Did you know in the complex world of modern capitalism, where technology giants reign supreme, from Google and Apple to Amazon and Tencent, these internet behemoths have reshaped the economic landscape, transforming capitalism as we know it.  Philipp Staab in Markets and Power in Digital Capitalism, takes us on a thought-provoking journey through the virtual realm, exploring how digital surveillance and evaluation practices have infiltrated every aspect of our lives.

Big Tech companies operate a corporate monopoly with government blessing, a “privatised mercantilism” operating through “proprietary markets”.  Billions of users of digital technology greatly value often free services they get. Few people would disagree about the negative aspects of  Big Tech, including their immense power but it undermines the credibility of some of the critics to ignore the positive aspects.

According to Staab, professor of sociology at Berlin’s Humboldt University, what sets digital capitalism apart, is the rise of proprietary markets. No longer focused on producing goods and selling them for profit, today’s meta-platforms thrive by owning and controlling the very markets in which they operate. The power of their dynamics market monopolies and the future of economic systems, after a sharp insight and meticulous research, Staab sheds light on the intricate working of our digitised economy. Staab’s compelling analysis challenges us to comfort the realities of surveillance capitalism and the urgent need to address the inequalities it perpetuates.

In Port Sunlight, Bournville, or Saltaire, and the concerns of their founders for the wellbeing of the workers is manifest in the fabric of these British model towns developed by enlightened entrepreneurs, paying workers meagre amounts in the company money that could only be spend at costly company stores. In today’s capitalist economies, focusing on the extensive reach and power of Big Tech companies , and looks back in time to find apt comparisons. The Cadbury family who developed model town, as Staab offers us a different earlier parallel, the colonising business of the age of empire, such as the East India Company.

Apple’s locking consumers and locking out other providers is at the heart of the new Department of Justice anti-trust case against the tech giant.

One of the main weapon employed by Big Tech is competition policy to limit their market power, as they are not primary producers operating in markets but markets in which producers operate. Digital platforms have become the field on which many producers in the economy themselves innovate and compete. Big Tech firms have expanded their areas of operation from the initial offer bookselling for Amazon, making computers for Apple to provide an ever-increasing range of services.

The combination of valued amenities with the exercise of control is what makes Big Tech’s walled gardens-  like Google or Apple of a world of operating systems, internet search, email, payment services, maps and so on – as reminiscent of company towns as of the East India Company. They are increasingly building their own infrastructure of data centres and undersea cables. The ambition is that both sides of the market, producers and consumers, find everything they might need as an economic agent within the walls- the information, the mans of payment, the fulfilment.  The individual’s chosen Big Tech can provide income, while filling leisure and consumption time too- making it even harder to leave. The digital economy’s potential for innovation and entrepreneurship inside the walled gardens as the only way a start-up can grow is a acquisition by Big Tech. Amazon’s recent decision to drop its bid for iRobot, maker of the Roman Vacuum cleaner, in the face of likely EU and US vetoes. Old-style competition thinking would not have seen domestic cleaning robots as being in the same market as online retail and cloud computing. New style competition policy see this has allowed digital companies to build market power and aims to stop such acquisitions. 

Staab argues the economy is characterised by “superabundance” and saturated demand, so that the platforms need to profit by making it too hard for users to switch.

Markets and Power in Digital Capitalism by Philipp Staab, Manchester University Press £20, 184 pages.