billion.4

This and countless other examples prove McChesney (2013 137) right when claiming that “today, the Internet as a social medium and information system is the domain of a handful of colossal firms.”

The question you should ask yourself is whether this development is desirable for a communication medium that has ever increasing significance and influence on personal lives as well as on society at a whole. If the answer is no, then we should probably do something about it. Yea, something.

References

Anderson, C., 2010. The Web Is Dead. Long Live the Internet. Wired, (18), pp.122–127. Available at: http://www.wired.com/magazine/2010/08/ff_webrip/all/.

Bilton, N., 2012. Disruptions: Innovations Snuffed Out by Craigslist. The New York Times. Available at: http://bits.blogs.nytimes.com/2012/07/29/when-craigslist-blocks-innovations-disruptions/.

McChesney, R.W., 2013. Digital Disconnect, New York: The New Press.

Footnotes

  1. U.S. Commerce – Stock Market Capitalization of the 50 Largest American Companies”. List usually subject to fluctuations, depending on the current stock price of the company.
  2. WhatsApp deal – Facebook snaps up messaging service in their largest acquisition,” The Guardian, February 20th, 2014.
  3. A Fistful of Dollars,The Economist, February 4th 2012.
  4. Facebook Buys Instagram for $1 Billion,” The New York Times, April 9th 2012.

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Open Access Journals and Capitalism: An Interview with Christian Fuchs

Here is the transcript of an interview I conducted with Professor Christian Fuchs from the University of Westminster for a recent course paper. This was originally posted here: http://fuchs.uti.at/901/

QPublishing articles online requires server space and labour power. Since your journal tripleC: Communication, Capitalism & Critique does not charge readers nor authors, how exactly are those costs covered?

Christian:tripleC has since 2003 when it was founded been a no-budget and no-profit journal operated by volunary work time donations of the editorial team. We do not charge authors or readers, which is a big difference to other models and makes the publishing process fair and democratic. There is a Creative Commons Attribution-NonCommercial-NoDerivs License, which means that articles can be reproduced when naming the source and author, they can be reused for non-commercial purposes without editing. I consider tripleC together with other similar journals an important innovation in the field of publishing in Media and Communication Studies.

Q: Seen as an alternative media organization, is there a hierarchy leadership required by a few individuals? What about the challenge of motivating employees to work for an OA journal instead of for a conventional, possibly better-known conventional publisher, recognizing that academics most often get a steady income from their universities and are expected to peer-review for journals as a ‘gift’ to the scientific community?

Christian: I am not sure if I fully understand what you mean by employees working… Employees are paid a wage for their activiy, in this sense tripleC has no employees. Everyone who is involved in the project does so because s/he is convinced that it is an important project, that academic knowledge should be no commodity and that we want to challenge the capitalist business of academic publishing, where large publishing houses exploit the free labour of academics, dispossess and commodify the resulting knowledge and tend to make profit rates between 20-60% per year, a value that is hardly achieved in any other industries (see the article by Wilhelm Peekhaus in tripleC’s Marx special issue for a good analysis).

The difference is that big publishers have a big team of hired (and exploited) employees for copyediting, language-correction, layout, technology, etc. tripleC does not have this. We have voluntary editorial assistants who handle the final corrections and upload. Increasingly we have tried to get the authors’ help by asking them to layout the articles and in some cases to look for a proof-reader, which seems to be fair because the resulting articles are available to anyone without payment, which makes a big difference to the corporate publishers as the reach is wider, the publication process is much faster, there are no copyrights, but Creative Commons, and there are practically no word count limits. tripleC encourages in contrast to most other journals (also online journals!) long articles because we are convinced that good theory needs space. Many other journals are neither interested in theory nor in critical theory. Not everything can be expressed in the standard length of 8 000 words, which is a relic of the age of print because paper is rather expensive.

Corporate publishers have large capital, which gives them advantages in the editing process. In 2012, I have myself corrected the language of hundreds of pages in tripleC, if the English is poor this includes rewriting entire sentences. You can imagine that this takes many hours well beyond a 40 hour working week. What I want to say by this is that non-profit alternative media such as non-profit Open Access Journals are in capitalism structurally discriminated because they have no capital and do not want to make monetary profits. This is a contradiction that is immanent in capitalism: alternative media are more democratic, but are often based on working long hours without pay.

Non-profit Open Access Journals are very important for democratizing and decommodifying academic publishing. We need public funding schemes for non-profit Open Access Journals at the EU level. In Sweden, Vetenskapsrådet has introduced a comparable model. Just like we have Research Councils, we need European-wide Open Access Councils that have calls, where editors submit proposal for journal funding that are peer-reviewed and where in the case of a positive result public funding is provided for a specific time period. The stipulation should be that by this money editorial assistants are employed, who take care of language correction, layout, copyediting, promoting the journal in academic communities, etc. It would create an entire new job profile for editorial assistants in the sense that this job could be transformed into a non-profit public service job category. Also university libraries could get a new role and help organizing the publication of Open Access Journals s in their universities.

There are a lot of reforms of academic publishing that are urgently needed.

Q: Amongst academics, consensus seems to be found that OA publishing is the future of academic publishing. What is your opinion on that matter and, speculating about time frames, when will OA publishing be ‘state-of-the-art’ (if so)? Do OA articles, by being freely available to the general public possess disruptive potential against the dominant media logic that influences (known as the process of mediatization) society to accept and embed values and norms generated through the dominant media institutions?

Christian: I do not want to speculate about anything that lies in the future because this is unscientific.

Open access publishing is discussed a lot, it is a very hot issue in academic politics. And each and every scholar is concerned by it.

The question is not if Open Access will be the future of academic publishing, without a doubt it will be, but which model of Open Access will be the future, as there is not just one, but several ones.
In the so-called green model of OAJ corporate publishers release articles after 6-12 months for OA publishing.
In the gold model, articles are immediately published online and there are author fees. The commodity logic is just transfered from readers to authors, who pay for getting published!

In the diamond model, articles are published open access without the commodity logic. These journals are non-profit, non-commerical and non-commodified and make the articles available based on a non-commercial Creative Commons License or a similar license.

Regular corporate academic publishing a) exploits the free labour of academics, b) commodifies academic knowledge, c) is injust and unfair because those who cannot pay or are not part of a rich university do not get access, d) is racist and imperialist because poor readers and universities in developing countries are excluded from access.
The “gold model” of OAJ results in new capital accumulation models. My experience is that those who run such models tend to undermine peer-review: they tend to publish most articles just for the profit-sake. The author fees are often very high and when you are not rich or not part of a rich unversity or do not have large research projects, then you are excluded from publishing. This model creates a two-class structure in publishing, it is an expression of class divisions in academia. It is also again racist and imperialist because scholars in developing countries tend to be excluded.

The only model that I consider appropriate, democratic, fair and just is the diamond model of Open Access Journals. If you ask me, then this should be the future of academic publishing. The model can also be applied to academic book publishing and there are already a few publishers around focusing on this model. But of course this model that strengthens the academic public sphere and democratic access to knowledge needs a support infrastructure, it is very important to look at political economy here and not to be idealistic: If this model should be the future – which is an at the moment undecided, political and normative question – then diamond model journals need public funding and general funding schemes need to be implemented. This means that public money needs to be dedicated to this task. If this is not then, then academic publishing will remain as undemocratic and closed as it is today. There is a potential for change, we’ll see if it will be realized or not.

Q: A few words on influence: In your field, how much of the discourse is shaped by toll-access journals and how much by OA journals?

Christian: I do not know, I have not quantified this, but somebody should definitely make an analysis of it.

QDo you think it is valid to talk about a “mediatization of education”, referring to the form of direct mediatization as discussed by Stig Hjarvard, being the convertion of a formerly non-mediated activity to a mediated form, i.e. the activity is performed through the interaction with a medium – the medium is the Internet?

Christian: I think the category of mediatization and the academic discourse that has developed about it in Media and Communication Studies is misleading. All human activity is always mediatized. The mediatization discourse creates the impression that mediatization is something new and an evolutionary process and overlooks that mediatization is a fundamental anthropological constant of any society. The air is a medium of face to face communication just like networked computing is a medium of online information, communication and collaboration. Media imply information and communication and the other way round. It is therfore a mistake to separate Media Studies from Communication Studies. We need an alternative discourse to mediatization theory. This theory is neither helpfull nor critical.

Q: Is there a (subjectively-felt) shift towards Open Access publishing amongst academics in your field or do scholars continue to submit their work to conventional publishers? Is there a generational factor motivating the decision?

Christian: I think somebody should conduct research about this question.

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