Larry Magid: Historical perspective on Congressional grilling of ‘big tech’

Larry Magid: Historical perspective on Congressional grilling of ‘big tech’

Wednesday’s Congressional hearing with the heads of Amazon, Apple, Facebook and Google was historic for more than one reason.  It was the first time CEOs from all the major tech companies testified at a single hearing, and it probably wouldn’t have happened that way if it were not for the new-founded procedure of


Larry Magid 

letting people testify remotely. Getting even one of those men to fly across the country for a hearing is a herculean task even for Congress. Being able to schedule them all at the same time would be close to impossible. Even a private jet is slow compared with videoconferencing.

And, while it’s not the first time that tech execs have been grilled and criticized in public, it’s still a rare event, especially when aimed at four of the most valuable and powerful companies in the world. Their combined market capitalization is higher than Germany’s GDP, behind only the U.S., China and Japan, and likely to soon surpass Japan.

It’s also rare these days for Democrats and Republicans to agree on anything, but every speaker from both sides of the aisle had something bad to say about these companies. They all seemed to agree that the companies had abused their power, though there was disagreement about exactly how that power has been misused.

What struck me about Wednesday’s hearing is the difference between today’s animosity toward these companies compared with the way they were previously regarded. As a long-time tech journalist, I’ve followed those companies and interacted with these CEOs for a very long time and remember when each of those companies was beloved and almost above criticism.

Apple has long been a beloved company. I’ve been to scores to MacWorld Expos and Apple events where fans of the company would line up for hours to hear its CEO enlighten them on what’s to come. Steve Jobs became a legend during his lifetime, and its current CEO, Tim Cook, though not regarded as visionary as Jobs, is widely admired and well-liked by many who know him. For years, if I wrote anything even remotely critical about Apple or one of its products, I’d get email from its fans, defending the company and its products. I even got flack when I praised Apple, with some people complaining I didn’t praise it enough.

Google, Facebook and Amazon were also widely loved during their early years. I remember commenting the day that Google went public that its honeymoon with the public and the press would soon be over. Prior to that day in 2004, the company could seemingly do no wrong. Its founders Larry Page and Sergey Brinn were highly admired and rarely criticized in public. Long before the company went public,  I remember asking Sergey Brin if he fully understood that he and Page had fundamentally changed the way people acquire knowledge. I wasn’t trying to flatter him, but the question indicated how deeply impressed I was with the work they were doing.

Facebook, which was founded in 2004 for students at elite colleges but became available to anyone over 13 in 2006, was considered the clean, sane and safe alternative to MySpace, which had already developed a pretty bad reputation for its cluttered and chaotic pages and the mostly undeserved impression that it was dangerous for teens. Facebook’s first major public embarrassment was in 2007, when it launched Beacon, which shared users’ personal information with third parties without users’ consent. Beacon was shut down in 2009. That year, a class action was file against Facebook and the settlement included that Facebook fund the Digital Trust Foundation that provided support to organizations involved in digital privacy and safety. I served without pay on that Foundation’s board, though my nonprofit, ConnectSafely.org, did (and still does) receive financial support from Facebook and Google, among other companies.

And even though Amazon had some early critics because of its impact on brick and mortar bookstores, just about everyone loved the fact that they could so easily get just about any book often for less than what bookstores were charging. I remember being at the now-defunct Printers Ink Bookstore in Palo Alto, overhearing a customer ordering and paying full-price for a book and being told that she would have to wait at least a week before it came in. I thought of tapping her on the shoulder to let her know she could get it faster and cheaper on Amazon, but resisted the temptation because I didn’t want to take business away from a local bookstore that I loved.

Companies are extremely popular

Fast forward to 2020. Whether or not these companies are still admired or liked, they are certainly extremely popular. Nearly half of Americans with smartphones own an iPhone. Nearly everyone uses a Google service many times a day. Facebook’s three biggest products: Facebook, WhatsApp and Instagram, have a combined 5.1 billion accounts. That represents a significant percentage of the world’s population, though because people can have more than one account, it is less than 5.1 billion people. And Amazon is truly the amazon of online shopping.  The pandemic has only increased our reliance on Amazon. Even people who prefer to shop locally are finding themselves buying online because of the risks associated with shopping in regular stores.

But as popular as these services are, they are also invasive. We all use Google, but we also worry about the vast amount of information it collects about us and how that information can be used against us and Google’s competitors. I love the fact that Facebook keeps me in touch with people who might have otherwise slipped out of my life, but worry a lot about the toxic material that some people are exposed to on the service (what you see on Facebook depends largely on who you interact with) and how it is contributing to our “post-truth” society. I agree that Apple makes great products, but I worry about one company having such a huge market share in smartphones and am bothered by the fact that Apple has nearly complete control over what apps run on its phones and tablets. And even though I shop on Amazon and have an Alexa voice-controlled speaker in several rooms of my house, I worry about its impact on both the online and brick and mortar retail world as well as how Amazon uses my information to try to sell me things.

These companies are very big and very powerful, and even though I used to argue against government regulation, I now agree that they need to be regulated and am open to conversations about whether they should be broken up. Like the old Bell telephone system, which was broken up by the government in 1982, these tech companies have done a lot of great innovation during their lifetimes, but they have become nearly impossible to compete with and — in the long run — that’s not good for innovation.

Disclosure: Larry Magid is CEO of ConnectSafely.org which receives financial support from Google and Facebook.

Published at Fri, 31 Jul 2020 15:00:59 +0000