The precipitating event for Silicon Valley’s regulatory reckoning? A change in our political beliefs.
The cascade of political probes targeting the four biggest companies in tech feels like it happened suddenly.
But Washington’s surge in scrutiny toward Google, Amazon, Facebook, and Apple in the past week is a natural culmination of a relationship between tech and society that’s soured over the past two years.
That’s why recent reports that the Department of Justice and Federal Trade Commission are divvying up responsibilities for possible action against the big four — and that legislators had begun a turn-over-every-stone investigation of companies like Facebook and Google — seemed at once both abrupt and a long time coming.
Part of the answer seems to be that beating up on Silicon Valley is suddenly good politics.
It took Wall Street’s subprime mortgage crisis to incite Congress to pass the Dodd-Frank legislation that tried to reform how our country’s financial system worked. And it was only after the Watergate scandal that Washington created the Federal Election Commission to more closely govern campaign finance law. Compared to those scandals, the precipitating event for Silicon Valley’s imminent regulatory reckoning is less of a sudden discovery and more of a slowly building shift in Americans’ political beliefs.
Take the Harris Poll, which surveys Americans on the corporate reputations of various companies. Google’s reputation fell 13 spots in Harris’s most recent poll issued in 2019, one of most precipitous declines in the survey. One of the few companies that saw more reputational damage? Facebook, which fell 43 slots on the 100-company list to be about as popular — or unpopular, depending on how you look at it — as other scandal-plagued companies like Wells Fargo and the Trump Organization.
And when you dive into other survey research, you see that critiques of Google and Facebook are surprisingly bipartisan.
Facebook’s favorability plunged from late 2017 to early 2018, surveys show — a decline driven largely by Democrats and Democratic-leaning independents deciding that they no longer felt positively about the social media giant. Google, Amazon, and Apple also saw their favorability ratings drop in that time period, though not as sharply.
While conservatives typically celebrate big business, Republicans’ critiques of Silicon Valley giants center on accusations of political bias at Facebook, YouTube, and Twitter. Conservatives have harangued tech executives on Capitol Hill over these questions, which they flatly deny.
And Trump has given oxygen to these claims of anti-conservative bias; this month, for instance, the White House launched a new tool for his supporters to report supposed censorship by social media companies.
“Too many Americans have seen their accounts suspended, banned, or fraudulently reported for unclear ‘violations’ of user policies,” the White House said on the tool’s website. “No matter your views, if you suspect political bias caused such an action to be taken against you, share your story with President Trump.”
But, as the polling shows, it is Democrats’ about-face on tech that has led the charge. Democrats, once the party of Silicon Valley’s modern progressivism, now seem just plain exhausted by its excesses. Despite the tech industry’s constant deflection that their platforms are apolitical, progressives have grown increasingly unsatisfied each new revelation of election interference, each new data leak, and each new report of extremist views propagating on these sites.
Sen. Elizabeth Warren, a top Democratic presidential candidate, has made breaking up tech giants core to her bid. That’s forced a larger conversation about their power, with everyone from former Vice President Joe Biden to Sen. Bernie Sanders engaging on this new litmus test.
The politics of attacking tech, however, are not obvious for the Democratic Party even in 2019. Not a single Democratic presidential candidate beyond Warren celebrated the reports of new probes — and the two-dozen candidates either declined or didn’t respond when asked to share a new reaction with Recode. Much of the Democratic establishment, except Warren and Sanders, continues to need to curry favor with Silicon Valley in part to reap its fundraising riches — setting up a delicate tightrope walk.
But it’s a Democrat, Rep. David Cicilline (RI), who is leading a new “top-to-bottom” investigation of tech’s anticompetitive power. In the probe’s announcement on Monday, Cicilline said the “Internet is broken.” That language would be foreign to Barack Obama’s pre-2016 Democratic Party.
“In a lot of ways, there was a reluctance in the early days of the Internet to interfere,” Cicilline said, according to the Washington Post. “It was creating so much value in the lives of people that [some felt] you should get out of the way and allow it to flourish.”
“Over time,” Cicilline said, “people have recognized there are some real dangers here.”
While much political scrutiny has focused on data-capturing giants like Facebook and Google, other tech giants have succumbed to the broader political antipathy toward their industry.
Amazon, increasingly targeted for complaints that its marketplace is anticompetitive and that it underpays and overworks its employees, appears headed for scrutiny from the Federal Trade Commission. While it still offers a widely popular product and has not had any of the ulcer-inducing scandals that Facebook has faced in the past year, it has become a punching bag for both liberal activists who decry its arrogance and for Trump supporters who see Amazon CEO and Washington Post owner Jeff Bezos as an enemy.
Apple has largely escaped the same tightening of the noose. In fact, CEO Tim Cook has at times tried to parlay other tech companies’ struggles to Apple’s advantage — for example, using Facebook as a bogeyman to demonstrate how seriously his company takes privacy. But he, too, should be preparing for a rocky few months, in light of reports that the US Department of Justice is considering its own probe of the company. Competitors like Spotify have attacked the company for its own alleged anticompetitive power, and some app developers said on Tuesday that they were bringing their own lawsuit against Apple on similar grounds.
“With size, I think scrutiny is fair. I think we should be scrutinized,” Cook said Tuesday in an interview with CBS. “I don’t think anybody reasonable is gonna come to the conclusion that Apple’s a monopoly.”
It’s important to keep in mind that just because the executive branch of the government is gearing up for action, that doesn’t necessarily mean that there will be any real consequences for tech’s biggest companies. And news that the DOJ and the FTC are divvying up jurisdiction over these companies doesn’t mean that official investigations will be launched. Nor does it mean that real penalties will be assessed. That’s at least one factor in Congress’s announcement of its own antitrust probe.
“I don’t have a lot of confidence that these agencies will get the job done,” Cicilline said on Monday.
But even if this is purely a political exercise, these tech giants are political beasts that need to remain in the good graces of America’s political establishment. And in 2019, that is likely to be tested.
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Author: Theodore Schleifer