The US Senate Intelligence Committee’s grilling of the tech giants Facebook, Google and Twitter in beginning of November told us something we already knew: Russia manipulated the US election results. Only the scale of the effort, which reached roughly half of the US population, was a surprise.
It also told us something that we knew, but had forgotten: industry self-regulation rarely works. From turn – of – the century railroads, through energy markets in the 1990s, to the financial industry in 2007, there are many examples that bear this out. The tech industry is only the latest case in point. The contrition and apologies of the executives who sat in front of the committee did not add up to any significant shift, either in business or philosophy. Silicon Valley, once a force of good, is now a threat to our democracy. Rather, their vague promises to “do better”, and claims that they simply can’t track the complexity of their own algorithms just underscores the need for a cohesive regulatory framework around companies that have become too big to fail – they have become monopoly powers and should ultimately be seen as public utilities.
So how do we create a framework for government oversight of big tech that protects consumer and societal interests, curbs growth dampening monopoly power, and allows us to keep the internet services we depend on?
I would suggest for a focus on three core principles – transparency, simplicity and size. Starting with transparency, the internet giants should be required not only to report politically related advertising as other media do, but also to use both people and algorithms to track hate – driven search results. They currently do a very good job, using AI (Artificial Intelligence), of keeping all pornography off their sites.
This implicitly argues for a re-examination of the legal loopholes in the Communications Decency Act that allow platform companies to eschew responsibility for what is on their sites. And in fact, there has been a significant move in that direction; under pressure, the Internet Association finally announced support by beginning of November for a bipartisan bill to eliminate federal liability protections for websites that knowingly assist, support, or facilitate online sex trafficking, something they had resisted since it would open the door to further tweaks to the act’s liability exemptions.
Transparency for users would also be increased with “opt in” provisions that allow them more control over how their data are used, as it is the case with EU’s General Data Protection Regulation. Ideally, this would be a first step towards a better understanding of how companies themselves value data. As one senior policy maker’s aide pointed out, the monetary value of data currently gets shoe horned into “good-will” on financial statements or, more often, is left out entirely.
Big tech companies should also be required to keep audit logs of the data they feed into their algorithms, and be prepared to explain their algorithms to the public.
Complexity, or the illusion of it, is often used to avoid legitimate public interest questions, such as how propagandists get their messages across or how users are tracked and valued. Companies should help us understand all this by opening the black box and their algorithms. This need not be a competitive disadvantage; research has shown that it is the amount of data plugged into an algorithm, rather than the cleverness of the algorithm itself that is the key here. To the extent that users trust what companies are doing, they may be more willing to part with precious data.
Finally, regulators need to address the size issue. Yes, the services big tech companies offer are great, and mostly free, which allows them to avoid antitrust legislation in the US system, where consumer pricing is considered the measure of power. Yet there are myriad examples of the largest player using their size to steal smaller companies’ ideas and “lowball” them during deal making, or to reshape the regulatory framework to serve their own interests.
It is all too reminiscent of the power held by the 19th century railroad barons. They, too, dominated their economy and society. And they, too, were able to price gauge, drive competitors out of business, and avoid taxation and regulation, largely by buying off politicians.
For a year and a half – and more urgently for much of the last month. I have warned of the growing economic, social and political power held by the five largest American tech companies: Apple, Amazon, Google, Facebook and Microsoft. Because these companies control the world’s most important tech platforms apart from China, including smartphones, app stores and the map of our social relationships, their power is growing closer to that of governments than of mere corporations. Yet ever since I started writing about what I call the Frightful Five, some have mentioned my very premise is off base. I have argued that the company’s size and influence pose a danger. But another argument suggests the opposite – that it’s better to be ruled by a handful of responsive companies capable of bowing to political and legal pressure. In simple words, wouldn’t you rather deal with five horse-size Zucks than 100 duck-size techno forces?
The insatiable appetite of digital technology to alter everything in its path is among the most powerful forces shaping the world today. Given all the ways that tech can go wrong – as we are seeing in the Russian influence scandal – isn’t it better that we can blame, and demand fixes from, a handful of American executives when things do go haywire?
That’s not ridiculous. Over the past few weeks, several scholars said there are good reasons to be sanguine about our new tech overlords. Below, I compiled their best arguments about the bright side of the Five.
The Five can be governed:
Tech is inherently messy. The greatest human inventions tend to change society in ways that are more profound than anyone ever guesses, including the people who created them. This has clearly been true for the technologies we use today, and will be even true for the staff we will get tomorrow. The internet, mobile phones, social networks and artificial intelligence (AI) will make a mess of the status quo and it will be our job, as a society, to decide how to mitigate their downsides.
One benefit of having five giants companies in charge of today’s tech infrastructure is that they provide a convenient focus for addressing those problems.
Consider for a moment Russian propaganda. People have worried about internet’s capacity to faster echo chambers and conspiracy theories almost since it began; in fact, in several cases over the last two decades – including 9/11, the Swift Boat Veterans for Truth and birtherism – the internet did play a key role in the propagation of misinformation. But because those rumors and half-truths spread in a digital media landscape that was not owned and operated by giant companies – one in which information was passed along through Wild West of email, discussion boards and blogs – it was never conceivable to limit that era’s equivalent of fake news.
Today, it suddenly is. Because Facebook, Google, and Twitter play such a central role in modern communication, they can be hauled before Congress and either regulated or shamed into addressing the problems unleashed by the technology they control.
This does not mean they will succeed in fixing every problem their tech creates – and in some causes their fixes may well raise other problems, like questions about their power over freedom of expression. But at least they can try to address the wide variety of externalities posed by tech, which might be impossible for an internet more fragmented by smaller firms. So imagine, when we discover a bigger problem in the future, scale makes that easier to handle. You have got one or two big firms, and they have a lot of public pressure to be a responsible actor.
The Five hate one another’s guts:
Over the past few weeks, many people at large tech companies have repeatedly responded to my questions about danger posed by big tech with a quite funny argument : Yes, they would say, the other tech giants really are worrisome – so why was I including their company in that group?
It was an odd line. As an outsider to these companies, I tend to worry about the collective power of the Five, especially the way they have managed to control the fortunes of innovative start-ups. But none of the Five see themselves as part of a group – each of them worries about the threat posed by start-ups and by the other four giants, which means that none feels it has the luxury to slow down in creating the best new stuff.
This dynamic – where each company competes mightily against the others – suggests some reason for optimism. You can see this in their product road maps as well. None of the Five has slowed down investing intended to further expand its area of control – for instance, Google keeps investing in search, Facebook is still spending heavily to create new social-networking features, and Amazon remains relentless in creating new ways to let people shop.
At the same time, they are all locked in intense battles for new markets and technologies. And not only do they keep creating new tech, but they are coming at it in diverse ways – with different business models, different philosophies and different sets of ethics.
The Five achieved their dominance because they operate in areas that provide huge returns to scale. It was perhaps inevitable that we would see a handful of companies take control of much of the modern tech business. It wasn’t inevitable that these companies would be based and controlled from the United States. And it’s not obvious that will remain the case – the top tech companies of tomorrow might easily be Chinese, or India or Russian or European. But for now, that means companies feel constrained by American laws and values.
Yes, this is jingoistic: The idea that a handful of American tech giants control much of society has helped push regulators internationally to try to limit their power. Americans would almost certainly do the same if foreign companies attempted to take over their economy.
I don’t mean this list to get the Five of the hook. Dealing with their efforts to capture more power over the economy and our society is perhaps the next great question facing America. But this is a complex problem precisely because there are both advantages and disadvantages to their size.