Ownership in the Digital Economy: From “Buy” to “License”
The change in the way that we buy and consume music, movies and books from physical objects to digital file downloads and streaming has been widely debated in recent years. These may have been the most observable changes, buy they are just one aspects of a much bigger shift that has given corporations more control over the products that we as consumers buy, even after the transaction is finalized and we have brought the products home. This is largely caused by changes in the computer systems that control many of the products we buy, such as cars, mobile phones and coffee makers, and these changes are harder to observe than the digitalization of physical objects. But let’s discuss the latter first. Most consumers that click on the “buy-button” online assumes that when they purchase the product they can keep it forever, but this assumption is being altered by the shift from consuming physical objects to digital files and streaming. Music streaming services such as Spotify are constantly changing which songs are available, so even if you have your own Spotify library with tons of playlist, many of the songs may have disappeared the next time you want to listen to it. Another example of how consumers loose control over products they buy is Amazons remote deletion of the book “1984” by Georg Orwell on peoples Kindle . It illustrates that the whole concept of “buying” is changing, and in fact is becoming more similar to licensing or leasing in the sense that you are not guaranteed to keep it forever, since the seller maintains control.
Any Colour You Like
While the ownership of digital, intangible goods is one thing, most people assume that when they buy a physical product, e.g. a car or a coffee machine, they also buy the right to control the product and can choose to do whatever they want with it. In the digital economy this presumption is challenged, and in many cases no longer holds true. Coffee machines that shut down when consumers use the “wrong” brand of coffee (from the perspective of the seller) is just one of many examples. People may perceive that they have a choice when they buy the product and may be surprised to learn that they de facto don’t, and that there is no room for choosing your own coffee. Another example is Tesla and its production of cars with self-driving capabilities. People that buy the car model with these capabilities in the future will not be allowed to use it for Uber or similar ride-sharing services. The following was stated on the Tesla webpage: “Please note also that using a self-driving Tesla for car sharing and ride hailing for friends and family is fine, but doing so for revenue purposes will only be permissible on the Tesla Network, details of which will be released next year”.
There are similar cases in the mobile industry, where Samsung customers that have not yet returned their Samsung Galaxy Note 7, are facing remote destruction of their devices . Although such “kills” can be justified due to the overheating risk on these devices, it is a bit disturbing to know that mobile companies control private mobile devices to such an extreme extent.
Implications for the Nature of Ownership
When the company keeps control over the product after they sell to the consumers, the whole concept of ownership becomes ambiguous, and what you get for you money becomes less transparent. The uncertainty for consumers about what you buy and under which terms you buy it has largely made the digital economy a seller’s market. The terms and conditions and licensing agreements that follow digital buys tend to be exhausting, and it has been calculated that if the average consumer were to read the terms and conditions of all digital buys and services consumed, it would take each person 2000 hours per year to get through all of them. Another pressing issue is the risk of potential price discrimination. Sellers have access to real-time information about consumers concerning everything from buying habits to emotional state, hence they can calculate just how much they are willing to pay for a certain product or service at all times.
Making it Work
Ownership and property rights are a prerequisite for modern capitalist economies, and it establish a foundation for the market exchange of money, labour and capital to take place. The digital economy has weakened the power granted by property rights for consumers, while it simultaneously has given business more and more control over the value produced. This development should not be permitted to continue in the same direction. The current challenge is therefore to find solutions that protect consumers and reform related legal framework and regulations that in many cases haven’t kept up with developments. Quite the opposite, in fact, the combination of law and technology tend to work against consumers, as strict Intellectual Property regulations and technological locks limits consumers control over acquired intangible products. Still, of course we don’t have to own every product that we consume, but in those cases were it makes sense to rent, it must be communicated that your “buy” is temporary. The word “buy” could be replaced by more accurate vocabulary that covers the new reality: such as “license”, “borrow” or “rent”. The most important thing is that it is articulated in a simple matter, and not through a terms and condition document with 19.000 pages.
Image via Flickr
 Perrzankowski A. and Schultz J., The End of Ownership: Personal Property in the Digital Economy”, 16. December 2016. MIT Press.
 Johnson B. ”Amazon Kindle users surprised by ‘Big Brother’ move”. 17. July 2009, https://www.theguardian.com/technology/2009/jul/17/amazon-kindle-1984.
 “Tesla won’t let you use your self-driving Model X to drive for Uber”. The Verge. 10. October 2016, https://www.theverge.com/2016/10/20/13346396/tesla-self-driving-ride-sharing-uber-lyft.
 “Samsung is Probably Going to Remotely Kill Remaining Galaxy Note 7 Devices”. Droid Life. 8. December 2016: http://www.droid-life.com/2016/12/08/samsung-probably-going-remotely-kill-remaining-galaxy-note-7-devices/.
 “The end of ownership, iFixit and real-time encryption”. ABC, Future Tense – Podcast, http://www.abc.net.au/radionational/programs/futuretense/the-end-of-ownership,-ifixit-and-real-time-encryption/8396898.