Franklin Foer On The Political Power Of Amazon, Facebook And Google

Silicon Valley giants have been slowly increasing their spending in the nation’s capital. Third-quarter lobbying reports released in the past week show Google, Facebook and Amazon spent a combined $12.6 million on lobbying from the beginning of July to the end of October.

Google spent $5.2 million on lobbying last quarter, a nine percent increase over last year. That included paying 24 different firms to lobby on Capitol Hill, and deploying another 10 of its own in-house lobbyists to engage Congress on everything from human trafficking to tax reform to “small business advertising issues.” Facebook lobbying is up 41 percent over last year’s third quarter. Amazon spent $3.4 million, more than it has ever spent in a single quarter on lobbying, according to the Washington Post.

Those figures might not represent a huge amount of money compared to the value of those companies, but they do represent a large outlay relative to what companies and trade groups regularly spend on influencing Washington. The top three spenders on lobbying in the U.S. last year, the U.S. Chamber of Commerce, the National Association of Realtors and Blue Cross Blue Shield, spent a similar amount last quarter: a combined total of $15 million.

Silicon Valley has long been associated with a libertarian ethos, a spirit that has been reciprocated by a laissez faire attitude from the nation’s lawmakers. But growing political spending by the companies, increasing congressional scrutiny and a backlash against Big Tech seem to indicate that era of benign neglect is over.

While Silicon Valley has found itself deflecting criticism over Russia’s effort to weaponize its platforms, criticism of big tech’s power over our data, our economy and our politics has reached a fever pitch.

The most comprehensive criticism of Big Tech so far is World Without Mind by Atlantic staff writer and former New Republic editor Franklin Foer. Published last month, the book is a polemic against the concentrated power of Big Tech generally, and Facebook, Google and Amazon specifically. International Business Times talked to Foer Monday about Silicon Valley’s influence in Washington, our outdated antitrust laws and the need to resurrect the anti-monopoly tradition in American politics.

The following interview has been lightly edited for clarity and length.

What scares you about Silicon Valley?

They have so insinuated themselves in our lives, in our markets and in our democracy. They have this tremendous power to pick winners and pick losers. Whatever they deem to be important is the thing that surfaces at the top of their feeds and search results, at the top of their store. We've always had tools, and technology has always been one of the things that defines us as human beings. But when we merge with these machines, we're merging with a different type of machine. These are intellectual machines that kind of shape our reality. We'll soon be inhabiting their virtual realities. And the problem is we aren't just merging with machines, we're merging with the companies that run those machines.

What should be done?

I think the broad thing that I would like to see is some sort of comprehensive data protection law. So much of the competitive advantage of these companies rests on their ability to amass more data than their competitors. And the fact that Facebook has so much data, and Google has so much data, it helps give them their lock over the advertising business.

We have a grand anti-monopoly tradition in our country. And we haven't updated it to take into account these companies. But there is such a long, important tradition in trying to limit the power of companies within the communications and information realm.

How are the big Silicon Valley companies monopolies, and how have they managed to escape antitrust action?

Well, first of all there's nothing illegal with being a monopoly in our country. You have to be shown to be an abusive monopoly for there to be an antitrust investigation. And part of the thing that makes these companies so different, and in a lot of ways so amazing, is that they offer their products for free or for very cheap. So consumer welfare is the primary paradigm that we have for evaluating monopolies. And these companies aren't so damaging to consumer welfare as defined by the antitrust code. Which isn't to say that there are not competition issues that these companies face. With the Europeans investigating Google, I think what they're essentially saying is that Google has abused its market, its power over markets, to give itself an unfair advantage. But that translates into a complaint pretty effectively in their context, it's less compelling in the context of American antitrust laws.

Europe has approached regulating these companies differently than the U.S. Is there anything we can learn and apply from the way Europe has looked at these companies?

There's two things really. The first is that the Europeans care more about privacy right now than we do. That's been one of their dominant complaints with these companies. The U.S. doesn't even have a data protection law. We have laws that protect health information or financial information but nothing that protects data per se, so I think there is something to be gleaned from that. But also if you look at the way the European Union has gone after Google, it’s pretty clear that they are starting to come to terms with some sort of way to separate the search engine from the ad sales part of their business. It seems like they are groping toward a soft way of breaking up the company, which I think is pretty interesting.

In an ideal world, would you want to see Google, Amazon and Facebook broken up? Or is that sort of fighting the last war, in the sense that maybe that's an old way of looking at antitrust. Does that sort of logic still apply, the idea that we could break up a company?

For sure. I don't see why not. What would be the issue there?

I'm just thinking that when we broke up Ma Bell, for example, you had different regional businesses. But if you break up Facebook, you’ve destroyed the whole utility of Facebook, which is that everyone's on it.

But the idea of breaking it up doesn't necessarily mean breaking up the core network. It might mean applying a solution that's similar to the one the Europeans have applied to Google. So that somehow you change its relationship to ad sales, or force it to be a bit more of a common carrier.

I don't think we've gotten to the point where the thinking is advanced enough to really start this talk about compelling remedies. We're more in the position right now of diagnosing the problem. I think people are starting to sketch out the remedies. We can talk about it in a very theoretical sort of way, but I would just caution anyone to say something like "it's impossible to break these companies up."

You're right, we're probably just applying a past template. If we analyzed these companies and their structure, there would be ways to break them up without taking a sledgehammer and smashing them up into a million pieces. There are probably more subtle things that can be done that constitute breaking them up, but not in the Ma Bell style.

It does seem people are starting to question the power of these companies. Obviously the Russian meddling has drawn a lot of the attention. But do you think people are starting to wake up to the threat of big tech?

I do think they are waking up to the sense that these companies have too much power. Really, it's a question about the power in a democracy, and also the economy. I think that beginning with the election, I think people diagnosed that the underlying health of American democracy has shifted. And so, Facebook is the first test case of whether the political system really is turning. And it does seem to be turning.

What company do you see as the greatest threat?

I tend to place Facebook at the top of the list, just because they've done so much to quickly debase the quality of information that goes to citizens and the impact of that on our democracy has registered almost instantaneously.

This quarter’s lobbying reports just came out, and they show that Amazon, Facebook and Google are spending more and more money in Washington. I think there's a popular perception that Silicon Valley has been pretty separate from Washington, they have sort of done their own thing and Washington has let them do their own thing. But you show in your book, Google specifically has been a player in Washington for awhile now. How did that happen?

Google I think has the longest deepest history in Washington. They fought a kind of pitched battle in Europe and I think have the greatest sense of their underlying vulnerabilities. So they've invested the most heavily. They were involved in these epic fights over net neutrality, and intellectual property. And also, they were in China, which was a highly politicized issue. So in a way I think they have the most political experience out of the big tech firms.

While he was still in the White House, Steve Bannon wanted to treat Google and Facebook as public utilities. Do you agree with that?

I don't actually agree with that. If we say they are utilities and we regulate them in that sort of way, it gives the state way too much power over them. It also just seems highly unimaginative to me, that we need to assume that their can only be one social media network or one search engine or one retail store. I think that the more American approach is try to use our power to stimulate competition, rather than just accept their size as a given.

But there is something totally fascinating happen on the political spectrum right now, where you have both the left and the right being divided over the question of how to respond to these companies. And the fascinating thing is that even the center is gravitating toward antitrust in the form of No Labels, where Bill Kristol and Bill Galston have been pushing for the government to do something about the big tech companies.

You've written about Amazon's power. I'm wondering what you thought as you watched these cities submit their proposals for Amazon’s second headquarters . What has your takeaway been from watching that process?

There's this sense of desperation, this willingness to give anything to get Amazon. And there's a long history of that. Amazon has managed to always extract a whole lot out of states and localities in terms of tax breaks and subsidies in order to build warehouses.This is not really a new strategy for them. This is something that they've always done.

We're facing these mega questions about the future of work, and we see that Amazon is a crucial factor in the retail apocalypse that's happening. So if you're a jurisdiction and you're unsure about jobs, and Amazon comes in and is promising 10,000 new jobs, that's a pretty good bet for your city. But I would say, these jurisdictions don’t seem to be really doing cost-benefit analyses. They're not really adding up the gain versus the long-term cost of just subsidizing a major corporation.

There is kind of a competition issue here too, which is that Amazon's size begets more size. Amazon, because it’s so big and so prestigious, is able to leverage its reputation to get even more advantage over its competitors.

Where has the Left been on all of this? That's the group that has traditionally opposed the concentration of corporate power.

I think it's just slowly dawned on people that this is a problem. So much of the internet era was defined by tumult. We had this sense that companies rose and fell very quickly. We were just slow to acknowledge that there was a stable constellation of major powers in the tech field. Now it's kind of become undeniable.

And also, what you're getting at, which is in my book, is that the tech companies aligned themselves with the Left. And Barack Obama really closely associated himself with Facebook and Google. And so, I think there was a natural inclination on the Left to view these companies as their friends.

That leads me to ask too, obviously these companies are very powerful, but the counter argument is that if they have aligned with the left how powerful can they really be? We have Trump and we have a Republican government right now. Same thing on net neutrality, it seems like as powerful as these companies are they can’t seem to beat the old telecom giants on net neutrality.

As we saw with Facebook, it's not like these companies were sitting around rooting for Hillary Clinton, they just wanted to make a lot of money, no matter the consequences. And then on net neutrality, the Trump administration installed people in the FEC who had an ideological bent. And there's nothing much they could do about that.

Universal basic income is an idea that seems to have some cache in Silicon Valley. But it seems to me that concept is based on the the belief that eliminating most jobs is inevitable, and that it's not even worth considering whether we should do that, or attempt to do that. When you hear that discussion about universal basic income, what does that tell you about the worldview of Silicon Valley?

It shows a narcissism that's embedded in this belief that they can engineer a world in which universal basic income will be enough to carry us through. It's almost the ultimate proposition in social engineering. And like, so much else, it’s a rational solution that doesn't actually understand human beings. They just can't comprehend the idea that work is central to dignity. And there's this almost insulting assumption that most people would rather not do their jobs.

There's gotta be a way to manage technology where we can both allow it to progress without just giving it free reign. Is there a middle ground between embracing the inevitability of technology and being a luddite?

Of course. Of course. Think about automobiles. When automobiles were created they were incredibly efficient means of getting human beings from point A to point B. But a lot of people got killed because there were no rules. So we created speed limits and stop signs and safety belts and fuel efficiency standards. There is no reason that these companies, and these technologies, should be immune from rules. We can harness them for human beings. Nobody is saying "throw your phone in the sea." To betray opposition to these companies as luddite is to concede that any criticism of them is an instance of wanting to suppress innovation, which is ridiculous.

You mentioned a data protection agency. Can you describe what that would be and what actions it would take?

It's not a totally novel concept. There are actually data protection agencies in lots of european countries that try to adjudicate complaints that people have with the big companies and try to help people fight to protect their data. But underlying it all, I really think we need a new paradigm for thinking about data. In the book I talked about how we need a paradigm that treats data as something closer to the environment, where we create a whole set of rules that govern how data can be exploited by these companies, and also insists that these companies be held to a very high standard in their exploitation of data.

Is there any particular law or fix that you would implement now?

I think what needs to happen very quickly is countervailing pressure. I look at what London has done with Uber, and I think that that's actually an important start. So many of these companies have existed in a bubble where they've been beyond criticism. Forcing Zuckerberg to come testify before the Senate would be, in the short term, an incredibly important thing that would maybe rattle the cult of personality that he has within his own company and apply pressure on their system in a very, very visible way. They would have to answer questions from angry grandstanding politicians. So much of the problem is there's no counterweight right now.

Silicon Valley, and Google in particular, hire engineers for jobs that traditionally might go to other disciplines, like finance. As we move forward, and the social implications of this technology becomes more obvious and there's more pushback, I wonder if these companies will start to move away from a strictly engineering mindset.

In the end, computer science is too important to be left to the computer scientists. Some of the systems that have been created may work efficiently and beautifully and logically, but there is very little understanding of ethics or politics. We need to treat human beings as more than the sum of their data. And that will require a really profound paradigm shift within these companies.