IEEE Technology and Society Magazine - March 2020 - 6

the operating system (Windows), but
entangled the browser code with the
operating system kernel [4].)
The second opportunity was to
create a market segment of one.
Electronic systems enable retail
organizations to adopt different
sales and marketing approaches
using electronic commerce; i.e., rather than supply and demand, electronic systems enable companies to
detect what a customer wants, and
then to customize a product or service so that it fits an individual need.
This is referred to in the literature
of Customer-Relationship Management (CRM) as mass customization
or accelerated 1-1 (one-to-one) [5].
Moreover, electronic systems make it
much easier for marketers not just to
target specific customer segments,
but to target individual customers
(hence a segment of one).
Despite the size of the market
(i.e. everyone connected), the Internet actually makes it easier to create
segments of one, for four reasons.
Firstly, it is much more straightforward to capture, transmit, identify,
and store detailed behavioral patterns. Secondly, the paucity of gatekeepers at the application layer (as a
consequence of the network effect
concentrating gatekeeper functionality into just a few platforms [6])
makes it easier to link to other financial, demographic, or preference
data (extra indicators of lifestyle and
individual profile). Thirdly, as more
and more activity transitions online,
it becomes easier to capture more
and more data at multiple user ("customer") contact points. Finally, after
personal data that is given away
freely (but piecemeal) is integrated
(but unknowingly), it is relatively
straightforward to apply well-known
statistical techniques (e.g., logarithmic regression) in order to almost
uniquely identify every individual - and so data is converted into a
highly valuable commodity.

6

dient, combined lock-in and loyalty
to create a grave, and perhaps unexpected, consequence.
The extra ingredient is psychology; and the unexpected consequence is what might be called
digital dependence.
In many areas of human endeavor, the Internet has been combined
with psychological manipulation,
not just to create and aggregate millions of individual revenue streams,
but to ensure those streams are predominantly one way. Furthermore,
this is more than just the use of
sales techniques like pre-suasion
[9]. For this is no mutually beneficial
loyalty relationship, nor a mutually
supportive trust relationship: this
is full-on exploitation of a dependency relationship.
In a brutal exposé of the gambling
industry, Dow-Schüll [10] uncovers
the various psychological manipulations that casinos and bookmakers
use to entice, hook, and then rinse
their clients (punters). Electronic systems make these manipulations even
easier. For example, in the U.K., Fixed
Odds Betting Terminals (FOBT, such
as slot machines) legislation decreed
that a fixed percentage of the money
gambled had to be returned as winnings. However, while the chances
of winning were fixed, the chances
of nearly winning were not. Punters
would then find themselves "nearly
winning" much more often than if the
slots were completely random. But
not at all by chance, nearly winning
creates enough of a dopamine hit to
encourage the punter to play again
(the so-called "near miss" effect [11]).
Online gambling makes the process
easier, more pervasive and more
immediate - indeed it satisfies all
the requirements of convenience
[12] - and its consequences, in the
form of self-destructive behavior4

Therefore, one consequence of
the confluence of these forces -
customer lock-in, segments of one,
and unprecedented data personalisation - is that it has enabled
Internet users to be atomized into
individual revenue streams. This has
enabled application layer gatekeepers2 to build "mega-platforms" that
eschew messy social relations like
trust and loyalty, which are somewhat contingent on the consumer,
and that instead effectively unify
three "classical" business models:
brokerage - create a market
place (or online, a platform)
to connect buyers and sellers;
charge commission on each
transaction;
■ razor and blades - offering one
product cheaply or even at a
loss, in order to increase sales
of a second product that may be
dependent, complementary, or,
in some cases, essential3; and
■ lottery - taking a small amount
of money from a lot of people creates a lot of money; although in
this case, the "ticket" is advertising: billions of adverts are pushed
every day, even at micro-cents per
ad, this is "a lot of money."
■

While the emergence of Internet gatekeepers has created a few
fabulously wealthy individuals (with
all the implications that has for societies with vastly asymmetric and
unequal income distributions [7]),
and some unscrupulously ruthless
assaults on democratic practices
and processes (see, for example,
the Cambridge Analytica scandal
[8]), these mega-platforms have,
with the addition of one extra ingre2

The FANGTUM Menace (Facebook, Amazon/
Apple, Netflix, Google, Twitter, Uber, Microsoft).
3
"Give them the razor, sell them the blades" is
attributed to Gillette in 1901, although the business model pre-dates this expression. Its computer sales equivalent could equally be "give
them the printer, sell them the ink."

IEEE TECHNOLOGY AND SOCIETY MAGAZINE

4

Or as Robbins might put it: the destruction of
the human host by a technological parasite.

∕

MARCH 2020
IEEE Technology and Society Magazine - March 2020

Table of Contents for the Digital Edition of IEEE Technology and Society Magazine - March 2020
