TL;DR
Big companies no longer win by pleasing customers; they win by raising the cost of leaving and turning customers into hostages, which stifles competition, innovation, and jobs.
Cory Doctorow writes about fresh research: today's big companies don't win by making customers happy—they win by making it impossible for customers to leave.
Customers as hostages, not kings
Over the last 20 years, the average customer-company relationship stretched from 7.5 years to 11.5 years. It sounds like loyalty, but much of it is lock-in through contracts, bundled subscriptions, and data-transfer hurdles.
Take Sirius XM: after a court killed the 'click to cancel' rule, executives celebrated with shareholders, saying the outcome is now better for them. Meaning: they profit from customers who can't find the cancel button.
Insurance firm eHealth does the same, forcing elderly patients to manually enter lists of medications and doctors, with no export option—switch to another insurer? Re-enter everything over the phone.
The tighter the lock, the fatter the profit
Researchers combed through 9,500 merger filings and found executives openly boasting about raising 'switching costs' and 'ecosystem lock-in'.
Consequences are direct: customers trapped, companies raise prices and cut quality; margins soar, crushing rivals; new entrants see no way in and don't invest.
Worse, such sectors create fewer jobs, wages fall, and innovation slows—patents drop and become more trivial.
Doctorow concludes with Lily Tomlin's old punchline: 'We don't care. We don't have to. We're the phone company.' Except now, the whole country is the phone company.
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