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Should Big Tech Die so Our Privacy Can Live?

Rahman, Nadhia. “Big Trouble for Big Tech.” New Labor Forum

https://docs.google.com/document/d/1_C5ep3WHn2T57qbG_x6gTwv5jy6d98JLfuywSNDZ0ss/edit#

Overview:

Throughout the history of the U.S., monopolies have been synonymous with robust industry, but, more times than not, this power is directly proportional to a loss of freedom on the part of the consumer and laborer. For the majority of American history, this loss of freedom is a loss of the ability to buy and sell a product or service easily, but very recently, a new and more frightening loss of freedom has emerged: the loss of the ability to control one’s data. For hundreds of years, controlling one’s data was not a problem, as companies did not have the technology to do it. However, as technology evolved, companies such as Facebook, Amazon, and Alphabet have realized that it is both exceedingly easy and extremely valuable to collect vast amounts of data on all their users, leveraging this newfound power to control people’s online life indirectly. Additionally, not only are these new-era tech giants effectively modern monopolies, but they are virtually untouchable by current legislation, creating an atmosphere for dangerously unrestricted behavior.

Introduction: the Economic Principles of the Founding Fathers

In the earliest years of the United States, the founding fathers laid the groundwork for today’s economy, ensuring that the right to buy and sell was not encroached upon in any way (West). Even before the Gilded Age and industrial revolution, the Founding Fathers understood that monopolies would undoubtedly restrict the rights mentioned previously, as they recognized that a company with “exclusive advantages of commerce” could prevent anyone else from competing (West). Despite this, the problem of overly powerful monopolies began as these initial views on prohibiting monopolies were discarded, and robust industry helped the United States economy tremendously (“Trends of the Gilded Age”). By and large, monopolies were responsible for this growth, as, without the fear of competition, they could take on large projects and expand indefinitely (“Standard Oil Company and Trust”).

The Gilded Age and the Start of Antitrust Law

https://docs.google.com/document/d/1keEOzhQSFANAnDzoDmfF38VEkmkk0BX7KnRTuzXtEeA/edit?usp=sharing

Due to the previously mentioned oversight of monopolies, companies like Standard Oil were able to grow unchecked for decades, using their power to prevent competition and hurt both consumers and laborers. One of the common practices was lowering the price of a commodity so that it was not profitable for competitors, allowing a monopoly to consolidate the smaller company and broaden their control (“Standard Oil Co. v. New Jersey”). To increase profits even further, this strategy often went hand-in-hand with lowering wages of workers, who labored long hours in poor conditions for little pay (“Working Conditions in the Gilded Age”). This situation meant that for the majority of working class men, the power monopolies had over their lives was very direct: the power to control how they worked. Monopolies could lower wages, hire strike-breakers to prevent unionization, and fire whomever they wanted arbitrarily. Likewise, monopolies had an impact on business owners in the Gilded Age, as they could decide the price of a monopolized commodity whenever they wanted to. This power of pricing could be used to drive up prices, causing buyers who needed the product to be forced to pay (often several times) more due to a lack of alternatives. Luckily, the Clayton Antitrust Act of 1914 was able to cease the operation of most monopolies, creating a roughly 80 year period of consumer freedom within most markets (Segal). However, the threat of monopolies is certainly not a thing of the past, as in recent years the problem of overly powerful companies has re-emerged with the tech industry. 

Big Tech and the Start of Data Mining

https://docs.google.com/document/d/1qoaVT1qqZg1Khp2UjMFjw9noPt6z6-6W44F33dTmIe4/

On a warm summer day in 1998, Google co-founder Larry Page placed a 100,000 dollar check into a desk drawer. The check, an early investment in Page’s search algorithm, was undepositable, as it was written out to the non-existent company Google Inc. In the following weeks, Page and other co-founder Sergey Brin filled out the paperwork to make Google Inc. a legal company, depositing the check and hiring the first employee (McFadden). Google grew quickly, using a pay-per-click marketing strategy called AdWords to profit from web traffic (McFadden). By 2003 Google had created Google AdSense, a service designed to connect businesses with advertisers. By 2004 AdSense was making 1 million dollars per day (Gould). However, Google had yet to start showing targeted ads, meaning that it was not yet mining user data for profit. This all changed in 2004, when Google introduced its new product Gmail along with an advanced keyword algorithm named PHIL that searched through personal emails for keywords and used them to determine what ads to show users (Gould). It was at this point that Google began to test the boundaries of its unofficial motto, “don’t be evil,” as they crossed the line between a service designed to “organize the world’s information and make it universally accessible and useful” (Google) and a service designed to organize personal information and make it useful for advertisers.

Other tech giants like Facebook and Amazon have similar stories to Google.  Facebook, a social media platform founded in 2004, was initially a platform to share someone’s college experience online, quickly expanding outside of college campuses and adding Facebook Ads, a targeted advertising system similar to Google’s AdWords, in 2007 (Facebook). Amazon, founded in 1994, was originally a marketplace for books, but after transitioning to broader e-commerce, realized that it would be drastically more profitable if it used customer data, likely starting to mine data after AWS (Amazon Web Services) was created in 2006 (Matthews). 

Of the three, Amazon was the first to rebuild their business around data, as its previous market strategy did not use data whatsoever. Amazon’s new business model relied heavily on its use of data collection, using the data it collected from customers to predict what products people wanted, how and when they wanted them, and how to stay ahead of competitors (Matthews). By using data in this way, Amazon was able to create an unbeatable feedback loop: collect customer data to determine what people want, more people come to their platform because Amazon offers exactly what they need conveniently, more people using the platform means more data, which means better predictions (Zatari). Despite competitors such as Target and Walmart pioneering these practices, Amazon created new and improved strategies to utilize them, allowing them to grow their e-commerce marketshare to over 50% by 2019 (Clement). This cycle prevents competitors from keeping up, as the more people use Amazon, the less data competitors have, and the worse their predictions are. 

Facebook and Google have a similar (and equally worrisome) feedback loop to Amazon due to their heavy use of data mining. Both Facebook and Google use the data they gather to profit and expand their reach, causing there to be more users, which means more data. This process shows that the crux of the Big Tech problem boils down to a straightforward idea: more data equals more users, more users equal less competition. This results in companies having the power to do whatever they want without consequences, a situation that quickly spirals out of control.

To show just how effective these strategies were, here are several graphics showing just how dominant Amazon, Google and Facebook are in their respective fields: (Quick Note: Instagram is owned by Facebook but is still counted separately)

 


Desjardins, Jeff. “Chart: Amazon’s Dominance in Ecommerce.”

Mullen, Brendan. “Search-Engine-Market-Share.”

Read, Adam. “Who, What, When? Analysing Social Media Traffic and Demographics.”

Cambridge Analytica, Facebook and the Dangers of Data Collection

 In 2018 the New York Times published an article discussing documents obtained from Cambridge Analytica, a UK based organization deemed responsible for influencing both the Brexit vote and the 2016 election through targeted Facebook ads. The obtained documents detailed the data acquisition of data about tens of millions of Facebook users by Cambridge Analytica, as well as Cambridge Analytica’s connections to both the Trump campaign and the Kremlin (Confessore). In the following months, as more information detailing election tampering in several countries surfaced, the blame shifted to Facebook, whose lack of oversight of account holders’ personal data resulted in a massive privacy breach. In two much-anticipated hearings, Mark Zuckerburg, the founder and CEO of Facebook, testified before the House and Senate on how he had made mistakes regarding the privacy rights of his users, refuting claims that Facebook should never have been allowed  to self-regulate and should not be able to continue to do so in the future (Roose, Kang). The entire scandal resulted in a 5 billion dollar fine from the FTC, with many considering this to be a mere “slap on the wrist” for a company making 55 billion dollars a year in ad revenue (Kang). However, despite all the talk of regulating data collection, the more significant underlying issue escaped the attention of the general public: Big Tech’s monopolistic tendencies.   

At the same time as the 2018 Cambridge Analytica scandal, Google was dealing with its own equally severe legal issues. Google had just been served a 5 billion dollar fine from the EU for abusing its power with the Android operating system (Google gave third-party manufacturers of handsets the Android operating system for free, but forced them to pre-install 11 Google apps, a practice that was determined to violate European antitrust law) to solidify market domination for search engines (Satariano, Nicas). This fine was neither the first nor the last time Google would run into trouble with the EU for antitrust violations, as in 2017 they had been  fined 2.7 billion dollars for prioritizing their shopping service Google Shopping in search results. A year later, in 2019, the EU again fined Google, this time handing them a hefty 1.7 billion dollar penalty for prohibiting advertising partners from working with other competitors. That same year, the EU opened an ongoing investigation of Google’s use and collection of data (Hamilton). However, despite this dubious track record, Google did not receive any scrutiny from US lawmakers, likely because all of Google’s wrongdoings have been in the realm of anti-competitive behavior and not (yet) privacy violations. Due to a lack of action in the US, Big Tech is able to continue collecting and using data to the detriment of consumers. 

David vs. Goliath: The Fight Against Big Tech

The key to leveling the playing field in the world of technology lies in the problem itself: data. Data allows Big Tech to crush its competitors and make a considerable profit doing it. Therefore, the easiest way to increase Google, Amazon, and Facebook’s competition is to take away their data…but how? Tech and privacy activists alike have been thinking of effective tactics that would solve this issue, but very few have actually been implemented, due to a lack of both government cooperation and consumer support. However, one of these activists, Alastair Mactaggart, masterminded a law that would force tech companies to reveal all the information they collected about a person if that person asked and would allow an individual to demand the company stop selling their data (Confessore). Mactaggart, who had owned and run a real-estate business in Silicon Valley for many years, had no tech background. However, like many other activists, he had realized that the US had no comprehensive law regulating data collection and use, and was convinced that this needed to change–fast (Confessore). It was at this point that Mactaggart began lengthy negotiations with the legal Goliath that was Big Tech. However, this legal barrier did not deter Mactaggart, and after months of negotiation, the law passed the Senate, taking effect in 2020 (Confessore). However, passing laws that regulate Big Tech is very rare due to their legal and political influence, so it is critical to take steps now to prevent tech companies from becoming even more powerful. Additionally, I believe that the best solution is not to break-up large tech companies, as this is a brute force solution that only considers the present, with no plan of action for the future. We should not simply “kill Big Tech” but instead use more reasonable and surefire ideas to regulate it. The most effective of these ideas is a combination of a so-called “Digital Authority” and a law that makes dominant companies “unlock their data.” The former of these two proposals is relatively self-explanatory: a new government organization with a purpose similar to the FCC, but focused on encouraging competition in the tech industry. The latter part of this idea–unlocking the data– is more complicated. What unlocking the data boils down to is forcing companies like Google, Facebook, and Amazon to make the data they collect accessible to competitors in one of two ways. The companies could either give competitors access to all the data they collect or allow consumers to move all their data to a competitor’s platform, with both options effectively breaking the feedback loop mentioned earlier (Lohr).

Do What You Can! How You can Contribute Today to the Big Tech Problem

Despite the end goal being legislature, this is not to say that individuals cannot contribute, as without support from voters people in positions on power are not motivated to make change. It is therefore our duty to inform others about the gravity of the problem, as many are uninformed about the dark side of a better online shopping, browsing or watching experience. Informing our community that Big Tech does not need to die for our privacy to live is a crucial step in regulating Big Tech correctly. If we work together we can cause meaningful social change to protect our privacy, democracy, and integrity. 

Please Share Your Thoughts!

I would greatly appreciate it if gave me some constructive feedback about my project–even a short sentence could help!

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COMMENTS: 8
  1. April 25, 2020 by Menna

    I love this project and I think every teenager should see this! Nobody thinks twice about privacy concerns because technology is such a vital part of human existence nowadays. I try to limit myself to less than an hour a day on social medias and other apps and little things like that will help protect ourselves and identity. But overall greta project and very well researched/informative.

  2. April 25, 2020 by Otto

    I think it’s great that you are already so aware of the problem! I completely agree, and I believe that hopefully in the near future it will no longer be our responsibility to protect our privacy.

  3. April 26, 2020 by Delfine

    Your investigation into tech giants and their mildly sinister penchant for data mining is as informative as it is scary. The amount of work you’ve done is impressive. As you mentioned, these tech giants have immense power over the government, simply because of the sheer amount of revenue they make, meaning that making decisions against them is incredibly hard. It’s worth noting the impact of this on democracy, especially in the US. Because of these tech giants’ desire to keep making money, they seem to be vehemently against stopping targeted ads. In the case of Facebook and Google, this is particularly troubling when it comes to political ads. As I’m sure you know, Facebook has little to no regulation over political ads on the platform, meaning that politicians can essentially put up whatever they like. These potential lies are then getting targeted at specific people, and, because of the micro-targeting, there’s a chance they won’t ever see the other side of the story, leading to a more polarised political spectrum. Additionally, because only the rich can really buy a certain amount of ad space, politics has become increasingly confined to the privileged. And of course, Facebook and Google won’t care, because, in the end, all that they are doing is making more money.

    Thank you so much for making a project that I feel really strongly about! It was really worth the read :))

    • April 26, 2020 by Otto

      I’m so glad you care so much about this issue! As you mentioned, Facebook has made little effort to hide the fact that they are sacrificing democracy for profit, refusing to prohibit political ads on their platform even after Twitter made an effort to stop the spread of misinformation by banning them. I completely agree with your assessment of the situation, as a hyper-divided nation has no means of re-uniting itself when the people who have the power to cause change are kept in power by the very systems in need of change.

  4. April 26, 2020 by Theo

    Hey Otto,
    This topic is very interesting to me, and I think that I have, over time, really changed my mind about this topic. Though companies have been attempting to garner information on clients since the start of the 20th century, using clippings from personal ads in the paper no less, it’s only really with the birth of the world-wide web that it’s been taken seriously, and because this idea is so new it’s something that even we, the youngest generation, has been able to see grow and take shape. And really, with Big Data, it’s hard not to be enamored by all of its glitzy promises–so much becomes “free” (while you’re really just selling your data) and it leads to predictive algorithms that can provide a lot of benefits for you in the long term. Yuval Noah Harari, historian and writer, writes about this in his book “21 Lessons for the 21st Century,” and how, with Big Data taking a larger and larger role in our lives, so much would be possible. If you allow it to take body readings, the computer would know instantaneously when you’re ill, and could know your needs even before you know them. But I think it was Cambridge Analytica that really opened the eyes of the world to the danger of Big Data. Before it all seemed so benign–sure, you’re helping companies increase their margins, but whatever right? You’re seeing ads for things that you want to buy now! Target is more likely to give you those diaper coupons if you’re pregnant (https://www.forbes.com/sites/kashmirhill/2012/02/16/how-target-figured-out-a-teen-girl-was-pregnant-before-her-father-did/#1927bbfe6668). But now, knowing that they can and will influence your opinions? That elections are at stake? All of a sudden Big Data is scary again.
    All of this is to say, good presentation. Nice timeline all the way from the Gilded Age to the Information Age, and an interesting connection to antitrust laws. Thank you for putting this all together!

    • April 26, 2020 by Otto

      Hi Theo, it’s really interested how your perspective has shifted over time on this issue. I think that many people feel exactly how you did not too long ago, as the potential for Big Tech to help solve a variety of problems is a tantalizing idea for many people. However, as you said, the potential devastating harm that technology can cause is present as well. I think your change of view demonstrates an impressive ability to overcome a strong bias, as it is much easier to tell yourself that the ends (Big Tech using its power to help people) justify the means (exploiting our data for profit) than it is to understand how and why we need change.

  5. April 26, 2020 by Carl Thiermann

    Otto—Even though I like to think of myself as being well-informed on significant financial and social issues, I was surprised to discover just how little I actually knew about Big Tech and data mining and privacy. This is comprehensive and well-informed—and the simple graphic about Amazon’s market share sets the stage nicely for the discussion that follows. I was very intrigued by the interview with Alistair McTaggart and it’s good to know that a well-informed citizen, even someone without a tech or legal background, can manage to bring forward significant legislative reform. Very impressive, I thought. I liked your concise introduction and no-nonsense tone, which reminded me of some of the Europeans who have tried to make companies like Google pay taxes in Europe—without success as of yet. It’s encouraging that other global citizens are keeping a wary eye on Big Tech as I will try to do so!

    • April 26, 2020 by Otto

      Thanks for reading my project! It’s great to hear that you learned more about the issue from my essay and I’m glad you liked it.

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