I call this #enshittification, and it is a seemingly inevitable consequence arising from the combination of the ease of changing how a platform allocates value, combined with the nature of a "two sided market," where a platform sits between buyers and sellers, hold each hostage to the other, raking off an ever-larger share of the value that passes between them.

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When a platform starts, it needs users, so it makes itself valuable to users. Think of #Amazon: for many years, it operated at a loss, using its access to the capital markets to subsidize everything you bought. It sold goods below cost *and* shipped them below cost. It operated a clean and useful search. If you searched for a product, Amazon tried its damndest to put it at the top of the search results.

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This was a hell of a good deal for Amazon's customers. Lots of us piled in, and lots of brick-and-mortar retailers withered and died, making it hard to go elsewhere. Amazon sold us ebooks and audiobooks that were permanently locked to its platform with DRM, so that every dollar we spent on media was a dollar we'd have to give up if we deleted Amazon and its apps.

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And Amazon sold us Prime, getting us to pre-pay for a year's worth of shipping. Prime customers start their shopping on Amazon, and 90% of the time, they don't search anywhere else.

That tempted in lots of business customers - Marketplace sellers who turned Amazon into the #EverythingStore it had promised from the beginning. As these sellers piled in, Amazon shifted to subsidizing suppliers. Kindle and Audible creators got generous packages.

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Marketplace sellers reached huge audiences and Amazon took low commissions from them.

This strategy meant that it became progressively harder for shoppers to find things anywhere except Amazon, which meant that they only searched on Amazon, which meant that sellers *had* to sell on Amazon.

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That's when Amazon started to harvest the surplus from its business customers and send it to Amazon's shareholders. Today, Marketplace sellers are handing 45%+ of the sale price to Amazon in junk fees. The company's $31b "advertising" program is really a payola scheme that pits sellers against each other, forcing them to bid on the chance to be at the top of your search.

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Searching Amazon doesn't produce a list of the products that most closely match your search, it brings up a list of products whose sellers have paid the most to be at the top of that search. Those fees are built into the cost you pay for the product, and Amazon's "Most Favored Nation" requirement sellers means that they can't sell more cheaply elsewhere, so Amazon has driven prices at *every* retailer.

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Search Amazon for "cat beds" and the entire first screen is ads, including ads for products Amazon cloned from its own sellers, putting them out of business (third parties have to pay 45% in #JunkFees to Amazon, but Amazon doesn't charge itself these fees). All told, the first five screens of results for "cat bed" are 50% ads.

https://pluralistic.net/2022/11/28/enshittification/#relentless-payola

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This is enshittification: surpluses are first directed to users; then, once they're locked in, surpluses go to suppliers; then once *they're* locked in, the surplus is handed to shareholders and the platform becomes a useless pile of shit. From mobile app stores to Steam, from Facebook to Twitter, this is the enshittification lifecycle.

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