How To Tame the Tech Titans (economist.com)

dryriver shares an opinion piece from The Economist: Not long ago, being the boss of a big Western tech firm was a dream job. As the billions rolled in, so did the plaudits: Google, Facebook, Amazon and others were making the world a better place. Today these companies are accused of being BAADD -- big, anti-competitive, addictive and destructive to democracy. Regulators fine them, politicians grill them and one-time backers warn of their power to cause harm. Much of this techlash is misguided. The presumption that big businesses must necessarily be wicked is plain wrong. Apple is to be admired as the world's most valuable listed company for the simple reason that it makes things people want to buy, even while facing fierce competition. Many online services would be worse if their providers were smaller. Evidence for the link between smartphones and unhappiness is weak. Fake news is not only an online phenomenon.

But big tech platforms, particularly Facebook, Google and Amazon, do indeed raise a worry about fair competition. That is partly because they often benefit from legal exemptions. Unlike publishers, Facebook and Google are rarely held responsible for what users do on them; and for years most American buyers on Amazon did not pay sales tax. Nor do the titans simply compete in a market. Increasingly, they are the market itself, providing the infrastructure (or "platforms") for much of the digital economy. Many of their services appear to be free, but users "pay" for them by giving away their data. Powerful though they already are, their huge stockmarket valuations suggest that investors are counting on them to double or even triple in size in the next decade. There is thus a justified fear that the tech titans will use their power to protect and extend their dominance, to the detriment of consumers (see article). The tricky task for policymakers is to restrain them without unduly stifling innovation.

Comments

Make Tax Rates Scale With Size

[NicknameUnavailable]

There's no reason for a company like Google to even exist (or more recently, a company like Alphabet - the whole concept of umbrella corporations are a prime example of the BAADD acronym used.) If a company is with over 9 figures in a modern-day valuation they should simply be nationalized (and I'm far from a liberal, full-blown Trump supporter with zero regrets thus far, so please keep that in mind because I know that idea goes against the party divide pretty significantly.) This isn't to say the government should exist to fund other nations or wage wars (that we start,) but if a corporation makes it to that level it can only mean that they are gutting consumers, at which point the government can't really do much worse and it's a damned-good deterrent.

Re:Make Tax Rates Scale With Size

[Anonymous Coward]

The tech giants have greased so many politicians that it is difficult to imagine the federal government taking anti-trust actions if and when it makes sense to do so.

According to OpenSecrets, the Technology sector is ranked #4 and #1 Pharmaceuticals/Health lobbying is off the chart:
https://www.opensecrets.org/lobby/top.php?indexType=i&showYear=a

Re:Make Tax Rates Scale With Size

[NicknameUnavailable]

In other words, your contribution is about Identity Politics. You don't like Google so they shouldn't get the benefits of Trump's tax bill.

While Google are among the apex of parasitic marketing people claiming to be nerds, you'd have to be functionally retarded to interpret "a company worth more than 9 figures" as "limited to Google."

Re:Make Tax Rates Scale With Size

[Anonymous Coward]

Your logic is faulty - you're assuming that the only way a company can get big is by ripping people off which is simply not true. So many companies got big by selling revolutionary products that changed the world.

Re:Make Tax Rates Scale With Size

[ShanghaiBill]

you'd have to be functionally retarded to interpret "a company worth more than 9 figures" as "limited to Google."

If "more than 9 figures" means more than $999,999,999, then there are several thousand corporations just in America.

The bottom company in the S&P 500 is worth $3.6B.

Disclaimer: I think the idea of nationalizing these companies is insane. I trust Google way more than I trust the NSA.

Re:Make Tax Rates Scale With Size

[NicknameUnavailable]

A) You are the product, you aren't using Google Maps, Google is using you and you're too dim to see it. B) Multiple corporations fucking their customers doesn't mean the one with the best consolidation and therefore best pricing isn't doing so, it just means they're more efficient at doing so to more people. C) We aren't a global economy, we have never been a global economy, and most other nations hate us - only Americans count.

Re:Make Tax Rates Scale With Size

[esonik]

You are providing free data to Google who sells it to companies who need to pay advertising. So you pay Google through the products you buy from companies that do online advertising.
The "Google ecosystem" is just a honeypot to get your data.
Same story for Facebook.
The business model of these (and many other "tech" companies) is to squeeze in between customers and sellers by luring away consumers and then charging the sellers for getting them back.
Seth Godin as explained it nicely here: http://sethgodin.typepad.com/s...

Re:Make Tax Rates Scale With Size

[chapstercni]

I'm one of those people that think the market should set the price. Say Apple prices their new iPhone at $1000 or whatever, what's the problem? If the end consumer wants the phone, they will pay. If it is too much, they will not.

Now, stepping back from this focus on this transaction is the question, "How could they price this hardware for this much?"

In my opinion, it comes back to the government in multiple ways facilitating this. From out of control patents, a really wacked legal system, etc, etc.

So, it isn't swindling, but I'd be delighted to eliminate the legal construct of "corporation" immediately and then proceed to dismantle a lot of the other problems.

Re:Make Tax Rates Scale With Size

[mapkinase]

Yes. Thanks for formulating this. That's basically the essence of healthy part of Marxist approach to the problem of rapid evolution of capitalism to imperialism.

Imperialism already eliminated competition, so socialism (nationalization) won't hurt anybody.

BTW, besides these two choices there is a niche of "utility" company: regulated much more heavier than the normal company, but not as unmotivated as the government.

Theoretically, one can imagine in a well-govern country a regulation that can significantly optimize the performance of a "utility" company making it to perform noticeably better than both Old Wild West company and government department.

Re: Make Tax Rates Scale With Size

[NicknameUnavailable]

Every oil company in existence.

Yeah, amazing how they got to a worldwide consortium/monopoly only to use the excess funds from gutting their consumers to lobby worldwide against alternative energies, kill private inventors, fund terrorism across the globe, build unsustainable cities on sand dunes with islands that need to constantly be supplied with new sand least the city drowns, and resulted in nonstop war over decades with every nation with even the smallest hint of power involved to try to break the monopoly. That totally didn't fleece the customers, oh wait, that's probably the single worst example you could have given. Did you just forget the "/s"

Re:Make Tax Rates Scale With Size

[Anonymous Coward]

Personally, I think that would break "our democracy" far more than allowing companies to make arguments for their desires.

1.) 'Our democracy' is comprised of 'We the People'. Companies ARE NOT PEOPLE. Therefore, companies should have no right to a voice or opinion. Citizens United was, I think, the worst SCOTUS decision in my lifetime. The decision revolved around the 1st amendment but personhood is personhood. Think of the ramifications of a company, as a 'person', using Citizens United to make arguments revolved around the following amendments: 2nd, 4th, 5th, 6th, 7th, 8th, 11th, 15th (think creatively), 19th (think creatively).

2.) Companies employ and are owned by people. Each one has an individual right to a voice and opinion. If a company has say 1000 employees and say 100 shareholders, those 1100 people already have a voice in the form of 1100 votes in the ballet box.

Poor thinking

[Tailhook]

Apple is to be admired ... for the simple reason that it makes things people want to buy

So do meth cooks. And like those scofflaws Apple bends a lot of rules and fosters a lot of bad shit in this world. They don't get absolution just because they're cool.

The Problem

[duke_cheetah2003]

The presumption that big businesses must necessarily be wicked is plain wrong.

This presumption is accurate. Corporations are required by law to make money. Share holders can exact retribution if they don't. People lose their job if they fail to steer their company in a growing profitable manner, regardless of whatever else.

Once these companies 'go public', they are beholden to the share holders to give a return on their investment. The ever increasing demand for more profits, more growth, well, it's what turns good ideas into evil entities we despise.

If company's goals were things like do X better for society, discover Y, provide Z service to the best of your ability, things might be better, but that's not how it is. Every company has the same goal: Make more money for their share holders. Period. Every other consideration is secondary.

Every corporation I've ever seen has done one of two things: Get bigger, or disappear.

Re:The Problem

[thinkwaitfast]

Making money is not 'wicked'. I worked for a company that did not make money and they wound up firing hundreds of people including a lot of engineers before going out of business. I quit five years before that happened, but the writing was on the wall.

Re:The Problem

[Actually, I do RTFA]

That's an oversimplification. They have to live up to their charter/stated aims. Pre-1970s, it was common for the board to consider effect on the towns they live in, etc. Heck, there's no reason that we as society should allow "just make profit" as a valid mission statement.

Re:The Problem

[mapkinase]

It's not "wicked". It's "unrelated to common good". Unrelated as unit vectors in a million-dimiension space.

There is "common good" and there is a "private good" or "group good". The fundamental hypothesis of libertarians and brain-dead Aynrandianistas is that somehow magically a combination of "group goods" leads to "common good".

Re:The Problem

[swillden]

Corporations are required by law to make money. Share holders can exact retribution if they don't..

Impressive. Not many people can pack so much factual error into so few words.

First error is that corporations are required by law to make money. They are not. They are required to fulfill the aims laid out in their corporate charter, IPO statements and other promises to shareholders. There are, in fact, several corporations in existence (mostly "activist" investment funds) whose explicit goals are social or environmental in nature. Their share holders could exact retribution for making money the wrong way, or, if their goals turn out to be incompatible with making money, for making it at all. Google is an interesting case here, because its IPO documents say quite a bit about social responsibility as part of the justification for the distinction between the common and preferred stock issuance that allowed Google's founders to retain voting control (if Page, Brin and Schmidt vote together, they outvote all the rest of the shareholders put together).

Second error is that shareholders exact retribution if corporations fail to pursue their stated goals. In theory you're actually correct here. In practice, can you find a single example of share holders doing this that wasn't due to simple malfeasance?

Third is the implicit assumption that focusing on making money always leads to negative decisions. In fact, more often than not it's exactly the opposite because the very best way to make lots of money is to make and sell something people want at a price they want to pay for it. In other words, provide a public good. Where focus on profits often does lead to evil decisions is when companies' products are not doing well in the marketplace, so execs become desperate to squeeze a little more wherever they can. Companies that are awash in money and growing rapidly rarely have any need to do this.

Remember what "lobbying" was called ...

[Anonymous Coward]

... back in he days:

TREASON.
20 years prison. Maximum sentence.
For both the politician ("representative") and the "lobbyist".

And the second I have the power to make it so, that will happen. Retroactively for the last 150 years.

Opinion piece and garbage at that.

[Gravis Zero]

Wow, this is a load of horseshit. He's discounting science and calling it "fake news", why? Simple, it doesn't fit the narrative that he's trying to sell you.

Evidence for the link between smartphones and unhappiness is weak. Fake news is not only an online phenomenon.

I can tell you for a fact that adults addicted to their smartphones just kinda check out of being parents and only do the most superficial component of parenting. They aren't neglecting their children but they also aren't involved in their lives in any meaningful way. There's a new generation of children being raised by zombie parents because of these damn machines and it's going to lead to an increasingly and strangely fucked up future for society. These devices could be great tools but there is far more profit in making money off of neurohacking people which results in screen zombies.

It's ultimately up to the individual to decide how they live their lives but there is nobody warning them about the danger smartphones present.

Too big

[Tablizer]

Many online services would be worse if their providers were smaller.

Bullshit. If there are a larger quantity of providers, they compete harder and customers have more choice. Japan had 7 viable car companies that kicked the ass of our 3 in the 80's.

The only place I see it being a problem is cross-country coverage. But the co's can make roaming deals with other carriers.

Oligopolies consistently have the worse customer service in surveys among different products that have fell under oligopolies/monopolies.

Re:Too big

[Tablizer]

Turns out, we kept our markets open to Japanese cars while the Japanese were free to close their market to our cars. Totally unfair.

They did at first, in order to allow their local companies to get a footing. But now the real problem is that US cars don't sell well there because they are too big and not reliable enough. Japan has narrow roads. Plus, you need a certain sales volume to make service routine.

not tech

[Tom]

This is not about tech companies. There is a general problem with the way our system is set up whenever a company (representing the desire to make money) is large and powerful enough to make demands from a government (representing the diverse needs of the people).

Whenever one desire can subdue all other desires, you have something we call addiction in psychology. And the general agreement is that it's a bad thing, unhealthy for the whole organism.

View societies as organisms (living systems theory, in case you are into such fields) and many faults of our system become painfully obvious.

Re:Don't kill the goose laying the golden eggs?

[JaredOfEuropa]

The US is listed as having a tax burden of around 25% of GDP. Most EU countries have rates in the 40s, with Scandinavian countries in the 50s. Count your blessings
The US do have a very high corporate tax. And there's the problem: small businesses end up paying a serious chunk of their income in taxes, while big corporation can fiddle with overseas income and "license fees for IP", thus ending up paying very, very little.

You're mistaken about the EU, by the way. They do fine domestic companies.
- Daimler was fined €1 billion in an antitrust case, in the same case other auto makers like Volvo and DAF were fined a total additional €1.9 billion.
- Glass manufacturers such as Pilkington and Saint-Gobain received fines totaling €1.35 billion.
- Telefonica: €150 million

Fairness is an illusion

[davide marney]

The greatest thing about capitalism is that it fully embraces the unfairness of life, and in fact, uses it to produce something worthy.

There are haves and have-nots. This goes far beyond mere money. Life is completely unfair, top to bottom. But in a capitalist society, it doesn't have to stay that way. A have-not can become rich by mass-providing something that the rich have to all his fellow have-nots.

Just two generations ago, the ability to quickly research something and gain an insight that might give you a competitive edge was limited to people with access to research libraries and experts. Today we have the Internet. Yes, the Internet is full of sludge, but that's only on its bottom. What runs on top is extraordinarily valuable information. And all that value now rests in the palm of everyone's hand.

Government funded the research phase of the Internet, and it was a spectacularly good investment. But it's only in hindsight that we can say that, only after capitalism mass-produced it. Can you imagine what an Internet run by the government would look like?! I shudder to even think.

Embrace the unfairness of life and exploit it. Be creative and courageous. Don't rely on the government -- of all institutions! -- to make life "fair". Life in North Korea and Cuba is what government's idea of "fair" looks like.

Regulate Google, Break up Facebook, Twitter

[LeftCoastThinker]

"Much of this techlash is misguided."

Lets list some top shelf, recent bad things happening at the big tech giants:
- Google is suppressing relevant links in your search results that don't agree with their world view and/or whatever country you are searching from. If a conservative organization that controlled 90% of all search was doing this, it would be wall to wall media coverage, but the truth is Google is warping reality, rather than using straight relevancy to your search terms, now they are also deciding what is relevant.

Google must be regulated as a common carrier to protect the free exchange of ideas (a ubiquitous search engine is the very definition of a common carrier), and only a very narrow list should be censorable, and that list must be defined by the government with federal oversight and transparency and accountability to the people, not some unaccountable corporation. For example, sites inciting actual unjustified violence (in their content, not in some random user generated comment), sites promoting violent jihad, sites promoting harming children, etc.
https://www.wsws.org/en/articl...
https://www.usnews.com/opinion...
https://www.reddit.com/r/googl...

- Google and Facebook combined control 60% of all advertising revenue on the web, and routinely block content from receiving revenue if they don't agree with it (conservative video blogs on Youtube for example.) No other entity has more than 5% market share of online advertising. http://fortune.com/2017/07/28/...
- Google recently fired an employee who was asked for input on their internal hiring policies. When he highlighted a number of reasonable, demonstrable facts that contradict Google's diversity initiatives, one of his upper level managers leaked his memo to the press and he was subsequently fired (they are now facing a massive class action lawsuit, and more and more stories of the fascist intolerant alt left behavior at Google are coming out.) (no citation needed, well documented on slashdot.)
- Facebook first facilitated Russian (and likely Chinese and others) meddling by allowing false advertising stories to run during the election, then they tried to implement news censors, the vast majority of which were targeted against conservative sites, to the point that there was massive backlash and they got hauled in front of congress to explain WTF they were doing. They utilized blatantly biased censors as well as sites like politifact (which has very little facts beyond the actual name, and is a demonstrated shill for the alt left and not some non-partisan group) and the ADL (also an alt left hit squad group with zero credibility to anyone who has been paying attention).
https://gizmodo.com/former-fac...
https://www.washingtontimes.co...
Some concrete examples of conservative banning: http://www.foxnews.com/tech/20...

- Twitter has been caught red handed gleefully describing how they shadow ban people for expressing political views with which they disagree, rather than advocating anything objectively wrong. The political bans have been 90% right leaning people. Those on the left who have been banned have been advocating actual violence, and often associated with the terrorist group Antifa.