The tech titans of Silicon Valley view themselves as a new type of entrepreneur. But their commitment to “doing the right thing” seems to end when their bottom line is in jeopardy. So how different from Big Oil or Big Tobacco are they really?
When representatives of an entire industry are asked to testify before Congress, it’s usually not about the side they want the public to see. Just ask the heads of Big Tobacco.
This fall, the kings of the “new economy” — Big Tech — had their turn in front of congressional investigators, who grilled them on their role in the 2016 election.
To the representatives of Facebook, Twitter and Google, this was a new experience. To those who are familiar with the excesses of unchecked capitalism, it seemed like old news. Up to this point, the experience of these online behemoths is no different than that of Big Oil or Big Tobacco.
“Why have social media and technology companies been exempt from enforcement of existing laws? … we regulate communication. We regulate who can talk, how they can talk, and who pays for it.”
ExxonMobil advocated for self-regulation when the company knew — as early as 1981 — that its own products were accelerating global warming. Philip Morris similarly kept quiet about evidence that cigarettes are addictive and kill people.
Social media moguls operate within the same system that allowed such companies to fend off government regulation for decades. Facebook’s Mark Zuckerberg, Twitter’s Jack Dorsey and Google’s Sundar Pichai know their platforms’ enormous influence and potential for abuse. But they have chosen to follow in the footsteps of a long line of CEOs who let their corporate bottom line distort their oft-proclaimed commitment to the public good.
Digital Gerrymandering
.
In the aftermath of the 2016 presidential election, Mark Zuckerberg posted one of his characteristic reflections. After writing off the possibility that “hoaxes” on his platform significantly influenced the election, Zuckerberg’s continued,
Overall, I am proud of our role giving people a voice in this election. We helped more than 2 million people register to vote, and based on our estimates we got a similar number of people to vote who might have stayed home otherwise. We helped millions of people connect with candidates so they could hear from them directly and be better informed. Most importantly, we gave tens of millions of people tools to share billions of posts and reactions about this election. A lot of that dialog may not have happened without Facebook.
In retrospect, Facebook’s targeted voter registration and “go out and vote” prompts have been criticized for their ability to mobilize specific segments of the population, and termed “digital gerrymandering” by Jonathan Zittrain, Harvard University professor and director of the Berkman Klein Center for Internet and Society. Pride in the platform’s facilitation of public discourse feels short-sighted when Facebook was later subpoenaed for just that.
Zuckerberg may have unintentionally foreshadowed the fallout of these efforts in stating that “a lot of that dialog may not have happened without Facebook,” and yet the tech industry’s calls for self-regulation have remained virtually unchallenged.
Google, Twitter and Facebook have unanimously backed the objectives of the Honest Ads Act — a bipartisan bill which would mandate the disclosure of campaign advertising information on social media.
But while paying lip service to the bill’s goals, the tech companies have made clear that they don’t support public regulation or legislation to achieve those goals. Similarly, Ajit Pai, the industry-friendly Federal Communications Commission chairman, aims to make current rules governing net neutrality voluntary.
Up to now, the tech giants’ self-serving advocacy of self-regulation has generated little pushback from Congress and the general public, but that may be changing — as evidenced by the tough questioning at the recent hearings and degrading public trust of platforms.
This greater scrutiny of the platforms’ performance under stress has opened up space for regulators to look at the laws and assumptions that govern the tech industry as a whole.
Amid inaction and the failure to produce legislation to address technological innovation, monopolistic platforms have gained enough momentum to enter “too big to fail” territory.
“I think the most interesting question in the next 12 months is: Why have social media and technology companies been exempt from enforcement of existing laws?” Dora Kingsley Vertenten, professor at the Price School of Public Policy at the University of Southern California, told WhoWhatWhy. “Silicon Valley and social media companies have largely acted as if they are new beings, when in fact we regulate communication. We regulate who can talk, how they can talk, and who pays for it. Facebook ads and paid content are political communication. They are regulated by the Federal Communications Commission.”
Among the first signals of a pushback is Missouri Attorney General Josh Hawley’s (R) investigative subpoena to Google. In a statement, Hawley expressed suspicion that Google’s business practices violate consumer protections and state antitrust law.
“There is strong reason to believe that Google has not been acting with the best interest of Missourians in mind,” he said, adding that his office “will not stand by and let private consumer information be jeopardized by industry giants, especially to pad their profits.”
For now, platforms are passively exempt from enforcement of antitrust regulation in the US. Amid inaction and the failure to produce legislation to address technological innovation, monopolistic platforms have gained enough momentum to enter “too big to fail” territory.
Facebook’s 2014 purchase of WhatsApp — a messaging service that had no revenue but enormous potential for growth, then employing fewer than 60 people — illustrates one of the many cases in which tech companies buy potential competitors.
“You think the government and antitrust would eventually say ‘You can’t own them all.’ But at the moment you can. You can’t have competition if you own the competition.”
Facebook’s latest merger with social media app tbh marks its 65th acquisition. In 2010, Zuckerberg explained this strategy to consolidate industry power, “We have not once bought a company for the company. We buy companies to get excellent people.”
“Instead of innovating, they’re buying the competition that will eventually outgrow them,” Robert Hernandez, digital journalism professor at the University of Southern California Annenberg School for Communication and Journalism, told WhoWhatWhy.
“You think the government and antitrust would eventually say ‘you can’t own them all.’ But at the moment you can. You can’t have competition if you own the competition. Whether [Zuckerberg is] buying the company or the people, it doesn’t matter what his intent was. He owns them. He will continue to own everything until someone steps in.”
By the numbers, 79% of American Internet users are on Facebook, and its reach extends beyond the platform. Facebook dominates social login market share, last measured in 2016 at 64%. Often seen as a “Sign in with Facebook” prompt, the platform’s 2.07 billion active users can transfer their Facebook identity to external sites.
Google follows with 29% share of social logins via Google+, and maintains its dominant position as the preeminent search engine giant. 80% of searches on desktop computers use Google, and the search engine has an even greater market share on mobile devices, making up 97% of searches.
In 2016, these businesses were responsible for the majority of the $59.6 billion to $72.5 billion in revenue growth in digital advertising in the US, according a report by the Interactive Advertising Bureau (IAB).
While an IAB spokesman credits 69% of this growth to Facebook and Google alone, industry experts offer a range of estimates up to 99%, and discussions on this new duopoly arise alongside those already pertaining to the concentration of wealth in the tech industry.
Whether any of the Big Five tech companies — Apple, Alphabet (Google), Microsoft, Facebook and Amazon — have reached monopoly status may be up for debate. But these platforms’ tendencies toward monopolization — which protects them from being held accountable for privacy breaches, violations of user rights and other forms of corporate wrongdoing — is fostered within an unregulated system.
In regard to their preferential treatment of the bottom line, nothing distinguishes Big Tech from Big Oil or Big Tobacco other than the potential for the tech industry to learn from past mistakes.
Such mistakes have necessitated regulation. For instance, the Sarbanes-Oxley Act was passed in response to a slew of major corporate accounting scandals, most notably the 2001 Enron scandal. The act led to expanded transparency by mandating financial reporting by US public companies.
Another attempt to manage a crisis, the Dodd-Frank Act, introduced further financial regulation in response to the 2007-08 financial crisis. The purpose of this regulation is to protect consumers and prevent another catastrophic corporate collapse, like when the Lehman Brothers declared bankruptcy in 2008 with more than $600 billion in debt.
Are we waiting for Big Tech’s breaking point, after which regulators scramble to pick up the pieces with long-overdue legislation? When launching Facebook’s 2012 public offering, Zuckerberg identified the Sarbanes-Oxley Act of 2002 and Dodd-Frank Act of 2010 as “risk factors” which could incur potential costs to Facebook Inc.
Zuckerberg’s perception that these regulations are at odds with his company’s potential for growth raises questions concerning his threshold for acceptable corporate behavior. Would Zuckerberg allow his company to be more influential than its user base and shareholders? Has he?
Evading Accountability
.
Facebook’s business practices are not unique. Companies have evaded accountability for violation of user rights and privacy breaches, including those covered under the Health Insurance Portability and Accountability Act (HIPAA) and the Payment Card Industry Data Security Standard (PCI DSS.)
The 2017 Verizon Payment Security Report investigated 300 payment card data breaches across various industries between 2010 and 2016, and found that none of the companies breached in the past 7 years were fully PCI DSS compliant. Equifax has yet to make public its PCI DSS compliance status in the wake of this year’s hack, or even whether the hacked data was encrypted.
If data mining and surveillance provides better services for users, many may consider abandoning traditional notions of privacy altogether.
Of note in the Verizon report is the finding that the IT sector was the least compliant on their measure of protecting data in transit, indicating a failure to use strong cryptography. Google’s email server Gmail by default sends unencrypted messages, and a lack of regulation means that it is up to users to make sure their data is encrypted.
Achieving HIPAA compliance using Gmail serves as one illustration of the ways in which tech companies are not held accountable for privacy breaches under existing security regulation. For a Google user to be HIPAA compliant, Google must sign a Business Associate Agreement, which encrypts email at rest and sometimes in transit. Email arrives in the recipient’s inbox unencrypted, necessitating the use of a third party vendor to ensure inbox-to-inbox encryption and HIPAA compliance.
Regardless, a lack of universal encryption doesn’t seem to stop users from sharing information. Technology’s facilitation of mass surveillance has been public knowledge since 2006, when AT&T technician Mark Klein and the Electronic Frontier Foundation filed a class-action lawsuit against AT&T for allowing the National Security Agency to systematically gather data within certain parameters.
Tobacco executives taking oath prior to testifying before the House oversight hearing on tobacco products, April 14, 1994.
In this case, AT&T targeted Americans suspected of having ties to al Qaeda. In the next, it may be people who watch Game of Thrones, shop on Amazon or use Lyft. It may be webcam data gathered from celebrities, or images sent over insecure networks on college campuses after 1 a.m.
Considering that Facebook asked users to send in their nude photos as a way to combat revenge porn, adding that the image will be viewed by Facebook workers, users are in the dark about the methods and standards by which platforms handle user data.
“Before we address [whether tech companies are] equitable or just, we need to get [them to be] transparent.”
In their written testimonies to the Senate Judiciary Committee, each platform — Google, Twitter, and Facebook — cites investment in machine learning as a tool for addressing the problem of extremist or spam accounts. Although machine learning, the process by which artificial intelligence learns from data, can accelerate their platform’s power to address abuse, it also creates the potential for increased surveillance and data mining.
Machine learning is distinct from artificial intelligence in that the algorithm can modify itself based on what it learns from the data it consumes. The tech industry’s use of this method has produced mixed results. Programmed with a goal in mind, whether it be removal of bot accounts or collection of data within specific parameters, machine learning algorithms are hungry for user data.
At play is the fact that technology has, for the most part, made daily life more convenient. If data mining and surveillance provide better services for users, many may consider abandoning traditional notions of privacy altogether. Tech companies know that users don’t have to pay for their services when instead they are providing an endless stream of valuable data.
Privacy considerations aside, machine learning has the potential to accelerate the growth of the already dominant Big Five tech corporations, which make up over 40% of the value of the NASDAQ 100 index.
But don’t expect any of the Big Five tech companies to support decentralization of user data. Regardless of where individuals stand on their support of such a measure, the uphill battle it would face illustrates that users have weak bargaining power compared to the influence of tech lobbyists.
External regulation of the tech industry presents a third option in this trade-off, in which tech companies’ internal operations, not just their products, are accountable to users. Vertenten, the University of Southern California professor, explains the value of such regulation.
“Before we address [whether tech companies are] equitable or just, we need to get [them to be] transparent,” she said. “If they would just be transparent, then we could have a debate about whether it could be equitable or just. We have no idea.”
Presently, any mechanisms we have to hold platforms accountable for the official information they choose to make public, such as their internal operations and policies, fail to give the whole picture.
For example, users don’t know the monetary value of the data they provide to platforms, that is, until after a transaction in which their data has been sold to other entities. Milton Mueller, public policy professor at Georgia Tech and founder of The Internet Governance Project, describes one way in which platforms could counterbalance their tendency toward monopoly.
“I’d like for social media to elude national boundaries and create truly transnational communities who have a stake in a free internet,” he said in an email to WhoWhatWhy. “This would have great potential to restructure Internet policy, if not ‘society’ in toto. I’d like to see more competition, which may have to be facilitated through end user graph portability or at least data portability.”
Simply put, end user graph portability transfers ownership of user data from platforms to the users themselves. All user data is decentralized across platforms and transferred to any service they use. Users could then choose to use social media and other tech services based on more criteria than just their ubiquity. More freedom of choice for users means more competition among tech companies.
But don’t expect any of the Big Five tech companies to support decentralization of user data. Regardless of where individuals stand on their support of such a measure, the uphill battle it would face illustrates that users have weak bargaining power compared to the influence of tech lobbyists.
A retrospective on the history of the tech industry may recognize November 1st, the day of the tech hearings, as the day the public and lawmakers were forced to confront this imbalance of power.
“Given Facebook’s power to dramatically influence public processes like elections, how can we create truly fair and public audits of Facebook’s platform power?” asked Mike Ananny, assistant professor at the University of Southern California Annenberg School for Communication and Journalism. “Many scholars and critics are left guessing about large parts of Facebook’s workings, because they are treated as proprietary trade secrets, but Facebook’s power and ubiquity mean that public life depends on creating new forms of oversight and auditing that prevent Facebook from having public power without public accountability.”
These concerns all aim to answer the big question: Will Big Tech fall in line with past industries — Big Oil, Big Tobacco, Big Pharma — which have allowed their bottom line to interfere with the ethical implications of their business operations? Or will they choose to be better?
Last month’s Harvard/Harris public opinion poll indicates that the US is split 50/50 on whether social media content should be regulated as political communication. One thing we can agree on is that the tech industry has incredible potential for good.
But as these private corporations hoard power and call for self-regulation while keeping secret internal operations, suspicions grow that users aren’t given enough information to hold them accountable. The tech hearings have made clear the platforms’ potential for abuse. After November 1st, no tech company can claim ignorance of their power.
“Do the right thing” replaced “Don’t be evil” — Google’s infamous axiom — in 2015 with the creation of Alphabet Inc. But, at this moment in history, both feel insufficient.
Related front page panorama photo credit: Adapted by WhoWhatWhy from signs (G.R.W. / Flickr – CC BY 2.0).
