Threats from tech titans

Wanted: Closer scrutiny of tech bonanza

Two eye-popping revelations tumbled out of America's tech world last month. The first was the news that Equifax, the credit agency, suffered a huge cyberhack that it woefully mishandled, putting the data of 143 million Americans at risk.

The second was the admission by Facebook that it had uncovered at least US$100,000 (S$136,000) worth of advertisements placed on its platform by Russian-backed groups meddling in American elections. It came after news of widespread manipulation by malevolent actors in the social media space.

These scandals may force American politicians in Congress and state legislatures to focus, finally, on what is happening in the weeds of the Internet.

Such scrutiny is desperately overdue. In recent years, America's tech titans such as Facebook, Google and Amazon have exploded in size, profitability and power. What is almost as startling as this ascent is how little debate it prompts in Congress.

True, some left-wing American politicians (such as Senator Bernie Sanders) bemoan the low levels of tax paid by tech groups; right-wing voices complain that social media platforms have been slow to remove extremist Islamist material. But Congress has not held big inquiries into the quasi-monopoly powers that companies such as Facebook and Google hold within their own technology niches, or discussed how tech companies harvest consumer data, curate content or even manage cyber security.

The Equifax scandal revealed that the United States lacks any federal framework to set standards for disclosure of cyberhacks, and until now that state of affairs was barely discussed by politicians.

Why? Lobbying is part of the tale. A decade ago, the dominant lobbyists in Washington were the banks and other financial groups. But today, tech is eclipsing the banks, with companies such as Google near the top of the list of the largest corporate donors. The biggest five tech companies spent around US$49 million on lobbying last year, according to the Centre for Responsive Politics, twice what the biggest five banks spent. Tech groups have also hired an army of former government officials, and poured money into academic foundations.

The Equifax scandal revealed that the United States lacks any federal framework to set standards for disclosure of cyberhacks, and until now that state of affairs was barely discussed by politicians.

That has helped the tech world to deftly play all sides of the political spectrum. Democrats admire Silicon Valley for its progressive stance on issues such as gay rights and immigration reform. Many Republicans like the tech sector's libertarian ideals and business savvy. Meanwhile, almost all politicians tend to view the innovative success of Silicon Valley as a point of national pride. Thus when European regulators criticise Facebook, Amazon or Google, it is often cast as a competitive attack.

There is another way to make sense of this political silence: take an anthropological look at some of the cultural labels attached to tech. If you do that, it is possible to see some powerful parallels with the state of finance a decade ago.

In the early years of this century it was clear that finance in general - and complex products like credit derivatives in particular - were exploding in scale.

But politicians in the US and Europe were uninterested in peering into the financial undergrowth.

This partly reflected deft lobbying by banks, and deliberate opacity.

But the simpler problem was that credit derivatives were swathed in technical language and acronyms and perceived by non-bankers to be utterly boring and dull.

As a result, it felt natural for politicians, journalists and voters to avert their eyes and leave this sector to the geeks. After all, consumers were enjoying a bonanza of cheap mortgages; nobody felt much need to challenge the status quo. It was an area of "social silence", to use the concept developed by the French sociologist and intellectual Pierre Bourdieu; everything was hidden in plain sight.

Of course, the titans of Silicon Valley insist they are saving the world, not sparking a systemic crisis. But the key point is consumers are hooked on cheap (or quasi "free") tech services, as they were hooked on cheap mortgages a decade ago. But few have any idea of how the Internet works, or even care to ask. Once again, we have placed blind trust in geeks.

Let us all hope that Congress now does its job with Facebook and Equifax and organises full-blown hearings and commissions about what went wrong.

Let us also hope the politicians scramble, belatedly, to improve their technical knowledge about the Internet.

But consumers also need to do what they failed to do a decade ago: ask hard questions about what is being hidden in plain sight by the aura of complexity. And then force politicians to act.


A version of this article appeared in the print edition of The Sunday Times on October 01, 2017, with the headline 'Wanted: Closer scrutiny of tech bonanza'. Print Edition | Subscribe