Discover more from BIG by Matt Stoller
Want to Remember Your Password? Pay Up.
Private equity firms continue annoying everyone.
Welcome to BIG, a newsletter on the politics of monopoly power. If you’d like to sign up to receive issues over email, you can do so here.
In 2019, Elliott Management and Francisco Partners bought software provider LogMeIn, which produces a password management tool. Two weeks later, it raised prices on those who are locked into its system.
LastPass has encouraged millions of people to replace weak passwords on retail websites, internet banks and other online services. Instead, the software handles authentication automatically using long, complex passwords that are impossible to guess — or remember.
Two investment firms, Elliott Management and Francisco Partners, acquired the service as part of their $4.3bn buyout of internet software group LogMeIn in September last year.
Now, the app is warning users that they must pay as much as $36 a year if they want access to those cumbersome passwords on all their devices. Those who refuse to pay will have to choose between synching only to their desktop computers, or only to mobile devices such as phones.
Basically they made the product unusable unless customers pay. This is straight extraction, to make it slightly less annoying to pay than to move all your passwords to a different firm’s product. I dislike private equity and don’t think the business model should really exist. It’s not like these firms are investing to make the product better.
Fortunately, in this case, there are competitors to LastPass, so customers can switch if they want. (That is, unless Elliott’s goal is a roll-up in the password management space, though I can’t really see how to erect meaningful barriers to entry here.)
Every one of these PE transactions makes the world ever so slightly worse.