Business

Can Big Tech be tamed? And can we trust those doing the taming?

Western political leaders must sometimes wish they were Chinese. Then they could deal with the giant technology companies without pesky legislatures, with nary a nod to the law and through a handful of withering denunciations delivered by the organs of government. Instead prime ministers and chancellors can only dream of the powers available to a party general secretary.

That’s a dilemma examined in the latest set of books about powerful and globally active tech behemoths. These books illustrate the nuances and complexities posed by the emergence — in order of longevity — of Apple, Amazon, Netflix, Google and Facebook.

The sheer scale and speed of their success has stoked concerns about seemingly boundless power and influence. Sixteenth-century monarchs accustomed to wrestling with their overmighty subjects — uppity barons, conniving dukes, or sermonising priests — would have sympathy for politicians trying to tame these digital empires.

Yet today’s overmighty subjects will be quick to say that they have opened up the world and expanded horizons for billions of people who can now educate, inform and entertain themselves more easily than ever before.

They might also feel that governments are hardly much of an example when politicians seem more familiar with the plough than a “like” button, when US agencies tap the phones of allies, spend over $100m on the operating manual for a new presidential aircraft and cannot build a website capable of handling a new healthcare program.

The uneasy rulers will just as readily point out that the overmighty subjects control companies that spread malicious falsehoods, undermine democracy, trample rudely on competitors and manipulate pricing while scouring the world for friendly tax jurisdictions. Politicians who, in the aftermath of the 2008 financial crisis, decided that some banks were too big to fail are now of the mind that some tech companies are too big to stomach.

In pursuit of what makes for a powerful and successful tech company, The Platform Delusion by Jonathan A Knee opts for the broad scope. The former investment banker turned college professor ranges across areas from leadership to the value of a disparate portfolio, the regulatory environment and the mystique of a corporate brand able to intimidate would-be competitors. It’s clear that his sympathies lie with the large tech companies and his admiration for their commercial success is evident.

Facebook’s Mark Zuckerberg testifies via video at a US Congress committee hearing on July 29 2020 © Graeme Jennings/pool via CNP

He posits that it took more than a captivating proposition to build and maintain the globe-girdling US tech platforms or networks. Well, blow me down. Knee digs a deeper hole for himself by trying to argue that size does not confer automatic advantages, but fails to make the case. Sadly, this reads like a hasty assembly of lectures that skirts the central issue of our times: the battle royale playing out between the tech universe and the political world.

By contrast, An Ugly Truth, by journalists Sheera Frenkel and Cecilia Kang, is at pains to unearth original — frequently fascinating — material that I suspect the PR departments of Facebook and Amazon would have preferred to remain hidden. As such it complements Brad Stone’s Amazon Unbound, published earlier this year, in illustrating how the law and, in some cases, popularly accepted economic doctrine has failed to keep pace with the tech companies. No wonder that chief executives are often forced into the uncomfortable position of being judge, jury and censor.

While politicians have a short list of readily identifiable targets, armies of lawyers and thousands of pages of case laws at their disposal, imagine the view from the other side. The leader of a tech company has few clues about the timing, direction or weight of an incoming missile launched from the dais of the EU or White House briefing room, an attorney-general in a re-election fight or scores of regulatory bodies — which, for a global business, number in the hundreds.

Yet the overmighty subjects have advantages that no elected leader possesses. Their companies operate with far greater speed and agility than any legislative body. They also have a secret weapon — longevity. They can plan and operate for the long-term and often ride out unfavourable political winds. Since Jeff Bezos formed Amazon in 1994, there have been five US presidents, 18 permanent or acting attorneys-general, 11 chairs of the Federal Trade Commission and 10 Treasury secretaries. If a company had that sort of leadership turnover, it would never accomplish anything.

Still, entrepreneurial accomplishment comes at a cost, as Frenkel and Kang argue in their absorbing book. They look at Facebook’s past five years and its attempts — frequently belated, often ambiguous — to deal with the way that state actors (Russia et al), hoodlums (such as the Proud Boys), politicians (a list too long to cite) and advertisers, especially political advertisers, have used this free, global, digital pulpit to sway elections, foster hate and disseminate falsehoods. Life is not easy when your platform, often a force for good, also gives licence to the rants, obscenities, falsehoods and mischief of crackpots, crooks and spies.

The desire of Facebook’s chief executive Mark Zuckerberg to create a “fifth estate”, where citizens decide for themselves what to believe, looks either hopelessly romantic or commercially cynical. Either way, the authors portray a company whose engineers and employees have been engaged in continuous rearguard actions rather than devoting energy to the activities that make life stimulating — fresh products, bold ideas and a zesty essence.

One ironic footnote to today’s contretemps is the relative absence of Microsoft, which, just 20 years ago, was the scourge of competitors and politicians around the world when its reach was considered so vast, its supposed malevolence so deeply ingrained that it was deemed unstoppable and capable of flattening anything in its path. Today’s worrywarts might draw some consolation from history.

Even though the US government’s antitrust suit against Microsoft ultimately failed, the mere whiff of federal action hobbled the company’s management, who subsequently had to check any significant move with rafts of lawyers and fret about the wording of every email. Rumbles from Washington and Brussels are far more debilitating to a Big Tech company than regular multibillion dollar fines, which nowadays in Silicon Valley seem like just another cost of doing business.

The way Microsoft has avoided getting ensnared in today’s political battles is just part of the turnabout in its fortunes engineered by Satya Nadella who, since he took charge in 2014, has more that sextupled its value some $2.1tn. Today’s tech giants — many of whom did not even exist (or were fragile) when Bill Gates ran afoul of the regulators and yet are now worth more than Microsoft — would do well to take note.

More broadly, I cannot help but wonder whether tech founders need to burnish their diplomatic skills and whether politicians in the US, instead of railing against the tech companies, should direct their energy towards the impoverished nature of America’s public schools and firing up basic research. Properly directed, these initiatives are almost guaranteed to create a new crop of powerful companies. For in business, as in life, a youthful disposition always triumphs.

The Platform Delusion: Who Wins and Who Loses in the Age of Tech Titans by Jonathan A Knee, Penguin Portfolio, $28, 272 pages

An Ugly Truth: Inside Facebook’s Battle for Domination by Sheera Frenkel and Cecilia Kang, The Bridge Street Press, £20/ Harper, $26.99, 352 pages

The writer is a partner at Sequoia Capital. The views expressed are his own


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