How To Get Big Tech To Behave Better

Democrats and Republicans don’t agree on much these days, but many Congressmen, on both sides of the aisle, are united in their hostility to Big Tech. That disdain was on full display July 29, when Amazon’s Jeff Bezos, Apple’s Tim Cook, Google’s Sundar Pichai and Facebook’s Mark Zuckerberg testified via videoconference to the House Judiciary subcommittee on antitrust. 

“As gatekeepers of the digital economy, these platforms enjoy the power to pick winners and losers, to shake down small businesses and enrich themselves while choking off competitors,” said Rep. David Cicilline, a Rhode Island Democrat, in his opening statement.  “Their ability to dictate terms, call the shots, upend entire sectors, and inspire fear, represent the powers of a private government. Our founders would not bow before king, nor should we bow before the emperors of the online economy.”

Republicans were no kinder. Rep. Kelly Armstrong, a Republican from North Dakota, had this to say to Google’s Pichai: “A significant portion of the American public has lost trust in your company. A lack of public confidence in a product usually means there is economic harm to the company, but that just isn’t the case with Google. So I think it’s a legitimate question as to whether Google’s market power insulates it from loss of revenue, normally associated with offending half the people who use your product.”

What’s going on here? Partly, I think, it’s a fundamental confusion of two easily conflated but quite distinct sentiments: respect and trust. And unless our political leaders understand the difference, they’re not going to be able to act in the best interests of Americans. Partly, it was political posturing. In line with their traditional wariness of big business, Democrats wanted to seem tough on Big Tech’s alleged abuses of power. Republicans wanted to push a narrative about online censorship of conservative views. (That’s who Armstrong was referring to as the “half” of people offended by Google.) But beyond the political posturing, legislators will eventually have to decide what action to take, if any, in the best interests of the American people.  When they do, they should carefully consider two easily conflated but quite distinct sentiments: respect and trust. 

Respect these innovators. But don’t trust them.

It is folly to disrespect the Big Four tech executives. They are extremely accomplished. They have established companies that have changed society and how we live. They have pioneered both technical and social innovations that have been widely embraced by virtually all cultures around the world. They implemented and marketed their innovations globally more effectively than their competitors. For those accomplishments, Bezos, Cook, Pichai and Zuckerberg deserve enormous respect. 

Rep. Ken Buck of Colorado did say, “Our witnesses have taken ideas born out of a dorm room, a garage, a warehouse, and built these dreams into four of the biggest power players in the digital global economy.” But such respect at the hearing was rare. That’s too bad, because we should certainly respect them for all they have accomplished. And we ultimately want their awesome capabilities to help America to retain our leadership and now regain our prosperity.

But we should not trust them. They do not act completely in overall best interest of Americans. They cannot. As Jeff Bezos said in the hearing, “We promote our own products.” Translation: “We act in our own best interest.” 

The real reason we should not trust the Big Four is because they stymy innovation. The ironic thing is that they have not stymied innovation in the way they are be accused. Zuckerberg did not stymy innovation when he handed over one billion dollars to the founders of Instagram and them poured billions more into building out the platform. That was good for everyone involved. And he did not stymy innovation when he mentioned that competition would heat up if they didn’t team. Anyone in Zuckerberg’s position would have done the same; it’s just the truth of how competition works. 

The problem of trust actually comes in mitigating the unintended consequences of their innovations. We need innovation to mitigate the election meddling, trolling, hate speech, and pornography that arose from Big Tech businesses.  This is the innovation they are stymying. Unintended consequences of new technologies aren’t a new phenomenon. Walmart’s supply chain innovations decimated the commercial centers of many U.S. small towns late last century and Ford’s triggered major new sources of pollution. We’re still grappling with these problems because Big Tech, as well as Walmart and Ford do not want to mitigate their innovations—and they certainly do not want to encourage others to do so. 

Requiring the Big Four to fix their own problems through regulation and consent decrees hasn’t worked too well in the past. It can’t. Fixing problems peripheral to the objectives of a company is too distracting and costly and it creates potential rivals. Microsoft stymied computer tool developers, AT&T stifled innovation in communications, IBM tried to do so with early computers, Boeing did so with its United Airlines, RCA with radio. Once an enterprise dominates a market it wants to stymy the innovation of entrepreneurs so they can slow down their own investments in innovation. It’s not that innovation goes to zero, it’s just that innovation gets focused in only a few areas where profits can grow. Efforts to mitigate past problems are at best miserly and half-hearted. Google and Facebook recently received big fines for their lack of compliance of their consent decrees requiring them to beef up privacy. 

The other historical solution has been to break up the company because the founders cannot be trusted. It will be an expensive time-consuming long-shot trying to use existing antiquated antitrust legislation to go after the Big Four. Right now, the public loves their smartphones, wants to stay connected with Facebook, relies upon Google to find information (even misleading information), and could not live without Amazon delivering to their doors. As Bezos testified, “Our approach is working. Eighty percent of Americans have a favorable impression of Amazon overall. Who do Americans trust more than Amazon to do the right thing? Only their doctors and the military.” Anti-trust legislation is targeted at preventing customers from being abused, and that’s not the case now. The Big Four deserve to be respected for delivering value to their customers.

If we want to actually figure out how to eliminate election meddling, or online bullying and trolling, or privacy from advertising in search, or any number of unintended consequences, we will need to give entrepreneurs—not just Big Four employees—opportunity and incentives to develop solutions to these problems. We cannot trust the Big Four to effectively lead the efforts to mitigate the problems they cause.

The solutions lie in requiring the Big Four to give access to third party developers to their code. Open-source software is now an established, stable, effective way to improve the efficacy of software platforms. Not any piece of software makes it “into production” (i.e., becomes part of the software consumers actually use), consumers only use software that has been peer-reviewed and peer tested for being effective, efficient, and bug-free. For example, third parties should be able to experiment on Google and Facebook off-line code to find better ways to detect and filter hate speech and on-line bullying. Entrepreneurs that develop more effective mitigations than in-house employees should receive a bonus and lucrative fees for non-exclusive licenses.

In the case of Amazon and Apple’s potential to abuse third party vendors, they should be required to set up these businesses as separate auditable entities to make them more transparent. Third party vendors are customers too and creating entities with public records will make them accountable for their actions and less able to hide unfair practices and huge profit margins within a larger abstruse enterprise.

New legislation is required to make the Big Four let other entrepreneurs have access to their monopoly platforms. But Congress is confusing trust with respect and is therefore not able to identify the real issue by treating the Big Four executives as if they were incompetent and did not deserve respect. Disrespecting these executives leads members of congress to think they must rely on past legislative structures to solve problems they do not understand. The solution lies in enabling third-party entrepreneurs to have access to the Big Four platforms so they can work on fixing all the unintended consequences of the new technologies we so dearly love.