The upside of being ruled by five tech giants

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(Technology Today Monday 6 November 2017)

The upside of being ruled by five tech giants

The five tech firms still competes mightily against one another, and Amazon, for one,

remains relentless in creating new ways to shop. Photo: Reuters

By Farhad Manjoo -

-

Updated: 7:08 PM, November 6, 2017

The tech giants are too big. But what if that’s not so bad?

For a year and a half — and more urgently for much of the last month — I have warned of the growing economic, social and political power held by the five largest American tech companies: Apple, Amazon, Google, Facebook and Microsoft.

Because these companies control the world’s most important tech platforms, from smartphones to app stores to the map of our social relationships, their power is growing closer to that of governments than of mere corporations.

That was on stark display last week, when executives from two of the five, Facebook and Google, along with a struggling second-tier company, Twitter, testified before the United States Congress about how their technology may have been used to influence the 2016 presidential election.

Yet ever since I started writing about what I call the Frightful Five, some have said my very premise is off base. I have argued that the companies’ size and influence pose a danger.

But another argument suggests the opposite — that it’s better to be ruled by a handful of responsive companies capable of bowing to political and legal pressure. In other words, wouldn’t you rather deal with five horse-size Zucks than 100 duck-size technoforces?

The insatiable appetite of digital technology to alter everything in its path is among the most powerful forces shaping the world today.

Given all the ways that tech can go wrong — as we are seeing in the Russia influence scandal — isn’t it better that we can blame, and demand fixes from, a handful of American executives when things do go haywire?

That’s not ridiculous. Over the past few weeks, several scholars said there are good reasons to be sanguine about our new tech overlords. Below, I compiled their best arguments about the bright side of the Five.

THE FIVE CAN BE GOVERNED

Tech is inherently messy. The greatest human inventions tend to change society in ways that are more profound than anyone ever guesses, including the people who created them.

This has clearly been true for the technologies we use today, and will be even more true for the stuff we will get tomorrow.

The internet, mobile phones, social networks and artificial intelligence will make a mess of the status quo — and it will be our job, as a society, to decide how to mitigate their downsides.

One benefit of having five giant companies in charge of tech infrastructure is that they provide a convenient focus for addressing those problems.

Consider Russian propaganda. People have worried about the internet’s capacity to foster echo chambers and conspiracy theories almost since it began; in fact, in several cases over the last two decades — from 9/11 to the Swift Boat Veterans for Truth to birtherism — the internet did play a key role in the propagation of misinformation.

But because those rumours and half-truths spread in a digital media landscape that was not owned and operated by giant companies — one in which information was passed along through a Wild West of email, discussion boards and blogs — it was never conceivable to limit that era’s equivalent of fake news.

Today, it suddenly is.

Because Facebook, Google and Twitter play such a central role in modern communication, they can be hauled before Congress and either regulated or shamed into addressing the problems unleashed by the technology they control.

This does not mean they will succeed in fixing every problem their tech creates — and in some cases their fixes may well raise other problems, like questions about their power over freedom of expression‎.

But at least they can try to address the wide variety of externalities posed by tech, which may have been impossible for an internet more fragmented by smaller firms.

“This is new stuff everybody is dealing with — it’s not easy,” said Rob Atkinson, president of the Information Technology and Innovation Foundation and co-author of “Big Is Beautiful,” a coming book that extols the social and economic virtues of big companies.

“So when you discover a problem, scale makes that easier. You’ve got one or two big firms, and they have a lot of public pressure to be a responsible actor.”

THE FIVE HATE ONE ANOTHER

Over the past few weeks, many people at large tech companies have repeatedly responded to my questions about the dangers posed by big tech with a funny argument: Yes, they would say, the other tech giants really are worrisome — so why was I including their company in that group?

It was an odd line.

As an outsider to these companies, I tend to worry about their collective power, especially the way they have managed to control the fortunes of innovative startups.

But none of the Five see themselves as part of a group — each of them worries about the threat posed by startups and by the other four giants, which means that none feels it has the luxury to slow down in creating the best new stuff.

This dynamic — where each company competes mightily against the others — suggests some reason for optimism, said Michael Lind, who wrote “Big Is Beautiful” with Mr Atkinson.

“As long as their innovation rents are recycled into research and development that leads to new products, then what’s to complain about?”

You can see this in their product road maps. None of the Five has slowed down investing intended to further expand its area of control — for instance, Google keeps investing in search, Facebook is still spending heavily to create new social-networking features, and Amazon remains relentless in creating new ways to shop.

At the same time, they are all locked in intense battles for new markets and technologies.

And not only do they keep creating new tech, but they are coming at it in diverse ways — with different business models, different philosophies and different sets of ethics.

“So, why preemptively say that maybe we’ll be harmed in the future — that in 2030 they’ll jack up their prices or something?” Mr Lind asked. “Well, deal with that as it comes.”

AMERICAN-GROWN

The Five achieved their dominance because they operate in areas that provide massive returns to scale. Thanks to economic dynamics like network effects — where a product like Facebook gets more useful as more people use it — it was perhaps inevitable that a handful of large companies would take control of much of the modern tech business.

But it wasn’t inevitable that these companies would be based in and controlled from the US. And it’s not obvious that will remain the case — the top tech companies of tomorrow might easily be Chinese, or Indian or Russian or European.

But for now, that means we are dealing with companies that feel constrained by American laws and values.

Yes, this is jingoistic; the idea of a handful of US tech giants controlling much of society has helped push regulators internationally to try to limit their power.

But we would almost certainly do the same if a bunch of foreign companies tried to take over our economy. At least it’s our own giants that we have to fear.

I don’t mean this list to get the Five off the hook. How we deal with their efforts to capture more power over the economy and our society is perhaps the next great question facing America. But this is a complex problem precisely because there are both advantages and disadvantages to their size.

As I said, tech is messy. THE NEW YORK TIMES

ABOUT THE AUTHOR:

Farhad Manjoo is the New York Times’ technology columnist.