Big Data, Big Power: Who Can Rein in the Internet Giants?

The amount of information that the internet giants have about the billions of people using their services is unprecedented in human history. The question is, what will they do with it?

File photo: Facebook CEO Mark Zuckerberg in Chicago on June 21, 2017
Nam Y. Huh/AP

There’s a smell of blood in the water. The water is Silicon Valley and the smell is coming from people who earlier seemed not only invincible but safe from criticism.

There have been many signals that sentiment in Silicon Valley is changing. One is insiders such as Napster founder Sean Parker starting to talk. Parker founded the music file-sharing site in 1999 and sold it in 2008. In 2004, he began advising Facebook.

“The thought process that went into building these applications, Facebook being the first of them, ... was all about: ‘How do we consume as much of your time and conscious attention as possible? ’” he said to the news site Axios on November 9, 2017. The answer: to “sort of give you a little dopamine hit every once in a while, because someone liked or commented on a photo or a post or whatever. And that’s going to get you to contribute more content, and that’s going to get you ... more likes and comments. ... The inventors, creators – it’s me, it’s Mark [Zuckerberg] ... – understood this consciously. And we did it anyway.” https://www.axios.com/sean-parker-unloads-on-facebook-god-only-knows-what-its-doing-to-our-childrens-brains-1513306792-f855e7b4-4e99-4d60-8d51-2775559c2671.html

By that time, numerous studies had been published on the social implications of social networks such as Facebook. Almost all http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0166999 were negative, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4183915/ with one paper suggesting that social media was “in effect turning us into one of the most antisocial generations.” https://scholarcommons.scu.edu/cgi/viewcontent.cgi?article=1002&context=engl_176

But when it’s people from within Facebook who start talking, we’ve evidently entered a new phase. The glass dome shielding the Silicon Valley bosses is cracking.

Kent Walker, vice president and general counsel with Google Inc., from right, Colin Stretch, general counsel with Facebook Inc., and Sean Edgett, acting general counsel with Twitter Inc., swear in to a House Intelligence Committee hearing in Washington, D.C., U.S., on Wednesday, Nov. 1, 2017.
Andrew Harrer/Bloomberg

Chamath Palihapitiya, a Facebook VP who left the company to start a venture capital firm, said at an event at Stanford University last month, “It literally is a point now where I think we have created tools that are ripping apart the social fabric of how society works.” http://www.chicagotribune.com/bluesky/technology/ct-facebook-vp-social-media-destroying-society-20171212-story.html

Shortly before the attacks on Facebook from its former executives, three of the top people from the biggest companies in Silicon Valley were humiliated at a Senate Judiciary Committee hearing. http://www.businessinsider.com/one-sentence-from-the-senates-social-media-hearing-should-terrify-google-facebook-and-twitter-2017-10

Until 2017, the internet giants were one of the great American success stories and politicians competed to praise them. President Barack Obama, a darling of Silicon Valley, led the chorus of applause. Then representatives of Facebook, Google and Twitter were summoned to the Senate hearing following reports that anonymous Russian actors ran ads on Facebook to influence the 2016 U.S. presidential election. Usually the CEOs of these companies like the spotlight, but for this one, they sent their lawyers.

Just as well: Nothing in recent years had prepared the companies for the kind of questions and treatment they received in Washington. The senators crucified them. The companies’ representatives had trouble giving answers that could evoke trust, their distress palpable in their body language.

For the Silicon Valley giants, 2017 was the worst year ever, but they may not realize that it actually marked the end of an era. More and more people are looking at them differently.

Silicon Valley remains a giant bubble, peopled by engineers and mathematicians and physicists and MBAs who really believe they’re doing God’s work and creating vast value for the world, and that the rest of the world, mainly politicians, should just stay out of their way. Americans call it “drinking the Kool-Aid.” A lot of the people at these companies drink their own Kool-Aid and don’t care what’s going on outside their bubble.

Among the first to face public excoriation was Facebook https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4926056/: The first barrages against the company were spurred by the combination of President Donald Trump’s use of the internet, the Russians’ use of the network for propaganda purposes and the understanding that it was used to distribute fake news. Subsequently, more and more psychological https://www.ncbi.nlm.nih.gov/pubmed/22016701/ and medical research began to accumulate on social media addiction and the damage it can do. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5369147/

Last summer, European antitrust officials fined Google $3 billion for abusing its monopolistic power by unfairly favoring some of its own services over those of rivals https://www.nytimes.com/2017/06/27/technology/eu-google-fine.html?_r=0. A year earlier, the European commission ordered Apple to pay 13 billion euros in back taxes to Ireland, ruling that its tax deal with the Irish authorities was illegal. https://www.theguardian.com/business/2016/aug/30/apple-pay-back-taxes-eu-ruling-ireland-state-aid

What we see is the tip of the iceberg. The power of the internet giants poses far greater challenges to governments, societies and economies around the world than their marketing techniques or their ability to disseminate fake news. The most significant threat is the unprecedented scope of information these mega-companies possess.

We know it but we don’t dwell on it. Almost everything we do nowadays leaves an electronic record in the hands of Google, Facebook, Amazon, Apple, Microsoft and their subsidiaries. If you think you’re not using their services because you only use YouTube, Whatsapp, Instagram or LinkedIn, you have forgotten that all four belong to Google, Facebook and Microsoft.

They always know what you’re doing

The digital platforms ceaselessly gather information on us. Four years ago Facebook bought the Israeli startup Onavo. Israeli papers reported that Onavo made tools to track traffic on internet. But last year The Wall Street Journal revealed that its technology enables Facebook to monitor the behavior of tens of millions of users around the world (but mainly in the U.S.) in real time, even when they’re not using Facebook, Instagram or Whatsapp.

The amount of information these companies have about the 2 or 3 billion people using their services is unprecedented in human history. It all happened in less than a decade, exploding in the last five years as their applications became part of billions of people’s daily routine thanks to the superb services they have developed or acquired.

How many times did you check your smartphone in the last 24 hours? Probably between 100 and 200 times – that’s the global statistic. You probably checked email, Whatsapp, Facebook, Instagram or Twitter. The apps keep records of everything we do: where we go, what we buy and what we talk about with our friends.

In Google’s case, it’s not just what we did but what we’re going to do. There’s almost no action we take that does not begin with Google search. They know everything about us.

How will these companies use this trove of information? Each country has privacy laws. Most of us have no idea what these privacy laws are and simply click “Agree” every time we install a new app. Some of us become more wary about the loss of privacy after noticing ads based on our past behavior online.

But the real power of these platforms isn’t just in specific user information that they can sell or use to direct advertising; it’s the aggregate information on the public. Google and Facebook have more information than any ever government ever did on how people behave. This information, which increases exponentially because of the growing use of their services and their improving storage abilities, can bring cultural, economic and political insights. Their use of cloud storage means that every action taken by billions of people is always accessible to them.

Who has the power?

Artificial intelligence is a fast-developing field. Who has more power, the one who has better AI or more advanced algorithms, or the one who owns more information? Apparently, big data will always beat algorithms, so the power will remain with the five internet giants rather than become dispersed among small software developers. The power is in the data.

George Orwell’s dystopian vision of Big Brother is remarkably accurate, but relatively modest. Orwell didn’t anticipate that billions of people around Earth, hooked up to a network, would hand over their most intimate information, willingly throwing themselves into the arms of a few companies. Orwell didn’t foresee billions of people telling the makers of navigation software where they are and where they’re going.

They say children are less bothered by privacy issues and don’t care if Apple, Facebook, Google or Amazon have their information. But maybe one day they’ll realize this information can be used against them. A few major break-ins that would expose private messages to the world could change that.

Western governments have a dilemma. American politicians are starting to wonder whether the companies’ wings shouldn’t be clipped because of their ability to influence critical markets. But the government also views these companies as national champions in their battle against other sovereigns, not just China and Russia but also Germany and Britain. Facebook, Amazon, Google and Apple aren’t just businesses but American companies that Washington views as strategic assets. The Russians and Chinese view their internet giants the same way (and are increasingly constraining any advent by the American ones).

In China and Russia, it’s clear that the governments use the local internet companies to advance their strategic interests, but in the U.S., the situation is more complicated. Who has the power? The government or the internet companies?

Formally, the government, which lays down the law, can summon the corporate chiefs before it for a lashing. But in practice, corporate America has vast influence on the government, and some believe it’s been growing over the last 20 years.

Some years ago, in a debate on banking regulation, Senator Dick Durbin of Illinois remarked, “they frankly own the place” – meaning Capitol Hill. Today the five internet giants have more power than the banks had then, not least because they’ve passed the banks in market cap. They also own information the banks never had.

Mark Zuckerberg, Sergey Brin and Jeff Bezos have all been portrayed as daring young people making the world a better place. That view has changed. They’re not a gaggle of geeks anymore but a small group of people with unprecedented power, which they could use for good or for bad. Such a concentration of power and information can invite abuse. Can the institutions of Western democracy handle these forces? Can the counterforces in business or in civil society?

It seems to me that these are the most important questions facing leaders, scientists and public figures. Unfortunately, the main way to disseminate articles on the topic is by these very platforms. Could the day come when journalists or anyone with inconvenient information find themselves muted or marginalized? We may all need to work together to prevent it. Because the closer we get to that moment, the harder it will be to build the political wherewithal to lay down rules of the game, regulations and laws that will constrain the vast power of these terrific companies.