Facebook, Google, Amazon and other tech giants have become victims of their own success. As they have increased in size and dominance, so too has the pushback. In Europe, they face death by a thousand regulations as governments pressure them over privacy, fake news, tax and unfair competition concerns.
Calls for a break up
In the US, Senator Elizabeth Warren has taken them to task over their enormous power and influence. She explains, “Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy. They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else. And in the process, they have hurt small businesses and stifled innovation.”
Her words have drawn criticism and respect in equal measure. Some suggest that her plan to break up big tech is mired in flaws and ignorance of the tech industry’s inner workings. However, there is evidently a need for something to change. As Warren points out, the sheer size of Amazon, Facebook et al are worrying for smaller players.
The scale of the issue
More than 70% of Internet traffic passes through sites owned or operated by Facebook and Google. Amazon takes the lion’s share of e-commerce traffic. Whilst the tech giants are paying heed to small business owners (Amazon and Facebook both offer Marketplace listings) – it is always on the tech giant’s terms. For the little man, the odds aren’t in their favour.
Which is where Warren’s recommendation to break-up big tech comes in. She suggests cleaving off the platforms from the tech companies, leaving them to run as “platform utilities” separate from the other business. However, critics have stated that this is unworkable and based on “a series of errors and misjudgments.”
Far from the truth
Furthermore, far from stifling innovation, industry experts have explained that big tech is helping to foster it. Google has two funds dedicated solely to machine learning and artificial intelligence (AI) start-ups. In 2017, Amazon spent more than $22 billion on research and development. Without big tech, the progress of AI, image and voice recognition, and autonomous vehicles wouldn’t be nearly as advanced as they are today.
Regulation for the tech sector
Yet, Warren’s recommendations are the first that are tailored to the tech sector. It’s a welcome move, albeit one that required a little more industry knowledge. As Harold Feld, a senior vice president with Public Knowledge acknowledges, “You couldn’t write the piece of legislation tomorrow; real homework has to be done. But these are really the right lines of the debate.”
Politicians’ lack of knowledge
Industry knowledge proves to be a stumbling block for many politicians and legislators. Few can forget the cringeworthy Senate hearing with Mark Zuckerberg. An event that was repeated with Google CEO Sundar Pichai in late 2018.
During his Congress testimony, the CEO repeatedly struggled to answer absurd questions from the House Judiciary Committee that highlighted their lack of tech literacy. On one occasion, an Iowa congressman asked Pichai why unflattering political messages appeared on the congressman’s granddaughter’s iPhone. To which Pichai responded that iPhones were made by Apple, not Google. At this, the congressman asserted that Google likely had a liberal bias due to its headquarters’ location in California.
Unfortunately, with a dearth of tech literacy at the highest levels of government, it’s all too easy for big tech to circumnavigate any incoming legislation.
Collaboration is key
Not that big tech wishes to do this. Indeed, there have been several occasions where the tech giants have extended the hand of collaboration. During his hearing, Zuckerberg mentioned the need for more regulation around Facebook’s data use and privacy. Most U.S. tech companies are willing to accept regulations that will set a uniform standard across America. In a similar format to GDPR’s operation across Europe.
As is competition
Increasing competition is a tactic called-for in the UK. The Report of the Digital Competition Expert Panel recommends steering away from a big tech break up. Instead, it proposes a new regulator who could force tech companies to rewire their operations to become more user-centric. Giving users more control of their data and the ability to switch between providers. It also endorses a modernisation of antitrust rules.
Meanwhile, the European Union’s competition commissioner, Margrethe Vestager has called for a break up to be the last resort.
Time is ticking for big tech
For big tech, the status quo is not going to continue for much longer. Concerns from all corners are driving legislators to stand up and take action. Time will tell what form this action takes.
Right now, tech companies can focus on addressing the worries that led to this point in the first place. That is, managing their relationships and collaborating with governments, to educate them on tech’s benefits and limitations. Building trust with the public, who place the power in legislators’ hands. Finally, in acting ethically and above redress. To use data safely, to innovate and make room for the small guy.
Although the General Data Protection Regulation (GDPR) has clarified data ownership in Europe and the UK, there is still some confusion about data ownership and how to enforce it. As Mike Dougherty, CEO of adtech company Jelli explains, “Under GDPR law, the individual owns the rights to their data, with a few exceptions. They ultimately have the final say, not the company that possesses it — whether obtained through consent or not.”
This is seconded by Julia Stead, VP of Marketing at analytics company Invoca, who explains that tech companies are quick to avoid the thorny issue of data ownership. “Data giants like Google and Facebook are very careful to avoid mentioning ownership in their data collection policies, they focus on collecting and storing user data,” she explains.
Under each interpretation, it appears that the consumer does have ultimate control over their personal data and can make requests… to a certain degree.
Organisations are responsible for data
So, GDPR gives consumers more rights to their personal data. However, once they share it, their control over it lessens and other entities become responsible for it. Companies that use personal data become stewards of it. A position that requires ethical data use and effective data security.
Thus far, organisations haven’t succeeded with this. Data breaches are frighteningly common. Recently, pregnancy club Bounty was fined £400,000 for sharing the personal data of 14 million members with credit reference and marketing agencies. In particular, the company was reprimanded by the Information Commissioner’s Office for selling the information of potentially vulnerable new mothers or mothers-to-be, as well as the birth date of newborns.
Microsoft has recently admitted that hackers gained access to some Outlook users’ emails. Accounts were compromised for three to six months and the company is still to reveal the number of customers affected.
Even the UK Government is not immune. The Home Office has issued an apology for a data breach of EU citizen information. It unwittingly shared the details of 240 people seeking ‘settled’ status post-Brexit. An email to the individuals failed to use the ‘BCC’ box, thus revealing their details to everyone else CC’d into the email communication.
Each case reveals a different way that organisations have failed to use and protect personal data. It highlights how easy it is for companies to fall short when using consumer data. For the public to trust organisations with their personal data, issues like data breaches and hacks must be resolved swiftly. They cannot be as commonplace as they are today.
The data value exchange
Which brings us back to the question of ownership. Because individuals have ultimate ownership of their data but relinquish the protection of it to organisations. They do so in a value exchange: a business gains insights to improve operations and individuals benefit from tailored marketing, product recommendations and so forth.
The pressure on businesses to secure it effectively is only going to grow. Post-Cambridge Analytica, consumer trust is on shaky ground and their expectations are high. Organisations must realise this and meet these expectations. Strong relationships between data owners (consumers) and stewards (organisations) are key to the future of data. If one party doesn’t trust the other, then neither can unlock value from personal data.
Technology leaders hold tremendous power to shape the world in a positive way. Responsible use of technology will support society’s needs and ensure a sustainable future. However, thus far, the irresponsible and unethical use of technology has marred the industry.
Data breaches are a common scandal. In 2018, T-Mobile suffered a data hack that exposed two million customer details including encrypted passwords. British Airways was also hacked, with 380,000 payment details stolen. The scandal left panicked customers scrambling to contact their banks and credit card providers. Recently, hackers published the personal details of thousands of FBI agents and law enforcement officers. Making them and their families vulnerable to attack and potentially blowing their cover. Breaches are a worrying development, with new reports of attacks and leaks surfacing every few weeks.
Scandals that damage trust
Then there is the unethical use of data. Highlighted in the Cambridge Analytica scandal, which resulted in a deep public distrust of data use. Only a fifth of the UK public trust organisations to store and use their data. This has been further weakened by Facebook continuing to share data with third parties without explicit consumer knowledge or consent. Sharing arrangements with 150 organisations were revealed after the Cambridge Analytica scandal. These included retailers, other tech companies, media organisations, publishers and automotive manufacturers.
Time to rebuild the relationship
To rebuild trust in data and the wider tech sector, tech leaders must do more to address consumer concerns. They also have to go a step further, in ensuring sustainable business practices and actively solving society’s most critical issues. 76% of the public want to see CEOs actively driving change in society, instead of waiting for governments to impose it.
Positive uses are overshadowed
Overshadowed by scandal are many positive uses of technology. AI is being used in medical research to detect breast cancer with 99% accuracy, for example. It has potential applications in the circular economy, with AI designing out food waste in supply chains. The estimated value creation from this is estimated at US$127 billion a year by 2030.
Communicating such benefits and positive advances would do a great deal in regaining public trust in the sector.
Concerns around the impact of technology are translating as increased scrutiny and regulation. The EU’s General Data Protection Regulation (GDPR) was introduced to give individuals greater power and ownership of their personal data. Likewise, governments are debating regulations for the sharing economy, gig workers, the policing of online content and breaking up big tech. All are products of technology, with resulting pros and cons.
Hard to predict tech’s impact
Indeed, few tech leaders could have foreseen the long-term implications of Facebook, Uber, Airbnb and Twitter when first founded. We couldn’t have predicted the influence that Facebook would’ve had on the U.S. elections or Brexit voting. Nor could we of envisioned the widespread disruption to the travel and transport industry caused by Uber and Airbnb.
With more advanced developments on the horizon, such as deep learning and autonomous vehicles, the onus is on tech companies to make changes that have a net-positive impact on society. The time is now for technology leaders to ask reflective questions on the use and role of technology. To learn from the unintended outcomes of unhampered technology development and use.
Place humanity at the centre
It is time for humans to be placed squarely in the centre of all tech developments. Not to create newer and more advanced technology to prove that we can. But to develop technology that builds a better world for generations to come.
Oversight and accountability
To achieve this, we need oversight and accountability. This is something that governments are trying to implement. However, they lack the detailed understanding and insight of those within the industry. Therefore, it falls on tech leaders to regulate and hold each other accountable.
Technology should showcase best practice. It must be a symbol of purpose and positive societal progress. In doing so, profits will soon follow. To do the opposite will be to forever undermine the power of technology. We’re in the industry to change the world. Make sure it’s for the greater good.