“If you aren’t paying, you aren’t the customer, you’re the product.” — common Silicon Valley saying.
Maybe you’ve noticed that faint sound of knives sharpening for the big tech companies that have been concentrating their power for years.
There have been two popular books about the subject this year, Jonathan Taplin’s “Move Fast and Break Things: How Facebook, Google and Amazon Cornered Culture and Undermined Democracy,” and “World Without Mind: the Existential Threat of Big Tech” by former New Republic Editor Franklin Foerr, which I haven’t read.
Frankly, after reading Taplin’s book, I’m not sure I can handle another like it without a heavy sedative or at least some blood pressure medication.
“Move Fast” is a brisk read, at turns frightening, infuriating and hopeful, that provides an absorbing, clear-eyed account of the rise of libertarian-minded entrepreneurs who created the dominant monopolies of our time: Google, Amazon and Facebook, which now wield political power on par with Big Oil and Big Pharma.
Not only are these companies radically altering or destroying fields such as journalism, music, movies and retail — soon to come: television, the financial and legal professions among others — but they’re profoundly reshaping our democracy in ways we don’t even fully understand yet. It’s a Wild West out there.
However, their biggest coup may be convincing the average American to believe this techno future, as envisioned by its owners, is unavoidable and in the best interest of innovation. It’s not. Taplin’s book makes a compelling case that we all should be very afraid. Instead of hoping for a moral framework to the digital economy, we should be encouraging the government to crack down with antitrust legislation and stronger protections from the Federal Trade Commission, for starters.
Maybe you don’t mind that all your personal data and online interactions are surveilled and sold from the cradle to the grave. Or that Google and Facebook can force artificially inflated prices for advertising by denying access to their massive customer base, while more than $6 billion in annual online advertisements are fraudulent and viewed only by bots, driving up consumer prices. Or that fake news makes us even more ignorant and influences elections. But you probably do care if your job disappears, gets outsourced or Uberized, and rising inequality and class strife leaves society in chaos.
Oh, but it’s a skills issue, the optimistic techno futurist cries. Get with the program and learn a new tech job. It’s a nice sentiment, except the big tech companies that control the game are not creating nearly enough new jobs, Taplin argues. They’re getting rich off user-generated content with little cost to them and using the massive profits to erect barriers to competition and innovation.
Intellectual property is flowing, unimpeded, from content creators to the owners of monopoly platforms while a winners-take-all ideology dominates Silicon Valley, aided by the usual abuse of monopoly positions, lobbyists and regulatory capture. There’s a revolving door between Google, the White House, and government regulators.
A digital media expert, Taplin has plenty of personal stories. He started out in the 1960s as tour manager for Bob Dylan and the Band then became a movie producer for Martin Scorsese, Wim Wenders and Gus Van Sant, before pioneering one of the first video-on-demand streaming sites. Today he is director emeritus of the Annenberg Innovation Lab at University of Southern California.
Statistics in the book hammer the theme: Google has an 88 percent share in online search and search advertising, Facebook has a 77 percent share in mobile social media, Amazon has 70 percent of the e-book market, and YouTube, owned by Google, has 60 percent of the streaming audio business but contributes only 11 percent of the revenue distributed to creators. In the first quarter of 2016, 85 cents of every new dollar spent online went to Google or Facebook.
American government has always been controlled by financial elites. But Google is perfecting this model by owning the market and setting its prices. Simultaneously, it spends more than $15 million a year on direct lobbying with more than 53 revolving door moves between Google and the White House, plus many more at the Federal Communications Commission and Justice Department.
Taplin explains that monopolists in the digital world enjoy a power those in the physical world do not: They isolate producers from one another, as well as consumers from one another, and discriminate among them.
The author believes we are trapped inside libertarian economic and personal theories created by Milton Friedman and Ayn Rand in the 1950s, as well as the legal philosophies of rejected Supreme Court nominee Robert Bork, without which these companies would be prosecuted under antitrust statutes.
One of the more memorable rogues here is Peter Thiel, founder of PayPal and an early investor in Facebook, a big brain behind the no-regulation, no-taxes, monopolist ideals of Silicon Valley — oh, and an anti-feminist gay man who used to support gay bashing. He secretly financed Hulk Hogan’s lawsuit against Gawker for outing him. This vindictive egomaniac is studying how to increase life spans for billionaires like him who have more money than they could spend in five lifetimes.
The author finds Mark Zuckerberg a more conflicted character, learning on the fly as his privacy norms evolve with a head-scratching, trial-and-error approach to reshaping global media and social norms.
But Taplin’s goal here is not to demonize individuals. It’s to show how the system for major players internalizes and reinforces the rules of a rigged game.
He has a chapter offering ideas for improvements — some more realistic than others. One of the most interesting is exploring whether Google has passed into the realm of a public utility — he draws a parallel to AT&T’s Bell Labs model — and should be required to license every patent it owns for a nominal fee, which would spur innovation, new companies and jobs. This would take an antitrust case likely brought by a state attorney general, he writes, rather than the federal government.
As I write, House and Senate investigators are turning up the heat on Facebook regarding the Russian probe — which may spell a congressional appearance for the company in the future. The news industry already has begun banding together to appeal to federal lawmakers for protection, and Europe is ahead of the game, having levied a $2.7 billion dollar fine on Google for manipulating search engine results.
A recent New York Times opinion piece argues for reallocation of property rights via legislation, such as assigning to Facebook users the ownership of all digital connections they create, a “social graph” that will allow new networks to emerge and Facebook to finally have real competition.
It’s understandable why so many Americans find politics distasteful, but it may be the only thing between us and a surging libertarian utopia, exemplified by the big tech lords, who see no legitimate place for politics and would be fine returning to feudalism as long as those annual 20 percent returns continue for stockholders. S
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