Don't Be Evil
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He’s right to be fearful. China has its own FAANGs, known as the “BATs”—Baidu, Alibaba, and Tencent—that routinely monitor the Chinese people in “smart cities,” a deceptively innocent moniker for 24/7 surveillance areas that are wired up with sensors (in fact, Soros gave his 2019 Davos speech on the dangers posed by the Chinese surveillance state).16 And the technology that powers these cities, it’s worth noting, is produced and installed not only by Chinese firms such as Huawei, but also by American companies like Cisco. The resulting information is, of course, part of the Chinese government’s own efforts to move ahead in areas like artificial intelligence that depend on massive amounts of data, or used in the Middle Kingdom’s creepy system of “social credits,” in which citizens are monitored and given scores that can influence everything from their ability to get loans to where they can live. What isn’t garnered from Chinese companies has been taken via partnerships with companies like Facebook (which was, in 2018, revealed to be allowing Huawei and other Chinese firms access to users’ nonpublic data).17
All of which makes it particularly rich that some Big Tech firms have responded to the growing public concern about privacy and anticompetitive business practices by playing to a long-standing American fear: It’s us versus China. Companies like Google and Facebook are increasingly trying to portray themselves to regulators and politicians as national champions, fighting to preserve America’s first-place standing in a video-game-like, winner-take-all battle for the future against the evil Middle Kingdom. In the spring of 2018, when Mark Zuckerberg was grilled in front of the U.S. Senate about his company’s involvement in election manipulation, an Associated Press reporter managed to take a picture of Zuckerberg’s notes, which revealed that if he was asked about Facebook’s monopoly power, he had planned to answer that if the company were broken up, America would be at a competitive disadvantage against Chinese tech giants.
As congressional staffers and politicos in Washington have told me, Google has played the national security card, too, quietly using the “U.S. versus China” argument to push back against proposed antitrust action. Yet Google also has a research facility in Beijing, and has contemplated starting a censored version of its search engine to comply with local rules (something that has been put “on hold,” as one PR representative put it to me, following an internal revolt among its own engineers, as well as political pushback from the White House and Congress).18
Apple doesn’t seem to have many qualms about China’s “local rules,” either. The company may have been protective of user data in the United States, refusing to help the FBI break in to a locked iPhone during investigations of the 2015 San Bernardino terrorist attack, but in China, things are different. When Beijing forced the company to move all of its iCloud data centers for Chinese customers to the mainland, where they would be run by a local company that doesn’t need to comply with U.S. laws about data protection, Apple quickly acquiesced, showing that there are limits to its philosophy of preserving civil liberties when there are true threats to its business model in key markets.19 Even Netflix, which is in some ways the Teflon FAANG, one that comes in for less criticism because of a subscription business model focused on less sensitive data about our entertainment preferences, has bowed to foreign censors. In early January 2019, it emerged that Netflix had pulled an episode of its popular comedy show Patriot Act in Saudi Arabia, after government officials complained about one of the actors on the show criticizing Crown Prince Mohammed bin Salman for his role in the murder of Saudi dissident Jamal Khashoggi and for the Saudi war atrocities in Yemen.20
Meanwhile, Big Tech is taking on the role of Big Brother right here in the United States, working with local, state, and national authorities to create what is starting to look a lot like a surveillance nation. Amazon sells facial recognition technology to the police. Palantir, the big data firm cofounded by PayPal entrepreneur Peter Thiel, works with the LAPD to target citizens in an alarming manner that might have been drawn from the dystopian thriller Minority Report.21,22 What else that data might be used for is anyone’s guess; the clandestine nature of it all makes it nearly impossible to track. But the result is that, little by little, American democracy has ceded a bit more ground to Big Tech.
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REGULATORS ARE FINALLY beginning to turn their attention to these issues. In the summer of 2019, as this book goes to press, Google, Facebook, Amazon, and Apple are being investigated by the Department of Justice and the Federal Trade Commission. The House of Representatives antitrust subcommittee is taking action, too, with plans for months of hearings on Big Tech.23 But I doubt that the problems will be resolved in time for the 2020 elections—if at all. Despite their professed (and politicized) outrage about Google and Facebook allegedly manipulating their algorithms in favor of liberal politicians, most Republicans are reluctant to touch the issue in a serious way, because to do so would question the legitimacy of the Trump presidency, given the Russian election meddling on his behalf via the same platforms.
Liberals, on the other hand, are divided in their attitudes toward Big Tech. The corporate wing of the party, made up of representatives such as Senator Chuck Schumer of New York, believes in “self-regulation” for Silicon Valley, just as he does for the big banks of his home state. It’s telling that Schumer was one of the politicians Facebook tapped in its efforts to limit the fallout over its involvement in election manipulation; and Schumer was only too happy to comply, advising colleagues like the prominent Facebook critic Senator Mark Warner to tone down their criticism of the company (coincidentally or not, Schumer’s daughter works at Facebook).24 The progressive wing is more inclined to take on Silicon Valley (as are, it should be said, some free-market conservatives who don’t ally with Trump). And a number of 2020 Democratic candidates have made it a key platform issue. But making changes to the industry will be complicated and require a retooling of many diverse rules and regulations that are supported (or opposed) by a jumble of disparate interest groups.
Meanwhile, the titans of Big Tech—who are often accused of being disproportionately liberal (they are really more libertarian)—are busy throwing support to whichever party will best serve their interests. Former Google CEO Eric Schmidt, for example, gives to Democrats and Republicans, is friendly with the Trump administration, and sat on the Department of Defense Innovation Board under both the Obama and Trump presidencies. Schmidt was also a key adviser in digital efforts for both the Obama and Hillary Clinton campaigns, using Google’s might to help the former get elected, and exerting policy influence afterward that is worrisome, to say the least.25
While this obviously isn’t problematic in the same way that allowing the Trump campaign to spread racist dog whistles and fake news during the 2016 elections was, it underscores the point that these companies hold undue influence over our political system as a whole, in ways that undermine public trust.26 Schmidt is certainly not alone in playing both sides of the political fence. Take a look at the first meeting of Silicon Valley’s tech titans with Donald Trump in 2017, and you’ll see Sheryl Sandberg, Tim Cook, and many other avowed Democrats leaning in to the president, literally. Despite Amazon CEO Jeff Bezos’s ownership of The Washington Post, which is often critical of the president, Amazon pushed its facial recognition technology to ICE, the U.S. Department of Homeland Security’s Immigration and Customs Enforcement division—the very one that was keeping children in cages at the Mexican border.27
Most Democrats and an increasing number of Republicans have been bought out by Big Tech’s extensive lobbying. Silicon Valley is onto a good thing, and, naturally enough, they want to keep it going—which is why they’ve been silently upping their lobbying presence in Washington, both overtly and covertly. If you combine IT, electronics, and platform technologies, Big Tech is now the second largest lobbying group in our nation’s capital, right behind Big Pharma, with Google’s parent company Alphabet frequentl
y weighing in as the single largest individual corporate lobbyist in Washington.28
Google emerged as the most influential corporate lobbyist—and the one to get more face time from the White House than any other corporate entity—during Barack Obama’s second term, just as Big Tech was emerging as what criminal investigators term a “subject of interest.” That’s when Google, Facebook, and other Big Tech firms began to blanket an unlikely assortment of interest groups with money. The American Library Association, the American Association of People with Disabilities, the National Hispanic Media Coalition, and the Center for American Progress, for example, may not seem like natural allies of the tech revolution, but they have supported some of the regulatory loopholes that Big Tech firms enjoy, including rules that shield them from liability for what users say and do online.29
These groups might have reason to object to these tech behemoths on various policy issues, but the heavy donations from their Silicon Valley benefactors often garner tacit support, and sometimes outright endorsement. The ALA, for example, unlike many other groups that represent authors or publishers,30 supported Google in its fight for the right to scan all the world’s books,31 and while it’s true that librarians generally support free speech and want books to be widely accessible, it’s also true that Google gives the ALA money and has worked closely with them on various indexing and coding projects. Google has even wormed its way into academia, funding numerous research projects that deal with high-tech issues, and in turn winning favorable commentary from academics who might otherwise be skeptical.32 In reporting on these issues, I’ve found it quite difficult to locate completely independent voices on the topics—most experts are funded in some way by either Big Tech firms or their corporate opponents, which goes to show just how thoroughly monied interests have captured the civic debate in the United States. Technologists want to have conversations about economic, political, and social issues on their own terms, or not at all.
The bottom line is that these companies have manipulated the system to ensure that they can continue to operate freely, without the burden of pesky government intervention. The result is that they all too often exist in a universe of their own, not just outside of national borders, but somehow transcending borders altogether. It is in this spirit that Palantir’s Peter Thiel and other powerful tech entrepreneurs and investors have suggested that California secede from the Union; Thiel once funded a plan for a network of floating islands that would operate outside of U.S. government jurisdiction, while he and other tech billionaires maintain hideaways in New Zealand.
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IN THE MEANTIME, Big Tech itself—like Big Finance before it—has controlled the narrative, using complexity to obfuscate. I cannot tell you how many conversations I have had with fast-talking technologists who try to throw as much jargon against the wall as possible to see what sticks. Yet the simplest questions are often the ones they have the most trouble with. I continue to await a clear answer to the fundamental questions: “Are you playing by the same rules as everyone else? And if not, why not?”
Silicon Valley has always had a core Ayn Rand libertarianism underneath its hippie patina: It justifies their sense of freedom from any costly social responsibility for the downsides of their products and services. As Jonathan Taplin, Jaron Lanier, and other Silicon Valley critics have written, the tech titans may tend to vote left, but the strong libertarian bias in digital culture cuts right. Theirs is an eighties-style “Greed is good” ethos overlaid with the contempt of a youthful generation of CEOs who’ve never seen government do anything much more ambitious than cut taxes. All of this has resulted in a self-interested and shortsighted “disrupt everything” mentality. It’s much easier, of course, to break things than to fix them.
The New Monopolists: Big Tech and Its Economic Implications
In my nearly three decades of business journalism, I’ve learned one investigative rule: Follow the money. Big Tech has more of it than any other industry today, and while their meticulous product designs, aggressive marketing, and massive economies of scale have certainly been key drivers of this wealth, Silicon Valley’s riches are also a product of a more fundamental economic shift: from an economy based on widgets (and the servicing of widgets) to one based on bits and bytes. Big Tech is redefining what is real and what is of value in our economy, and nothing is more valuable to these companies than our personal data, acquired invisibly from virtually every keystroke we make online, as well as from an increasing number of the moves we make in the physical world. (If you have an Android phone, it knows where you are right now; if you have sensors in household products, they can track things, too.)33
When powerful tech firms keep us glued to our devices, it’s not really our minds they’re after, but rather the data that makes up our consumer profile—a combination of our age, location, marital status, interests, background, education level, political leanings, purchase history, and much more. They then sell this data to third-party marketers, who may in turn sell it to any number of others that want to reach you, from retailers to election manipulators in Russia. It can be deployed in hyper-targeted ads or agglomerated to provide super-detailed forecasting of a variety of social and commercial trends that are of incalculable value to their acquirers.
Such data is the oil of the information age, and it fuels the growth of those companies that can run on it—which is, nowadays, almost every company in almost every industry. This is a very important point—while the problems I’m outlining in this book (loss of privacy, corporate monopoly power, the decline of liberal democracy, and so on) are often best illustrated by the FAANGs, they certainly don’t end with them. It’s telling that Cambridge Analytica, the British political firm employed by the Trump campaign in the 2016 elections, leveraged information garnered not just from Facebook to create voter profiles, but from dozens of other sources as well, including educational institutions and church groups;34 in fact, you could argue that the tech companies are simply the canaries in the coal mine for what will eventually become a much larger shift toward a surveillance capitalism system in which businesses and organizations of all stripes will take part. Just as the businesses that figured out how to use mechanized equipment in the industrial age were the ones to thrive, those who are able to make use of this data do the equivalent in our time. And Google and Facebook have figured out how to use all these data points to target ads with the granular precision of a drone strike on an ISIS commander emerging for a cigarette from a bunker somewhere in Syria at 3:13 P.M.
So far, this data has been obtained via computers and mobile devices. But with the rise of personal digital assistants like Amazon’s Alexa, Google’s Home Mini, and Apple’s Siri—now in a third of American homes, with triple-digit sales growth a year—the human voice is the new gold. While reports of Alexa and Siri “listening in” on conversations and phone calls are disputed, there is no question that they can hear every word you say—and from there, it is a short step to them using that knowledge to direct your purchasing decisions. It isn’t much of a longer step to see the political implications—already some researchers worry that digital assistants will become even more powerful tools than social media for election manipulation.
Certainly, none of us will be unaffected. Consider that homeowner who was denied insurance, an example which is by no means singular. Since its inception, the insurance business has been based on risk pooling: Total up the cost of insuring a particular group of homes, cars, and lives, and then divide it up evenly, property by property. In the data age, insurance groups will be able to draw information from tracking devices in your car or sensors—like a “smart” thermostat or smoke detector or security camera (perhaps made by Nest Labs, the leader in smart home products, which is owned by Google)—embedded in your house and then use it to price a policy exclusively for you based on your habits and personal style. You might be rewarded for putting a new plumbing syst
em into your own old house (the sensors will measure how well it works), or stopping judiciously at yellow lights. Nice, right?
Here’s what’s not so nice. You take a price hit when sensors detect your sixteen-year-old puffing weed in his bedroom (smoke detectors will relay the message to your insurer in real time) or if you fail to shovel the snow off the front stoop before it ices up (sensors will record when and if you did and convey that information to the insurance company, limiting their own risk of liability if a passerby slips). You might be given the chance to opt out of all this surveillance, but the insurance company won’t make it easy. As it is, when you go onto platforms like Facebook or Google, you can’t say no to the surveillance without forfeiting your rights to use many of the services altogether.
It’s easy to see how this level of micro-targeting could impact the weakest and more vulnerable; Google, for example, took years before it stopped allowing payday lenders to advertise on the platform, where the personal information they could leverage made it all too easy for them to target vulnerable borrowers.35 Likewise, the insurance example I’ve outlined above, which disrupts risk sharing among a larger population and leaves the individual on their own, could ultimately result in an uninsurable underclass, left at the mercy of subprime lenders or the state. Which brings up another dirty secret of the digital age—the fact that the government may well end up being the insurance provider of last resort, placing the burden of insuring those deemed high risk by private companies on the taxpayers.36