Facebook Isn't Playing Along With Silicon Valley's Humble New Look

Microsoft learned to take government seriously in Washington in the late 1990s, Google in Brussels in the 2000s. Facebook still hasn't learned from its elders' mistakes.

The great American tech companies shuffled into Davos last week. They wanted to talk about human rights, empathy, kids, their profound respect for European politicians — anything but the kind of disruption and growth that any other executives would be touting, and that Donald Trump sold from the big stage.

“You’re looking at a somewhat humbled tech presence,” eBay CEO Devin Wenig told me after one of about a thousand World Economic Forum panels touching on how the field of artificial intelligence could avoid developing the toxic reputation of other recent tech innovations.

Humbled, with a single exception: Facebook. While Uber’s new CEO completed an apology tour and Google’s chief practically begged for higher taxes, the social media giant was strikingly, jarringly apart from the pack: ideological about the power of its algorithms over human judgment and wholly committed to continued, rolling disruption.

“It is not about stability,” one of its top executives, Elliot Schrage, told me. “Stability is actually damaging to us.”

Facebook’s defiant optimism may be a feature of its history. But it feels like a major gamble in this new regulatory moment. European regulators — never shy — are now militant. They have already imposed the “right to be forgotten,” which went from a kind of a curiosity in Silicon Valley to a major compliance task and, increasingly, cultural norm. Germany has begun to enforce its NetzDG law against hate speech. And the General Data Protection Regulation, which takes effect this year, includes an effort to impose what is sometimes called “algorithmic accountability.” There’s a provision that provides for the “right to an explanation” if you believe you’ve been harmed by an algorithm, something that could impose serious constraints, and unwanted transparency, on any company that has machines making choices.

Microsoft learned to take government seriously in Washington in the late 1990s, Google in Brussels in the 2000s. Facebook is still at the beginning of that cycle, seeking more to change the subject than to reshape its ideology or leadership. And while it’s become a kind of insider conventional wisdom that the younger company hasn’t learned from the older ones’ mistakes, it’s not really all that clear how they can avoid the backlash.

Meanwhile Facebook’s peers have pivoted hard into the new tech politics. And the leading face of this new approach is Uber’s new CEO, Dara Khosrowshahi. Unlike the leaders of the new wave of tech giants, he’s a traditional American executive — a skilled politician with high emotional intelligence, not a boy genius engineer who built the thing he runs. And he is methodically making the obvious political moves. He told me he spent much of the week in Davos meeting with heads of state on what sounded like an apology tour.

His message: “That we’ve learned from the missteps of the past and we're a new company, and we believe that growth and partnership is more lasting, and we want to start to have a dialogue with you, and we're going to push you, and we expect you to push back.”

Khosrowshahi is trying to fix the brand from the damage done to the brand by a management team that became famous for its dirty tricks against regulators and rivals, a misogynistic internal culture, and even, notoriously, launching a private investigation into a woman who reported being raped by a driver. And Khosrowshahi is trying to open markets — from the UK to Italy — where regulators beat back Uber’s first cowboy wave.

The fear, as one person articulated it to me, is that in a few years we’ll have fully autonomous vehicles — and mobs will be burning them in streets.

Google’s Sundar Pichai (the company’s founders continue to run its parent, Alphabet) took a similarly conciliatory tack, telling a crowd at the forum that the company has realized its “responsibility to engage better with society.”

“We are happy to pay a higher amount [of tax]!” he even said at one point. “Whatever the world agrees is the right framework.”

The position articulated by Pichai and Khosrowshahi isn’t some innovative new strategy. It’s a recognition of the new reality: that the tech companies have lost their political edge. And most of the tech companies were at pains in Davos to acknowledge that new political environment. The fear, as one person articulated it to me, is that in a few years we’ll have fully autonomous vehicles — and mobs will be burning them in streets.

What is striking is not that the interests of Google, Microsoft, Uber, or Amazon have changed — they’re still fundamentally maneuvering to avoid regulation and criticism — but the extent to which they seem to have shifted their strategies to acknowledge the new politics.

Google, for instance, is deeply engaged in a kind of trench warfare with European regulators, but it’s long past treating them dismissively. And it has focused its public profile on anything but disruption.

“We've welcomed the chance to talk about how technological innovation can help society tackle big challenges, from addressing climate change to enhancing productivity to promoting quality information,” the company’s general counsel, Kent Walker, said.

Facebook doesn’t seem to see the political landscape the same way as its competitors. And the emergence of an almost unanimously chastened new face of Silicon Valley sets its one exception in particularly sharp relief. It was a contrast that came up clearly in a conversation I had with Schrage, the company’s head of policy, on the third floor of a temporary building made of some particularly environmentally friendly sort of wood product.

“What's fascinating is everybody says that they love risk-taking, but there is a conception of risk-taking that never is associated with problems and is only associated with success,” he said, describing that European antipathy to risk as a “cultural phenomenon.”

“It is frankly one of the challenges that European businesses have, particularly startups,” he said. “There's a reason that European startups don't have the same track record as American startups. Part of it's financial, but a lot of it's cultural.”

Facebook doesn’t plan to give in to that culture, or to stop disrupting, he said.

“We are here as the advocates for innovation and the advocates for what the European Commission calls ‘digital transformation,’” he said of Facebook’s presence in Davos.

“It is not about stability,” he said. “The stability is actually damaging to us. Stability favors entrenched media organizations.”

This isn’t to say the company hasn’t done some diplomacy. COO Sheryl Sandberg — the company’s chief diplomat — made conciliatory visits in Paris and Brussels before arriving in Davos. And she gave assembled reporters a speech about the power of Facebook’s advertising product to do good even as it makes the company billions, focusing on the stories of small businesses and even desperate patients, telling the story of a man who placed an ad looking for a kidney donor for his father and found one — for just $12.

But the company’s effort to maintain its self-confident, disruptive momentum has made it a singular punching bag. At one point on a Davos stage, Salesforce CEO Marc Benioff suggested the social network be regulated like cigarettes. George Soros described the social platform as “harmful” and deceptive.

“The owners of the platform giants consider themselves the masters of the universe, but in fact they are slaves to preserving their dominant position,” he said. “It is only a matter of time before the global dominance of the US IT monopolies is broken.”

So it’s no surprise that a large part of Google’s and others’ strategy right now is hiding behind Facebook. Meanwhile, the company is at the top of the hit list of motivated European regulators.

But its strategy when it comes to regulation appears to be primarily to change the subject: Well-intentioned European or US regulation, Schrage warned, could empower authoritarian governments in countries without democratic tradition, which he suggested could make apparent worst-case-scenarios playing out in places like Cambodia even worse.

The message is not well-received, to say the least. And the company is increasingly standing alone.

“They're dismissive,” said Marietje Schaake, a Dutch member of the European Parliament who has emerged as a leading critic of big tech and Facebook, and who nodded approvingly through an address in which Soros described Facebook and Google as a “menace.” “Their tone is still far from acknowledging the serious concerns people have.”

But Schaake predicted that a reckoning is coming, and that the companies will be largely regulated from Brussels and European capitals even as the US stands by.

“It's over,” she said. “The whole tech utopia has come crashing down. Reality has caught up.” ●

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