Anti-competitive, spiteful, and other unfortunate behaviours from major tech companies will bring major adverse consequences
Recently, I was reading an article in the NY Times entitled “Tech Goliaths Act Like Davids”, which caused me to reflect on some of the articles about Big Tech over the last couple of years. The interesting thing to me, in the history of the biggest tech companies in America: Apple, Microsoft, Amazon, Google, Facebook, etc, are not just the biggest tech companies on Earth, they’re just some of the biggest companies on Earth right now, full-stop. But in the climb to become giants, they have engaged in tactics that could be described as predatory, but certainly as petty and spiteful, especially when coming from some of the biggest companies on Earth. Something that may be acceptable, or even respectable, in a small company, just looks like bullying when you’re really big.
Whilst most individuals, most companies, do not have the wherewithal to be able to endure that onslaught when it’s focused on them, so even if they may be in the right, they’ll fold when challenged by Big Tech. However, as the EU has made a long-standing habit of taking on tech companies, and the US is a lot more willing to, in no small part because, unlike in the past, the Powers that Be in DC (that is to say the political branches of the US Government), view the tech giants with suspicion, a suspicion shared by a non-trivial portion of the American people. And governments, unlike individuals or even most companies, can go as long as they have to in pursuit of their ends.
Part of the reason that tech companies have, for most of the last two decades, generally avoided the regulatory fervour of DC is because of a few factors:
1) Antitrust law, especially in the US, is focused on artificially inflated high prices that come from oligarchic or monopolistic market share, not on non-price related factors.
2) Most of the major tech companies, in furtherance of trying to achieve market dominance, have kept their prices low, in theory benefiting consumers.
3) People of a Republican bent are generally wary of regulating big business, given the pro-business orientation that has been part of the GOP for well over a century.
4) People of a Democratic bent are, or have been, adverse to regulate the tech industry, given that so many tech workers are socially liberal and support left-leaning causes, never mind the fact that Silicon Valley has replaced Wall Street as the place for Democratic power players leaving government service.
However, as a part of that, tech companies have:
1) Done a lot of things to endanger peoples’ privacy and the security of their data, not just to cyber-criminals but also to states who exploit these lapses (Russia, but especially China, which as a matter of national policy (cf the National Intelligence Law and Cybersecurity Law, both of 2017) compel Chinese citizens and organisations to cooperate with “state intelligence work”).
2) Exploding online markets for classes of goods to drive competitors out of business and/or sell themselves off (especially Amazon, but it’s not alone there) — classic anti-competitive behaviour, even if it is, in the short and medium term, causing prices to fall on consumer goods.
3) Related to the former, tech companies like Amazon and Google creating competitors to the companies that use their platforms (leading to the Elizabeth Warren tweet (https://twitter.com/ewarren/status/1120484639922110464): “Giant tech companies have too much power. My plan to #BreakUpBigTech prevents corporations like Amazon from knocking out the rest of the competition. You can be an umpire, or you can be a player — but you can’t be both. #WarrenTownHall”)
4) Using AI, machine learning, and other forms of “Big Data”, as well as the algorithms that people like me come up with, to exploit people. Cambridge Analytica is an example of this, but there are so many others to list them all here.
5) As a result of the last point, major tech companies (especially those in the social media sphere) are seen as having torn down many of the systems that have kept representative democratic states functioning well.
6) Mentioning algorithms developed by people like me, given the explosion in the amount of data that we have, they are being used in progressively more areas, meaning that progressively more decisions are being made by, or at least strongly influenced by, algorithmic tools. Meaning, that if junk data or data that is collected through bigotry-based methods is used as the basis of analysis (which is rather sadly common for many factors), then people have been, are, and will be, discriminated against, even if the tools being used to make the evaluations are not bigoted.
Attorneys-General in many of the US states have already gone after tech companies for issues surrounding anti-competitive practices and harm caused to consumers (following the example of EU regulators and lawmakers more than US federal ones, who have been more laissez-faire). Of the major tech companies, there are different issues on each, and some are more likely to be broken up than others. Facebook (the company) owns three social media services that are, by their nature, competitors (Facebook (the website/app), Instagram, & WhatsApp)) but are held under the same corporate umbrella. Twitter & Reddit also have a lot of impact, in the social media space, as does LinkedIn, but other than Twitter, the foci of Reddit & LinkedIn are different than the general lifestyle things that get communicated through those first four, and three of them are owned by the same corporate parent. Google, the overwhelming worldwide dominant leader in internet search is also the owner of YouTube, the worldwide dominant leader in online video, putting many people at Google’s mercy if they want to get their content out. You don’t think that isn’t something that’s liable to get people to ask “Why do we let this happen”? It’s not just “enemies of big business”, such as Elizabeth Warren who are looking to regulate or break up “Big Tech” either. The power that Big Tech has is so massive, and in some cases so obvious, that one of Facebook’s co-founders (Chris Hughes) wrote an op-ed in the NY Times supporting the break-up of Facebook. It is, as University of Washington Professor Margaret O’Mara noted in an op-ed (also in the NY Times) describing why letting the tech industry regulate itself is no longer a reasonable approach: “Washington’s hands-off approach ultimately permitted a marvellous explosion of content and connectivity on social media and other platforms. But the people designing the rules of the internet didn’t reckon with the ways that bad actors could exploit the system. The people building those tools had little inkling of how powerful, and exploitable, their creations would become.”. Amazon, Facebook, and other tech platforms, will probably be restricted from selling products that compete against others that use their companies platforms. Apple is a vertically integrated company, that is to say it oversees all aspects of what goes into its devices, which generates its own complaints, however, their defence fundamentally is, “We want to make sure everything works perfectly with each other, so we have built a walled garden to protect it all”. This strategy is also something that will draw regulatory ire, as has Apple’s regular and repeated “Mea culpa” every time it comes out some child has racked up massive charges on their parents’ Apple store accounts. Most all major tech companies have aspects of their operations that draw critical looks from those in government. Almost 7 in 10 Americans recently polled said they were in favour of breaking up major tech companies, including Amazon, Google, and Facebook, so the obvious thing to consider is when a critical eye is upon you, you don’t give people excuses to go after you, yet this is a perspective that requires hard-earned experience of learning that pride going before the fall, or if you’re smart, you read the lessons of history and learn from other peoples’ mistakes.
Ironically, part of how Microsoft has been able to avoid the public spotlight and furore that many of the other Big Tech companies are enduring now is because, having endured that in the 1990s, Microsoft has become publicly humbler (arguably this was one of Steve Ballmer’s biggest contributions as Microsoft CEO, changing Microsoft’s image with the US Government, cleaning up the wreckage from years of legal battles, as well as starting the push towards enterprise services as a primary focus of Microsoft, making it less dependent on the general consumer market. It should be noted that Steve Ballmer’s other major contribution, in my opinion, other than stabilising the company and untangling it from its legal issues was in the realm of corporate revenues, arguably something for which Ballmer’s background well suited him. From January 2000, when Steve Ballmer took over as Microsoft’s CEO, to February 2014, when he left and was succeeded by Sadya Nadella, under Ballmer’s tenure, Microsoft profits doubled to 6.33 billion USD per annum and revenues trebled to 18.53 billion per annum). It’s also because of the fact that Microsoft is, other than its operating systems and Office productivity software suite, almost entirely an enterprise company at this point, that is to say a company that does business with and for businesses, not consumers. This makes it much less in a position to be in the forefront of most Americans’ minds, even if almost everyone uses Microsoft software, or have their lives impacted by Microsoft products and services. It’s also obvious in the number and types of investigations now going on at the federal and state levels, very few are against Microsoft, almost all are against the rest of Big Tech.
Why else do you think Jeff Bezos and Amazon are making such big investments in the DC area but to buy presence and protection from politicians and regulators in DC? Amazon announcing the location of HQ2 in Crystal City. Jeff Bezos buying the Washington Post. Amazon going heavily into its willingness to take government and defence contracts (in contrast to Google and most others besides Microsoft and smaller companies like Palantir) but to buy itself the good graces and protection from regulators and lawmakers. Amazon may not be an enjoyable place to work for many if not most of its employees, but it does provide a lot of goods to a lot of people quickly and cheaply, which works in its favour and buys it a lot of grace from politicians. Amazon’s focus on customer service that borders on obsessive is another thing that builds good will with customers. As does the fact that so much of Amazon’s capacities are inter-connected. Amazon, in order to solve its need to address surge capacity demands, brought online a lot more server capacity that Bezos & company realised they could put to work for most of the year for external customers, and Amazon Web Services was born, a business that is now a major profit centre for Amazon. Possession of all of that server capacity is also what allowed Amazon, as a part of its Amazon Prime service, to roll out Amazon Prime Video, a free add-on for people who are already Amazon Prime subscribers, for which Amazon charges 8.99 USD a month as a stand-alone product. Amazon Prime Video is, what is in the language of the times, a “side hustle”, yet Amazon Prime Video is 2.5 times the size of Netflix in revenues, a company that is considered the market leader in streaming video, that has 4.5 times the number of streaming titles (I’m not commenting on the relative quality of the titles held by each service, just the numbers available). As a Bloomberg article of 21 July 2020 noted that Amazon has set a lobbying record for the second quarter of 2020 (ending 30 June), spending 4.38 million USD on lobbying during the second quarter, as Amazon has faced increasing antitrust scrutiny in DC as well as regarding the challenges of delivering goods to Americans stuck at home during the COVID-19/SARS-CoV-2 pandemic. The spending for Q2 2020 was up more than 9 per cent from the same period in 2019, and is a slight increase from its previous record, set just last quarter (Q1 2020), which Bloomberg notes this data is drawn from the lobbying disclosures filed with Congress.
There’s an old saying in computing, “Garbage in, garbage out”, abbreviated GIGO (and to many Britons is known as “Rubbish in, rubbish out” (RIRO)), meaning that faulty inputs invariably lead to faulty outputs. Well, think about the fact that many algorithms are increasing in what things are under their influence. What if the data that underlies many if not most of those algorithms are biased, not only in a statistical sense, but in a way based on previous racial or ethnic influenced policies? Redlining in mortgage lending, differential arrest and conviction rates for comparable crimes given different levels of enforcement in different areas, etc. have all had impacts on average income per postal code, average amount of wealth in different racial/ethnic categories, and so on. Hidden biases in both the collection and analysis stages present considerable risks, and are as important to the big-data equation as the numbers themselves. There was recent news that many major image-processing algorithms have, when processing pixelated images, output questionable if not improper outcomes, including taking a pixelated image of former President Barack Obama, a bi-racial man, and outputting a white face. Using the same technologies, a picture of Lucy Liu, a woman of Chinese descent, was transformed into a white woman. This issue that these examples highlight is a common one in image processing, given that the vast majority of those who work in image processing, as well as other aspects of machine learning and AI at large tend to be white men, so when dealing with faces that aren’t men or are of persons of colour, means their performance tends to be a lot less effective on data that such models aren’t trained on. These are examples of the concept of algorithm bias, and algorithm bias is something which can, has, and will, adversely impact many if not most, which is why, when things become more dependent on the outputs of algorithms, that the inputs be as accurate and complete as possible, however, given that so much of the data that goes into so many systems to generate conclusions that impact the lives of everyone are flawed, and include many biases, both intentional and not as intentional, that skew the outputs these systems generate, to the detriment of many.
The rising problem of deepfakes, which are getting so good that they are almost indistinguishable from the real thing, will only get worse, which will cause people to lose even more faith in the ability for tech companies to regulate themselves, leading to even more calls for governments to regulate tech companies, since such deepfakes can be used to skew electoral results. Lyndon Johnson, in one of his congressional races, decided to spread the rumour that his opponent engaged in bestiality with those of the porcine ilk (that is to say LBJ said his opponent was engaging in sexual congress with pigs). LBJ’s campaign manager is said to have responded, upon hearing this plan: “Lyndon, you know he doesn’t do that!” The future President Johnson replied, “I know. I just want to make him deny it.” This is something that may be apocryphal, but still, gets to a common issue in politics, the furore of an issue getting so massive so quickly that people are forced to respond to issues before all the facts can get out, something that happens with ever-increasing speed given the rise of technologies that can spread information (and misinformation), further and faster than ever before. The axiom “A lie can spread halfway around the world before the truth can get its boots on”, and that was in the days of newspapers and when information transmission took time, when whomever was its actual speaker (there are disputes on who it was), had no idea of the speed which the internet and social media could cause distorted perceptions of events. What protections will exist for people falsely maligned through the use of deepfakes? What are tech companies doing to prevent their dissemination? Do you think that people will stand for someone getting cashiered from public life for something that is false, once that falsehood comes to light? The potential impacts are disastrous, as Brookings noted deepfakes will cause: “distorting democratic discourse; manipulating elections; eroding trust in institutions; weakening journalism; exacerbating social divisions; undermining public safety; and inflicting hard-to-repair damage on the reputation of prominent individuals, including elected officials and candidates for office.” Societies are built on public trust, especially public institutions in representative democratic societies. What happens if trust in others is no longer possible? The impacts for societies are undeniably disastrous.
Another reason why tech companies are being looked at more critically than in the past is the fact that in the time of great need for innovative solutions to the problems caused by degrading race relations, massive educational disparities, economic disruption, the COVID-19/SARS-CoV-2 pandemic, opioid addiction, and many others, where are solutions coming out to address these pressing issues? In the past, technologies helped to solve the world’s major concerns (communicable diseases, malnutrition, literacy, etc), filled human aspirations, including the spreading of democracy and space travel. Now, all tech companies seem to deliver are the things that fill the void of wants for educated, upper-middle class, normally single and urban living, people who work in tech, as well as those who bankroll tech companies as venture capitalists (many of them former tech workers themselves). As was noted in a recent (June 2020) article in MIT Technology Review: “In the United States, she says, 75% of venture capital goes to software. Some 5 to 10% goes to biotech: a tiny handful of venture capitalists have mastered the longer art of building a biotech company. The other sliver goes to everything else — “transportation, sanitation, health care.”” It’s a self-perpetuating machine that shuts out many useful forms of human endeavour that could be backed, because the need for such things are outside of the experiences of those who work in, and those who fund, many if not most tech companies. Tech company leaders ask policy makers in DC “why don’t they (the policy makers) understand the tech companies and how they work?” Well, when you have an industry that draws from one part of society at large, that mostly is located only in big & liberal urban areas (most US tech centres: The Bay Area, Seattle, NYC, and Boston) are in left-leaning states, states that haven’t voted for Republican candidates for state and federal office for upwards of a generation or more, etc, it’s difficult to understand a demographic you have no interaction with. Not just is this the case of demographics or political party sorting along the lines of what Bill Bishop discussed in The Big Sort etc. — most people who go into policy work and/or into elected office have educations in law, or in public policy & administration, and more often than not will have a series of un-paid, or underpaid internships, since normally the only way into a Congressional staff or think tank is through the internships that, because they are, to tech workers, underpaying what tech workers can make interning at tech companies, so, guess what, not surprisingly, you have people with STEM educations tend not to take un(der)paying entry-level jobs that you need to make it in DC. This is even more true of elected officials, many of whom get their starts as legislative staffers, or in district attorney’s offices as prosecutors, and other forms of work that aren’t as financially remunerative as a career in tech is. The tracks to pursue a career in a tech company on one hand, or to go into policy/political work, tend to diverge and diverge early in life.
There are also the issues, not just of throwing in so heavily behind one political party, and of addressing issues really of only one socio-economic status cohort, but also of implementing technologies without thinking of the adverse consequences of those technologies. Many founders and leaders of tech companies, their educational backgrounds are in STEM fields, almost exclusively. A STEM-based education can impart how to do things, by its nature, it doesn’t often impart why things are done. The value of the humanities and social sciences are that the questions they evaluate, that they ponder, is how and why people do the things they do. I cannot think of a technology in existence that hasn’t been manipulated in ways not intended by its creators. People, even with the best of intent, can create things that can be used for great evil if not carefully monitored and controlled, something that most tech leaders, who tend to be believers in techno-utopia, are not wont to look critically at the things they create, believing unreservedly that technological progress will bring progress in all other areas. This is why, in my humble opinion, the humanities and social sciences are needed now more than ever, to provide perspectives that technically-focused educations do not provide on their own. As Sam Rayburn, long-time Speaker of the US House of Representatives, was fond of saying: “Any jackass can kick a barn down, but it takes a carpenter to build one.” Meaning that, it’s a lot easier to tear down systems and institutions than building them or replacing them, something, that many people in tech, with the desire to “move fast and break things” undoubtedly did not and in fact could not consider, what would fill the vacuum of what was being torn down. As we have seen, without care and planning, what fills the vacuum have been the dregs of human emotion and the darkness that exists in human hearts and souls.
The founders of Big Tech are purported to be the brightest minds of recent generations, yet couldn’t see the impacts of things like this? The things that were supposed to improve the lives of many in societies at large are often spreading despair, distrust, and discord instead. People will question, and in fact are already questioning, how much we as a society can actually trust such people. The public embarrassment of, and loss of trust in, tech leaders is only compounded by the fact that, when such breakdowns in their technologies happen, either from exploitation from malicious actors, or by mistakes from tech companies, compounded by the fact that they don’t immediately and fully expose themselves, say “We screwed up and we’re sorry”. It’s certainly this lack of humility to admit fault & to their limitations that is causing many of the major tech companies to come under the more watchful gaze of the PTB in DC and in the capitals of the 50 US states. It’s also openly and deeply embracing causes that may appeal to its mostly left-leaning workforce, but of course, in so doing, have made it suspicious to those on the political right, who control most of the state capitals. A major reason that public companies, especially the largest and most influential corporations have, as a matter of history, tried to keep politics out of their business is because it is internally divisive and it places a giant target on your back for your political enemies. Meaning whatever external rewards you get from like-minded politicians or from internal cohesion from having a group of like-minded employees, it almost always generates way more in blowback than that’s worth. It also means, now that both sides are looking at regulating tech companies, those tech companies, other than Microsoft (who learnt its lessons from its brash challenging of politicians and regulators back in the 1990s), and probably Amazon, who do they think will defend them? I wonder if they thought that far ahead? Or just thought, if we spend enough money on lobbying in DC, we can go on as we are, without changing in any real way?
In summary, for major tech companies, the consequences of their actions, of their choices, will be, I think severe, and I’m pretty sure most of tech isn’t going to be ready for the whirlwind that they will reap from the wind they have sown. Tech companies have demonstrated a generally stunning lack of ability to police themselves, along with a remarkable lack of self-awareness of the impacts of the technologies they’ve created on society at large, which will mean that, unless tech companies develop the maturity and foresight to make changes quickly and decisively to themselves and how they operate (which I severely doubt), those changes will be made for them in DC, Brussels, London, Tokyo, etc, and major tech companies will have no one to blame for themselves for the outcome.
This post was updated on 23 July 2020 to fix minor phrasing issues, as well as include the reference to Amazon’s Q2 2020 lobbying expenditures setting a record.