What Everyone is Missing in the Big Conversations about “Big Tech”

Founding I Made You Look editor Rachel Parker with cooperation from Heartland Strong on the perils and problems with the current dialogue around big tech…and what we should all really be worrying about. (Hint: it’s not Section 230)

In early 2018, I was watching former Facebook board member and its CEO’s mentor, Roger McNamee leverage Bill Maher’s considerable platform as the first featured guest on that night’s Real Time. Seated next to the host of the venerable HBO infotainment mainstay, McNamee warned about the perils not just of social media, but of big tech in general.

Was his proclamation about the ad duopoly of Facebook and Google threatening the very existence of journalism itself? No. Was it about the burgeoning power that Amazon held over nearly everything from Main Street retail, to online traffic, and also healthcare? No.

Was it about the lack of regulation that up to that point had allowed Google and Apple to own a duopoly on the app market? No. Was it about how a lack of cooperation between the Tier 1 ISPs and the U.S. government was leading to information deserts in rural America where high speed broadband had yet to proliferate?

No.

Did he clarify that our march to embrace this often under-defined concept of “open source” had led us to embrace massive platforms that - as Recode’s co-founder and tech’s most prolific and informed critic Kara Swisher has stated time and time again - has given us everything for free in exchange for all of our personal information and secrets? No.

Like all lurking monsters of public policy, nothing throws off the scent like a perceived monster to frighten the public and gobble up their attention...while the true horror show unfolds in the background.

McNamee had a rapt audience in Maher. The latter has been prattling on for years about social media, talking down to his audience like we are all overgrown children who are unable to put down our digital screens for five minutes to give our attention to more worthy media (presumably, him). The problem is that well-intentioned pundits like Maher don’t understand technology or the machinations behind it, which makes him a prime audience for someone like McNamee, a kajillionaire veteran of the Valley, who warned in that interview (among other things) that “brain hacking” was getting people “addicted” to their cell phones.

There are two problems with his theory. One, it’s bullshit. Is it a term that the “move fast and break things” crowd uses liberally (as if it were actual, you know, science)? Sure. The problem is the lack of science behind it and the distracting path that the very paranoia behind it caused in the earliest days of skepticism about surveillance capitalism. That argument: The fundamental problem with social media platforms is that they are literally addictive.

My big beef with this discussion is that it started and ended like many of the critiques of big tech have played out over the years. It began with fear mongering (which I’ll concur has some absolutely valid concerns, especially as it relates to screen time and bullying among others) and ended with us all nodding collectively in agreement and yet...nothing has changed.

There are surely problems with our constant use of cell phones but addiction is hardly one of them. (If you can stomach a rich, smug, white guy talking about the Frankenstein monster that he helped knowingly create prattle on during one of the most treacly and disingenuous apology tours I’ve ever personally witnessed from a Silicon Valley billionaire like him, you can do so here). I’m sure that this interview made silver-haired would-be social critics like Maher and McNamee feel better about pointing their long wands at “the kids” who are being led down the garden path by monsters like Zuckerberg et al. I’m also sure it helped sell copies of the book that McNamee was pimping at the time.

What it didn’t do was educate an increasingly ignorant public about what the real dangers of very, very large companies are, and how simple (and still as of this writing non-existent) anti-monopolistic legislation would undermine precisely how a company like Facebook can thrive with impunity. It also (I believe) conflated “brain hacking” with the valid concerns of online privacy, further confusing and alienating consumers.

I’m not arguing the logic that so-called “filter bubbles” are problematic. The advertising algorithms that all online platforms use prolifically are a massive problem when it comes to the dissemination of fascist imagery, fake science, and buzzwords posing as baseless theories. Does our usage of social media, as McNamee states in this interview with the Guardian, where he openly criticized Silicon Valley from the vaulted position of an insider who was an ally and colleague of Facebook co-founder (O.G so-called brain hacktivist himself, Tristan Harris), lead to “addictions” which make us vulnerable to manipulation?

Would that it were that simple, or curable, or, you know, medicinal. Social media, and its echo-chamber looping that it creates is less than ideal. Arguably, they’re terrible and probably led to the insurrection of January 6th. Russian troll bots who utilize Facebook, YouTube, and Twitter’s penchant for anonymity surely were and are something that requires assessment. Lying, though, and misinformation is not a byproduct of addiction. (We’ll dig into that in a minute.)

The kernel of truth that I appreciate from his Guardian article is that McNamee at least hints at the incurable nature of the big tech problem that plagues us and will continue to plague us until they either police themselves or Congress steps in: Their monopolistic behavior.

“[Facebook and Google] were very much in the business of manipulating attention in order to get you to spend more time on [their services]. And that is a very dangerous business model for society. It’s bad for the mental health of the people who use it. It’s terrible for democracy. It’s completely destroyed any sense of privacy, and it’s undermined entrepreneurship in the United States, because these companies essentially pick off one industry at a time and disrupt it in a way that destroys the old without replacing it with something of equal value.”

Listen, I can’t disagree with a word of that. I understand why men like him are respected when “the call is coming from inside the house” so to speak. We absolutely need more tech insiders to speak out against the massive platforms they’ve created that he correctly points out disrupt entire industries without consequence.

The entire technology industry as we know it today has long behaved without thought or even inquiry into the consequences of their platforms or billions in revenues. Morality, to them, is sort of an “old hat” term that they leave to the billions of their denizens using their considerable infrastructure to work out for ourselves. Facebook is a terrible, awful company. YouTube (a free, open-source CDN essentially for the masses) is a stupid, stupid, stupid business model. (If you broke out such a business from its wealthy and profitable parent, the very cost of the video it streams in a day would make it untenable as a company.) I’ve seen those arguments, or versions of them, many times, but I think it’s rare that they get filtered to the public in the right way.

When it comes to the tech giants, this conversation (and ones like it) that center on the social media platforms ignore the real giants in the room: Amazon and Google. Our latest obsession with how we moderate popular social media platforms, which is the primary motivation of wanna be populists like Missouri Senator Josh Hawely, we need to address the problems of the valley itself.

Is addiction and brain hacking the problem? As if, and once again, no. The problem, if it could be so succinctly boiled down into one word is this: Amazon.

Censorship is Not a Problem, Period, The End

Journalists like Glenn Greenwald and Matt Taibbi have recently been obsessed with the sloppy and half-handed job that online companies (they mean largely Facebook and Twitter) are doing at moderating their platforms. The argument that Greenwald et al are consistently making is that as Twitter is the new public square, censoring speech on Twitter (or Facebook or YouTube) is tantamount to censoring speech period. (I am sympathetic that being a professional journalist, particularly on the left, arguably mandates a Twitter presence. I personally haven’t been active on Twitter for close to 10 years. Also: I hate it. It’s a sewer of misogyny, fake profiles, and hate speech.) That may be an interesting intellectual argument to slice for two men (who let’s be clear, I admire, respect and read) who are representing a sort of moralistic intellectual audience of speech advocates who still have never, for five minutes, worked in the tech industry.

That’s where my experience veers significantly from them. Greenwald started his profession as a lawyer, and Taibbi has been a journalist most of his life and career. Where I, on the other hand, finally accepted at the tender age of 30 that maybe a career in independent film wasn’t going to work out, landed a job at a “dot com” in 1999. I, like them, was a writer. Unlike them, I was a writer who was about to embark on what is now a 20 year career working for tech start-ups.

My resume is actually pretty boring, but it’s the kind of bread and butter CV that usually turns heads when someone who knows and understands the tech space reads it. I spent six fun and informative years as a marketing director for a service that shotgunned press releases into newsrooms.

From there, I consulted for maybe a half a dozen companies with varying degrees of success. Most of them never took off. One of them was sold (as was the distribution service). Buried in there were two stints at would-be online video solutions: One, a set top box that pivoted into nowhere and another that positioned itself as a 21-st century broadband video delivery system.

I was hired for the former based on my experience and connections from the latter. The whole thing crumbled in a Fyre Festival-like story of a bullshitter who swindled a few million bucks from a friend of mine, which is very much par for the course in that world. So, what started out as a would-be adjunct to content delivery networks (this was in 2008, so just prior to Netflix’s ascension into streaming services) and technology partner to the studios, devolved into insolvency and the usual smoke and mirrors.

That ignominious (as a colleague put it) demise did not happen before I had the opportunity to get elbow deep in the real mechnations of the internet: the backbone providers or the Tier 1 ISPs. I’d been working in and around technology for nearly 10 years at that point, so I knew enough to be able to sit in a room and sound smart. I also knew enough to ask questions when bluffing would make me look like an idiot.

“I spent a lot of time with powerful engineers and lawyers” isn’t very sexy, but that’s what it was and that’s where I was for just over a year. It taught me a lot, and that kind of knowledge only deepens over time.

The Public Isn’t Getting the Right Message From, Well, Anywhere

What I’ve noticed is that the consumer media largely doesn’t understand how the internet works. (For the record, that became evident when, while working at the would-be video thing, the Net Neutrality debate was in full swing.) There’s nothing that can replace the knowledge that comes with talking to network engineers and peering managers for the world’s largest ISPs—the very companies who make connectivity possible—when you have a New York Times story in front of you.

Engineers, no matter where or who they work for, are the most apolitical people on earth. They don’t care about bias or party affiliation or any of that. What they do care about is bullshit and nonsense. Sitting next to people like that at long conference tables and listening to them talk about what the media was getting wrong, was clarifying.

I’ve followed many writers over the years, and easily took for granted the knowledge and instincts that my career afforded me. My husband knows he can pause a story on any podcast or platform and sit me down in front of it and say “Is this a reasonable argument” and trust that I’ll confirm whether or not it is, particularly if it discusses the business of cloud computing, online advertising, and the increasing power of Amazon.

As someone who reads about technology in and around engineers who build things for the Internet for over two decades, I still don’t think there’s a single source of truth that’s easily digestible for the average consumer. The newspapers mostly follow the political angles. The financial press are slaves to earnings reports. Technology publications are infatuated with newness and the personalities in the industry.

Lately, the discourse around social media and tech is so bad, that I spent a few hours recently digging around for at least something that framed the latest battle (this one over a sliver of a law called “Section 230”) and came up with the same basic result. No one in DC has the slightest idea of what they’re talking about, the tech press is still largely having conversations with its own insiders, and that’s leaving well-meaning consumers and actual voters in an information vacuum.

What the Hell is Section 230?

Section 230 is all of what remains of a law that was passed in 1996 (the Communications Decency Act) by a bunch of conservative lawmakers whose primary interest was limiting the dissemination of porn on the Internet. Two senators (a republican and Ron Wyden from Oregon, who is still in his seat) attached a provision to the law that would protect foundling ISPs who were still in their infancy as consumer service providers would not be treated like publishers or TV networks.

Publishers or networks, after all, produce their own content and are therefore more connected to it. The section basically insists that ISPs are different, in that they don’t author or produce the information that sits on their networks. Rather, they just provide the infrastructure for it to exist in the first place. The argument goes something like this: if a newspaper publishes something libelous, you can’t sue the trucking company that delivered it to the newsstand (or something like that). In 1996, there was good logic that if you made those tiny, brand-new companies liable for what their users said on the hundreds (if not thousands) of chat rooms cropping up by way of their data lines, then the whole baby internet comes crashing down, and along with it, the potential for a ton of First Amendment problems.

When the ACLU sued to have the courts overturn the legislation, it worked. The Supreme Court almost always supports the rights of speech. The ONE part of the law to survive was section 230.

The argument that we should now revisit it and that somehow creating a liability loophole for Facebook will amend the problems of both monopolies and hate speech is misjudged (Democrats!) or downright cynical (Josh Hawley).

The pros/cons for amending it or getting rid of it are a lot of things, but mostly, they’re pointless. The highest court in the U.S. has already literally spoken on the matter. Touch one hair on the figurative head of 230? The ACLU and organizations like the Electronic Freedom Foundation are going to bombard the courts with complaints. It becomes a political football and no one touches it.

That’s my fear. Just like the “social media is addictive” movement didn’t stop Facebook from nearly fucking democracy in both 2016 and 2020, the fevered arguments on either side of the 230 debate will come to, trust me on this, nothing.

We need intervention to stop the web’s two largest monsters from destroying what is left of our economy. And Section 230 doesn’t even begin to come close to doing that in an effective way.

What is Needed: New Anti-Trust Legislation to Break Up Google and Amazon

I was a working professional in the tech space when those fledgeling companies were blossoming. Amazon felt like an upstart to the publishing and retail industry (because it legitimately was). Google was helping us navigate this new thing called the web, doing it for free, and giving us new and helpful tools along the way. To say the least: It was a heady time.

Fast forward two decades later and those fledgling companies own the vast majority of consumer traffic on the web. Google owns the #1 and #2 search engines (I mean YouTube) on the planet. The third? Amazon. The company the most likely to disrupt Google’s near monopoly on online search? Amazon.

I’ve had to counsel frustrated friends who, looking to disrupt Amazon’s considerable power and profit, are dissatisfied with my answer to “where else should I shop?” Does Amazon make money from its retail business? Sure. But it’s an eyelash compared to the vast profits it earns from Amazon Web Services (AWS), its expansive enterprise cloud business.

Most websites now sit on a virtual hosting infrastructure that relies on Amazon’s considerable cloud. It’s able to discount and control pricing on its retail arm (and do nutty things like compete with Netflix by offering what amounts to a free content platform) by funding all of that with its bazillion dollar earning AWS arm.

AWS is an earnings machine. In 2020, that arm of the business alone earned the company $13.5 billion...IN PROFITS. Read that again. Profits. With revenue like that, it can continue to gut pricing on its increasingly lucrative ad business and eat Google’s lunch.

Today, Google is still the gorilla in the room when it comes to online ad revenue, but Amazon is changing that and quickly. In 2016, the online research firm Bloomreach published a study which revealed that most consumers start their product research directly on Amazon, bypassing Google altogether.

I haven’t yet mentioned Facebook. Facebook is making massive amounts of money from selling ads. How much? Facebook’s net income in 2020 was nothing to sneeze at, or $11.22 billion. How does that compare to the big four?

Net Profits In 2020

Alphabet (Parent of Google/YouTube): $40 Billion
Amazon: $21 Billion
Apple: $57 Billion
Microsoft: $44 Billion

There’s also the fact that of those companies, Facebook has the most troubles on the horizon. Outside of the ongoing reputation issues the social media company faces from scandals that include Cambridge Analytica, a lawsuit recently revealed that Facebook COO and ad platform guru Sheryl Sandberg and her various ad teams were potentially lying about the efficacy of its ad network.

The problem? Duplicate and fake accounts. The charge? Facebook manipulated its own data in its free ad planning tool to make more money. From a TechCrunch article about the suit:

“The filing also reveals that a product manager for “potential reach”, [Facebook employee] Yaron Fidler, proposed a fix for the tool that would have decreased its numbers. His proposal was rejected by Facebook’s metrics leadership on the grounds that it would have a “significant” impact on the company’s revenue — to which Fidler responded: “It’s revenue we should have never made given the fact it’s based on wrong data.””

Congressional scrutiny aside, Facebook has a user issue. In addition to its propensity to puff up its user numbers (which is easily the worst kept secret in the industry) the general toxicity and lack of transparency is causing users to abandon the platform. In its most recent filing, the number that concerns forecasters and Wall Street is the gold standard of online media: daily average users. After a boom year from the pandemic, Facebook’s daily user count slid from 198 million to 196 million.

It’s not enough to drive the company out of business, but the news was bad for investors, with the company losing $37 billion in its market value in one day. The company unsuccessfully tried recently to future-proof itself with, of all things, a digital currency (which failed spectacularly, a fate that the company’s board had well earned at that point in history).

To recap: Facebook is in trouble. Its lack of business savvy, its foundational transparency issues, and a general sense of “yick” that more and more of us are having with social media in general spell problems.

Facebook, also, is not the most popular social media app. That remains YouTube’s territory. Also, more and more young people are drawn to an increasingly diverse landscape of social apps from TikTok to Snapchat.

The reignited focus on how to regulate Facebook’s users is missing a bigger point. Why focus on the company that earns the least in terms of revenues, has a shrinking market share, and could easily be disrupted by other market entrants?

I think it’s simple. It’s one that most people, aka voters, can understand. If members of Congress attack them, it looks like they’re doing something. It makes for an entertaining--even if substantively empty--book deal, too. And it allows those regulators to bypass something that most of them don’t really want to do, which is create new legal mechanisms to cleave the likes of Alphabet and Amazon in several parts.

Divestiture is the Only Conversation We Should Be Having

It makes no earthly sense that one company should own the number one and number two search platforms (Google). It makes no earthly sense that only two companies control the entire app market (Apple and Google) with one being the obvious leader (Apple). There’s nothing competitive about the world’s largest online retailer (Amazon) also being the world’s largest cloud storage company (also Amazon).

Amazon’s retail profits will soar and as it solves its “last mile” (a term, in this context, referring to getting a package from a warehouse, which it owns, through a delivery network, which it does not) problem, something that could transform it further from the world’s largest retail into the world’s second or third largest shipping and logistics company. If that sounds far fetched, they’re well on their way to doing just that. It made so much money during the pandemic, that it added to its fleet of cargo planes. It will operate 85 Boeing 737s by the end of 2022. This then puts the company in the position to resell its delivery service to, well, anyone. From a Forbes article:

“By owning and controlling the major aspects of the supply chain, Amazon becomes less reliant on third-party suppliers like FedEx, UPS and USPS, allowing it to shorten its delivery time from click to door. In early 2020, Amazon reduced click to door time from 3.4 to 2.2 days (the industry average is 5.1 days).”

For some context, Southwest Airlines has just north of 730 planes in service as of this writing. UPS, the nation’s second-largest air freight company (after FedEx) has 274. You may be comfortable with Amazon having a fleet over 1/10th of Southwest Airlines. I’m not.

When you create legislation and conversations around those power dynamics, and how fantastically dangerous that is for competition, regulators also have to discuss how stupid and unfair it is that Facebook owns Instagram and WhatsApp. It never should have been allowed to buy them in the first place.

Put more simply, if we all get as serious around this conversation of breaking up tech monopolies with new laws (say, as we have with the climate justice movement), those laws would certainly impact Facebook’s ownership share of the social networks it’s grabbed up over the years.

Google’s only serious threat is Amazon. Facebook has other threats, but it’s fond of saying that Apple is it’s biggest competition. While Microsoft’s Azure business is slowly encroaching on Amazon’s considerable AWS territory, nothing—and I mean nothing—on the horizon will knock that company off its perch.

Unless we want Amazon to successfully move its way further into both online advertising and, get this, healthcare (yep...you read that right): we have to yank the conversation away from dopes like Hawley and well-intended lawmakers (Klobuchar, sort of) and make them act like adults. We can’t buy a time machine and go back to 2005 and insist that regulators not allow Google to purchase YouTube. We have choices, now, however, and there are three rallying points that everyone, and I mean you, need to get around. And we need to do it now.

ONE: Google has to divest 100% of its ownership stake in YouTube.
TWO: Amazon has to decide if it’s a cloud hosting company (AWS), a retailer (Amazon), or a broadcaster (Twitch, Prime). It can’t be all three.
THREE: Continue to make Apple and Google better players when it comes to the fees they charge to host apps on their app duopoly.
FOUR: Create a public trust of some kind that forces Google and Facebook to pay back billions of dollars in lost revenue to online news publishers and newspapers.

When the Federal Trade Commission came after Paramount Studios in 1948 for owning its own theater chain, there wasn’t a law that prevented them from doing so. They made one, forcing the studios to get out of the movie distribution business.

What McNamee and I do agree on is that we need new laws, but we need the right laws focusing on the right things or it’s all pointless. We’ve broken up monopolies before. And we have to do it now.

Facts and Statistics and Further Reading

Google owns the top two most trafficked websites in the United States, with Amazon in 4th place. (Facebook is third)

https://www.semrush.com/blog/most-visited-websites/

Google owns nearly 80% of the world’s browser market

Facebook schmacebook. Google makes its considerable profits from search. Facebook is not in the top 5 search engines on the internet. Amazon, however, is #2.

Source: https://www.cnbc.com/2019/10/15/amazon-is-eating-into-googles-dominance-in-search-ads.html

How much can Google fuck a search competitor? Ask Pinterest.

How long have we known that the only company set to disrupt Google was Amazon? Former Google CEO Eric Schmidt knew it back in 2014.

"Many people think our main competition is Bing or Yahoo," he said during a visit to a Native Instruments, software and hardware company in Berlin. "But, really, our biggest search competitor is Amazon. People don't think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon." Source

This WaPo story is...better than some at least at pointing out how complex the various layers of the internet work

I could take to task how a lot of these companies are grouped together (I would never lump PayPal and CDNs together for example). The term “stack” in my humble judgement is misused here. It’s just that kind of casual misuse of established enterprise terminology that makes me cringe. However, overall, I give this a solid “B”. So, if you don’t know anything about the internet, it’s not a bad place to start.

https://www.washingtonpost.com/technology/2021/03/24/online-moderation-tech-stack/

Who gets it right most of the time? Scott Galloway

He’s a prolific writer, podcaster, and professor of marketing at NYU. When it comes to his pragmatic and real-world criticisms of Google et al, I’ve rarely seen him stumble. Check him out here kicking absolute ass on Democracy Now.

https://www.democracynow.org/2020/8/5/scott_galloway_big_tech

What about Twitter? You left out Twitter?

A company of that market cap has no business as a serious contender in this conversation. The company, as far as it compares to the Googles and Amazons of the world, is, at best, a footnote. From Statista: “In the most recently reported fiscal period, the social network's annual net loss amounted almost 1.14 billion U.S. dollars, an decrease from a net income of 1.47 billion U.S. dollars in the previous year.” (Cue the sad trombone.)

Useful AWS Reading

Need a primer about what AWS is and why it’s so ubiquitous? This piece is great.

https://www.visualcapitalist.com/stats-amazon-dominance-cloud/