Big Tech Challenged in Big Way

Big drama has always dogged Big Tech, but against a backdrop of frothing national and global forces battling for the public’s mindshare, Silicon Valley faced an onslaught of scrutiny in 2020 that only intensified as the months pressed on.

There is no question that with the coronavirus pandemic and various lockdowns, more people are living more of their lives online. And that puts the way large tech companies manage their platforms at the very center of modern life.

After years of posturing, the percolating suspicions by lawmakers and regulators over the tech sector now seem to be boiling over. The common refrains swirled around misinformation, antitrust, data privacy and, to a lesser but more vocal degree, censorship and bias against conservatives — though the latter issue looked like more of a flamboyant sideshow.

Republican lawmakers seemed to be competing in screaming matches at times over who can best skewer Twitter’s chief executive officer Jack Dorsey. The words of Sen. Ted Cruz, R-Tex., from an October hearing — “Mr. Dorsey, who the hell elected you and put you in charge of what the media are allowed to report and what the American people are allowed to hear…” — may reverberate for years.

Tech animus, thy cup runneth over. While it’s not clear how much the public tracked what was happening on the Congressional floor or in video calls, for those paying attention, the shift was more than palpable. It seemed inevitable — particularly after what had come before.

The federal government grappled with the technology industry for years, never quite sure what to do with a fast-moving sector it hardly understood. Probes, calls for testimony and even the occasional large fine changed little in Big Tech’s modus operandi.

In the pre-Donald Trump times, there were high hopes that the government would finally begin to comprehend the opportunities — and the implications — of what companies like Amazon, Apple, Facebook and Google were doing. The Obama years were perhaps the most tech-savvy of any presidential administration, with the then-president appointing Megan Smith as the nation’s first chief technology officer in 2009 and often visiting with high-profile executives throughout his tenure.

In contrast, President Trump seems to be at war with the tech platforms. Congress appears to be as well, especially with Facebook’s role in the Cambridge Analytica scandal, in which the latter used the data of millions of Facebook users without their permission on political ads in the 2016 presidential election.

When it comes to tech, the issue sucked up much of the oxygen in Capital Hill until last year, when the social media giant was ordered to pay a $5 billion fine over the matter.

From there, the plot thickened on numerous fronts. Democratic presidential candidates like Elizabeth Warren and Bernie Sanders made calls for breaking up Big Tech a feature of their campaigns. Other democratic senators and House representatives criticized social media platforms for spreading misinformation, including conspiracy theories like Q Anon.

When Facebook and Twitter occasionally throttled attempts to peddle false information online — deprioritizing certain posts and eventually slapping warning labels and adding contextual links to others leading up to and including the 2020 presidential election — they cast a wide net that ensnared some of Trump’s posts as well. Conservatives roared about “censorship” and bias, driving their ranks to alternative social platform Parler, an app touting support for free speech.

In November, Parler swelled with the influx. At one point it became the most downloaded app on iPhones and Android devices and in one week its ranks swelled to 10 million, doubling its user base.

Notably, some of the shine may be coming off now, as users complain — in Facebook groups about Parler, no less — that the app’s dominant right-wing orientation makes it a little too free of conflict. As one member stated: “What’s the point of just seeing posts from conservative newsgroups, but not my friends or family?”

Although the year brought plenty of absurdities, it also set the stage for the serious business of reining in social media companies, along with other major tech platforms.

Amazon founder Jeff Bezos appeared in front of Congress for the first time this year, albeit via video conference, indicating that its marketplace practices will get a much closer eye. Abroad, Europe is not waiting: The European Commission, led by Margrethe Vestager, its vice president for digital issues, levied antitrust charges on the e-commerce titan in November.

“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” Vestager said in a statement at the time. “Data on the activity of third-party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers.”

The EU has similarly taken aim at Google over the years, resulting in fines of close to $10 billion over antitrust violations. But the company’s latest woes have come from its home turf, as lawsuits in the U.S. continue to mount.

Google has been hit by no less than three antitrust lawsuits within weeks, with the latest arriving last Thursday from a bipartisan group of 38 states and territories.

Already defending itself against accusations of unfair practices to bolster Google advertising, the company now faces charges alleging that it holds a monopoly in search, the very cornerstone of its business.

The suit maintains that the company tweaks search results rankings to harm rivals and promote its own products. The activities go beyond just web searches and mobile devices, it said, supposedly extending to connected vehicles, smart speakers and other devices that integrate with its Google Assistant voice feature.

Although federal regulators are similarly looking at Apple over App Store policies that may favor the iPhone company’s own software and services or treat app makers with an uneven hand, recent pressure has come from its developer community.

Epic Games filed suit against Apple accusing it of antitrust violations for yanking its Fortnite game out of the App Store because it included an alternate payment feature that bypasses Apple’s 30 percent cut in in-app sales.

Facebook jumped on the bandwagon as well for similar reasons, in addition to waging a campaign against an iPhone update that will require people to opt in to user tracking for ads. The social media giant casts Apple as hypocritical, noting that the latter also tracks users, but wouldn’t be subject to its own policy. This is the sort of attention that could draw investigators, which means 2021 could wind up being significant for Apple.

As for Facebook itself, the owner of Instagram, WhatsApp and Messenger has been questioned in Washington, D.C., so many times, it wouldn’t be surprising if ceo Mark Zuckerberg barely raised an eyebrow at the subpoenas rolling in. Nor is Facebook unfamiliar with investigations or even hefty fines.

What it may be less familiar with is a maelstrom of legal actions and scrutiny hitting the company on numerous fronts, with new levels of potential jeopardy.

The Federal Trade Commission and attorneys general from 47 states revealed earlier in December that it’s suing Facebook over charges that the company is allegedly abusing its market dominance. The suit seeks to break off Instagram and WhatsApp, which were acquired in 2012 and 2014, respectively.

The case is largely considered one of the most serious to be leveled at the social media company. According to a statement by Ian Conner, director of the FTC’s Bureau of Competition, “Facebook’s actions to entrench and maintain its monopoly deny consumers the benefits of competition. Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive.”

The FTC also demands that Facebook and other social media platforms — like Google’s YouTube and, for some reason, Amazon — must explain how they use people’s data. The obvious answer is so that these companies can target ads. But the details could lay bare the policies and tactics used by Facebook and the others.

Meanwhile, in a move that may impact the businesses of all of these companies, Europe has proposed two new bills designed to put large tech players more on the hook for their platforms’ content, potential anticompetitive behavior and e-commerce products.

That only scratches the surface. In early December, President Trump signed an executive order guiding how federal agencies will use artificial intelligence, setting a tone that could ripple out to broader AI development.

There’s also the fate of net neutrality to weigh, which outgoing Federal Communications Commission chairman Ajit Pai wants to undo. Net neutrality describes a scenario in which internet traffic is treated equally, instead of so-called “fast lanes” and “slow lanes” applied to some online companies and not others.

Most importantly, the start of a new presidential administration looms, which could either ease tech’s worries or intensify them.

Either way, there’s no doubt that 2020 saw some major steps to advance oversight of the big tech players. And what comes next could set a course for the years to come.

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