Aug 8, 2017

Tech is at war with the world


Sam Jayne / Axios

America's largely romantic view of its tech giants — Facebook, Google, Apple, Amazon, etc. —is turning abruptly into harsh scrutiny. Silicon Valley suddenly faces a much more intrusive hand from Washington, based on rapidly accumulating vulnerabilities in nine big areas listed below.

Be smart: Today's conditions — populist rage in the country, combined with growing suspicion of corporate behemoths — closely mirror those that gave us Teddy Roosevelt's trust-busting of oil and steel at the turn of the 1900s, and the progressive reforms that ushered in today's antitrust protections.

  1. Content in a 50-50 nation: After the election, the left was furious about the spread of fake news online, which is sure to get worse. And a lot of conservatives worry about the tech giants injecting liberal bias into their handling of political comments and stories.
  2. Privacy controversies.
  3. Sexism, an issue freshly ignited with this week's eruption at Google over an engineer's manifesto blaming biology for the shortage of women engineers, and accusing the company of a "politically correct monoculture." The engineer said last night that he'd 'been fired for ""perpetuating gender stereotypes."
  4. Job-killing robots, automation and artificial intelligence.
  5. Paranoia by the companies about a bill by Sen. Rob Portman (R-Ohio) to constrain human trafficking, because it gives victims and state attorneys general new tools against social networks and other online sources of exploitive content.
  6. Backlash over the mounting data trove about us: In many cases, we aren't the customer — we're the product.
  7. Contribution to income inequality.
  8. Tax avoidance by shifting revenue overseas.
  9. Astonishing concentration of wealth and power.

Big tech, already facing billions in fines from European regulators, is an increasing target of both U.S. political parties:

  • Steve Bannon and his nationalist acolytes in the White House are eager to take on the tech companies as selfish and monopolistic, and top GOP staffers are warning Google, Facebook and Amazon not to get too aggressive with their net-neutrality advocacy.
  • Bannon's not the only conservative floating concerns about the power of these companies. Sen. Ted Cruz (R-Texas) told Axios' David McCabe just before the Senate left on recess: "I certainly have concerns about media companies and large tech companies putting their thumb on the scales and skewing political and public discourse."
  • Rep. Marsha Blackburn (R-Tenn.) introduced a privacy bill this year that would put the same restrictions on Google and Facebook as it would on Comcast, Verizon and other internet providers.
  • On the other side, Sen. Elizabeth Warren (D-Mass.) called in June for a revival of antitrust enforcement.
  • Last month, House and Senate Democrats singled out corporate monopolies as a key target of the party's new "better deal" economic platform.
  • Lobbyist Bruce Mehlman, executive director of the Technology CEO Council, a business consortium, said: "No industry in the history of the world has gotten to this level of ascendancy not run into political crosswinds."
  • Another top lobbyist told me: "The AI [artificial intelligence] issue is the big monster in the room — only a handful of members of Congress even understand what it means. It sounds sexy and scary at the same time. That is probably where Congress is going to wake up shortly and get heavily involved."
  • One problem for pols licking their chops: Most consumers love and depend on the products. And they like using the "utility" (Facebook, Google, etc.) for free.

When I showed a draft of this item to my tech colleagues at Axios, they pointed out that many of the giants have been trying to recalibrate their Washington operations for the Trump era:

  • Facebook hired a former top Senate aide to Attorney General Jeff Sessions. Google, with long Democratic ties, did "an about-face" to woo Republicans after the election, the N.Y. Times wrote. Amazon hired a lobbyist with close Trump ties, Brian Ballard.
  • A key executive at one of the targeted companies told me: "It's the attitude and the mood of the country, underscored by the election. It's hit in so many different directions, including the institutions of news and the institutions of higher learning."
Go deeper