The last days of the tech emperors?

Mr David Cicilline, chairman of the US House Judiciary Committee's antitrust subcommittee, speaking during a hearing on "Online Platforms and Market Power" at Capitol Hill, Washington, last Wednesday. The panel's questions were targeted at Amazon, Ap
Mr David Cicilline, chairman of the US House Judiciary Committee's antitrust subcommittee, speaking during a hearing on "Online Platforms and Market Power" at Capitol Hill, Washington, last Wednesday. The panel's questions were targeted at Amazon, Apple, Google and Facebook. PHOTO: REUTERS

Last Wednesday, Representative David Cicilline, Democrat of Rhode Island and chairman of the House Judiciary Committee's antitrust subcommittee, opened a half-virtual hearing on "Online Platforms and Market Power" with a combative opening statement: "Our founders would not bow before a king. Nor should we bow before the emperors of the online economy."

That set the tone for the hours of sharp questioning of four of the wealthiest people on the planet: Mr Jeff Bezos of Amazon, Mr Tim Cook of Apple, Mr Sundar Pichai of Google and Mr Mark Zuckerberg of Facebook, whose companies have a combined market value roughly equivalent to the GDP of Japan.

Given the history of Silicon Valley's relationship with Washington, the intensity and precision of some subcommittee members' questions were remarkable. It is a sign that significant tech regulation may be closer than we think.

Despite its techno-libertarian image, the tech industry has had close political ties for decades and remarkable success in getting what it wants. In the late 1970s, venture capitalists and semiconductor chief executives got Capitol Hill and the Carter White House to agree to tax cuts and looser financial regulations. In the 1980s, a group of young legislators became such boosters of the industry that they were known as "Atari Democrats". President Ronald Reagan extolled Silicon Valley entrepreneurship and helped tech companies fend off Japanese competition.

The bipartisan love affair intensified in the 1990s as president Bill Clinton and vice-president Al Gore invited tech executives to shape early Internet-era policymaking. Mr Newt Gingrich, then the Republican Speaker of the House, talked up cyberspace and formed close alliances with libertarian-minded tech thinkers.

The lightly regulated online economy we have today is a product of that decade, when Silicon Valley leaders persuaded starry-eyed lawmakers that young, scrappy Internet companies could regulate themselves.

Washington's embrace of tech continued even as questions emerged about the industry's wealth and power. A 2013 Senate hearing to interrogate Mr Cook about Apple's tax avoidance quickly was sidetracked by lawmakers gushing to the chief executive about his company's innovative products. Mr Pichai faced tough questions at a 2018 House Judiciary hearing, but also was showered with praise.

"Google is still the story of the American dream," declared Representative Robert W. Goodlatte of Virginia, the committee's chairman at the time.

Those days seemed a dim memory last Wednesday. Instead, the mood recalled the traffic safety debates of the mid-1960s that helped catalyse significantly more regulation for the auto industry. After a steady drumbeat of studies and some short-lived congressional inquiries, traffic safety exploded into the public consciousness starting with Senate hearings in the summer of 1965, where top auto executives faced sharp questions about their lax approach to safety.

The evening network news programmes showed Mr Robert F. Kennedy, a newly elected senator from New York, grilling the leaders of General Motors about the tiny amount the company spent on safety research. Later that year, a young lawyer advising the Senate committee, Mr Ralph Nader, published a blockbuster expose of the industry, Unsafe At Any Speed. This combination of political and media scrutiny led to passage of the National Traffic and Motor Vehicle Safety Act of 1966, which mandated seat belts and additional car safety features, as well as road improvements like guardrails and traffic barriers.

Wednesday felt like Big Tech's Ralph Nader moment: the pointed questioning by committee members, notably its Democratic women like Representatives Val Demings of Florida, Pramila Jayapal of Washington, Lucy McBath of Georgia and Mary Gay Scanlon of Pennsylvania; the crescendo of investigative journalism that, in part, led to last week's hearing by shining a critical light on Big Tech's practices. And now, this House subcommittee is merely one of several legislative or regulatory bodies considering limits on Big Tech's power.

There are, of course, many reasons tech regulation may not come to pass. The issues at stake are wickedly complex, and quite different for each of these companies, something chief executives sought to underscore in the hearing.

"It appears to me," Mr Bezos observed, "that social media is a nuance-destruction machine, and I don't think that's helpful for a democracy." (Mr Zuckerberg's reaction to that statement sadly was not visible to the audience.) Large tech companies also have prepared for the regulatory onslaught by starting some of the most well-funded lobbying operations in Washington. They learnt a lesson from Microsoft, whose presence in the capital before its antitrust case in 1998 consisted of one employee who worked out of the back of his car because he lacked proper office space.

Although the trial didn't end with Microsoft being ordered to break itself apart, it taught the company that government regulators needed to be taken seriously. And as a result Microsoft tamped down its most aggressive market practices, and escaped much of the years-long policy scrutiny now facing its peers.

Then there is the sticky problem of public opinion. During other seminal moments - carmakers in the 1960s, tobacco in the 1990s - the problems posed by unregulated bigness were clear-cut. Cigarettes killed people. Cars were unsafe.

Tech's consumer dangers are harder to see and acutely feel on an average day: misinformation, an incomplete search result, an unfairly promoted link, privacy erosion, a skewed algorithm.

We may wish we used our smartphones less, or worry about what overuse of social media is doing to our communities and brains. But we still routinely check our Facebook pages, buy apps via Apple, and click "buy" on Amazon Prime. Even if, as some representatives noted, we do so because we have little alternative.

What happens next will depend on many things, including the November election. But last week marks the end of Washington's great love affair with tech, one that helped make these companies' bigness possible in the first place.

NYTIMES

A version of this article appeared in the print edition of The Sunday Times on August 02, 2020, with the headline 'The last days of the tech emperors?'. Print Edition | Subscribe