Later this month the four leaders of the world’s most powerful technology companies will testify before Congress as part of the government’s multiple anti-trust investigations. David Cicilline, a Democratic congressman from Rhode Island, will lead the questioning of Jeff Bezos of Amazon, Mark Zuckerberg of Facebook, Sundar Pichai of Google and Tim Cook of Apple. Hopefully, the questioners will do a better job than in past hearings that turned into partisan bickering and questions that displayed the appaling ignorance and show-boating of the questioners. Remember Orin Hatch’s question asking Tim Cook about why his Android phone was not working?
This time the tech companies each have a lot to answer for. Their behaviors have included serious malfeasance in a wide number of areas, not only in anti-competitive behavior, but in some cases, abhorrent behavior that has led to deaths. Here are some of the issues that each will need to answer for, in the order of the company behavior, from worst to less worse.
By far the worst of the bunch is Facebook. It’s in a category of its own for the damage its causing to this country and around the world and its unwillingness to change or moderate its behavior.
Its model -bringing people with like interests together- is a subterfuge to capture each person’s likes and dislikes, prejudices, and preferences. That data is used to bring relevant ads, tailored to every detail it has learned about the user through their engagement on the platform and wherever they have traveled on the web. Advertisers can target its customers more precisely and more efficiently than any other means. To do that, Facebook spies on us and creates a dossier on both members and non-members and then rents out that information to most anyone.
By the nature of its design, it has created a Frankenstein that intentionally puts people with like interests together. Its methodology is based on maximizing retention and how long the user stays engaged. And what engages us is outrage, extreme opinions, and absurdities. These algorithms appeal to our worst instincts. That means it’s not just a benevolent service to keep friends engaged, but one that brings extremists of all sorts together, too. It’s inherent in Facebook’s core design.
How bad is it? Its recommendation engine recently brought a group of far right, Nazi-sympathizers together into a group called Boogaloo, that was responsible for the killing of a security guard in Oakland last month and had organized militias to create havoc during recent Black Lives Matter protests. After months of complaints, they finally removed the relevant groups and members. But Facebook continues to amplify extremist views, promotes falsehoods, and rumors, and even has been responsible for the deaths of protestors in Myanmar.
Its CEO, Mark Zuckerberg continues to be tone deaf and unwilling to moderate its policies to any degree, leading to protests from his own employees. What minor changes they make are done grudgingly and slowly, and mostly for show. Because of their size they have no competition, and what potential competitors they had, such as Instagram, they bought. Whenever a company appears on the scene with some feature they like, they blatantly copy. If there was ever an evil company, it’s Facebook. Their product is more toxic than cigarettes and they answer to no one.
The next company is Google that, along with Facebook, controls most of today’s on-line advertising. Google established itself by developing the best search engine, and developed an advertising model based on knowing everything it could about its users, in order to serve up appropriate ads. If we are searching for shoes, it will show us ads for shoes wherever we travel on the web (sometimes for a year after buying a pair). The problem is it knows too much about us and gains that information in devious ways. While Facebook learns about us by our likes, dislikes, associations and the websites we visit, Google learns about us through the useful products and services, including Google Maps and Gmail, through our searches, and our interactions both online and in the physical world. They’ve even entered into arrangements with health providers to access medical records.
Google is accused of using their monopoly power to promote its own services, favor its own products in search results, and constantly violate our privacy. They’re now trying to acquire Fitbit, the maker of wrist devices that track our activities. They are facing opposition from EU regulators, correctly believing the Google will now have access to our health data and use it to their advantage.
Google does have a positive side, however. While Facebook has little redeeming value and acquires its personal information by providing a dubious service and preying on some of our worst human traits, Google at least provides excellent products and services, such as Maps, Mail, a free equivalent to Office, translation software, and of course, their valuable search engine.
AMAZON
Amazon has been accused of abusing its monopoly position while providing us with services that we want, we love, and we use all of the time. They’ve almost fulfilled the dream of science fiction writers that envisioned transporting physical objects across the country in an instant. They’ve created the biggest online store in the world and a delivery service that could put most of the items on our doorstep in just a day or two. But in doing so, they’ve taken advantage of their position. They’ve enticed independent sellers onto their platform to sell their products and have used the sales data to develop competing products of its own. But because they do such a good job on selling us products, we, the customers, love them. Their behavior is more like a conventional monopolist with an insatiable appetite that too often crosses the line of ethical behavior into one of predatory behavior.
APPLE
Apple, like Amazon, has worked to delight its customers, and their customer loyalty remains higher than nearly any company in the world. But along the way to its success, it’s taken advantages of its position. It exercises close control over the software allowed to be installed on its products, and it takes a large cut (30%) for allowing the software to be sold on its App store, a store that’s a necessary requirement to reach its customers. Basically, if you want to make software for Apple products, you need to play by their rules. And these rules are often arbitrary, discriminatory, and anti-competitive.
Apple decides which products you are allowed to make for its hardware, and controls the servicing of its products. They restrict independent companies from repairing Apple products and determine which parts can be used. It’s akin to AT&T once trying to insure that only their phones could be attached to their phone lines.
In examining these companies, the last three offer services that we, the customer want, we like and provide tangible benefits. The services Facebook offers, a service that is used by billions to connect and communicate, is one that’s a lot less valuable to consumers, and more akin to an addiction. So while all four companies will face congressional scrutiny, much of the interest and attention should be on Facebook’s terrible behavior, wreaking damage around the world, and providing little redeeming value. I terminated my Facebook account over a year, but readily do business with Amazon, Google and Apple. They at least are redeemable.
