There's Blood In The Water In Silicon Valley

The bad new politics of big tech.

The blinding rise of Donald Trump over the past year has masked another major trend in American politics: the palpable, and perhaps permanent, turn against the tech industry. The new corporate leviathans that used to be seen as bright new avatars of American innovation are increasingly portrayed as sinister new centers of unaccountable power, a transformation likely to have major consequences for the industry and for American politics.

That turn has accelerated in recent days: Steve Bannon and Bernie Sanders both want big tech treated as, in Bannon’s words in Hong Kong this week, “public utilities.” Tucker Carlson and Franklin Foer have found common ground. Even the group No Labels, an exquisitely poll-tested effort to create a safe new center, is on board. Rupert Murdoch, never shy to use his media power to advance his commercial interests, is hard at work.

“Anti-trust is back, baby,” Yelp’s policy chief, Luther Lowe, DM’d me after Fox News gave him several minutes to make the antitrust case against Yelp’s giant rival Google to its audience of millions.

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The new spotlight on these companies doesn’t come out of nowhere. They sit, substantively, at the heart of the biggest and most pressing issues facing the United States, and often stand on the less popular side of those: automation and inequality, trust in public life, privacy and security. They make the case that growth and transformation are public goods — but the public may not agree.

The tech industry has also benefited for years from its enemies, who it cast — often accurately — as Luddites who genuinely didn’t understand the series of tubes they were ranting about, or protectionist industries that didn’t want the best for consumers. That, too, is over. Opportunists and ideologues have assembled the beginnings of a real coalition against these companies, with a policy core consisting of refugees from Google boss Eric Schmidt’s least favorite think tank unit. Nationalists, accurately, see a consolidation of power over speech and ideas by social liberals and globalists; the left, accurately, sees consolidated corporate power. Those are the ascendant wings of the Republican and Democratic parties, even before Donald Trump sends the occasional spray of bile Jeff Bezos’s way — and his spokeswoman declines, as she did in June, to defend Google against European regulators.

This has led to a kind of Murder on the Orient Express alliance against big tech: Everyone wants to kill them.

Considering limits on and breakup of Big Tech could be a useful joint New Center/liberal/neo-libertarian project.

@BillKristol / Twitter / Via Twitter: @BillKristol

So Facebook should probably ease out of the business of bland background statements and awkward photo ops, and start worrying about congressional testimony. Amazon, whose market power doesn’t fall into the categories envisioned by pre-internet antitrust law, is developing a bipartisan lobby that wants to break it up. Google’s public affairs efforts are starting to look a bit like the oil industry’s. These are the existential collisions with political power that can shake and redefine industries and their leaders, not the nickel-and-dime regulatory games Silicon Valley has played to date.

The industry has had a remarkable run. The companies at its center — Facebook, Google, Amazon, and Apple are the defining brands — are beloved by consumers, truly global, dominant in the markets. They have also been able to coast on their popularity and their amazing products while largely getting a pass on politics at its higher levels. They spend scads on lobbying — Google’s parent company, Alphabet, has risen to become a top lobbying spender in recent years — to keep the tax collectors and communications regulators at bay, but they’ve never had to fight for their identity against political tides that have defined other major American industries. It’s easy to forget that oil prospectors and junk-bond traders had their moments of glory too; now Wall Street and the oil industries are resigned to a defensive crouch.

This sort of political change happens slowly until it happens fast. Uber provided a new model for a transformative tech giant to crash through with a dark, negative brand. The company’s toxic internal culture and rogue business practices were pure extensions of Silicon Valley’s clichés, not particularly different from things Microsoft was once admired for, or Amazon’s more openly rapacious early years. But the narrative had changed — inequality and misogyny were central American concerns, not as easily brushed past.

Uber is the only one to go down so far. A pollster recently showed me numbers that put the favorable numbers of most of the giant tech brands in the ‘80s and ‘90s; only Uber is sub-50. But this process — call it Uberization — seems to be moving in the others’ direction, fast, and it has the potential to cast a shadow over the sunny brands of the other tech giants.

You can see the tracks laid for each of the tech giants, and there’s no clear way off this path — to downward poll numbers and normal, grubby politics — for any of them.

For Facebook, its move into politics spells trouble in a way none of its privacy stumbles, or control over the media, has. The company was pleased as recently as 2014 to be seen as a major political player. Back then, it was eager to work on a project sharing sentiment data; I wrote a piece announcing the partnership and predicting that Facebook would “replace television advertising as the place where American elections are fought and won.” That was exactly what happened, and it is viewed by many as a disaster.

Now, politics and news are so dangerous to the Facebook brand that its new video platform, Watch, doesn’t have any of it. But it appears to be too late. Although the company initially dismissed the notion that it could have electoral power, the Washington Post’s Margaret Sullivan recently stated the consensus: “Would Donald Trump be president today if Facebook didn’t exist? Although there is a long list of reasons for his win, there’s increasing reason to believe the answer is no.” And that’s coming from Facebook’s natural allies on the left, not the conservatives who don’t like the company’s progressive social views.

Google, meanwhile, has a Goldman Sachs problem: Its smooth image has grown tentacles. The media industry, which gets to tell the story, sees it sucking revenue out of newsrooms alongside the rest of the advertising industry. Conservatives from Matt Drudge — the one media figure who never got a Gmail account — to Tucker Carlson see it as a kind of big brother on the left. Yet it’s losing friends there too. The company’s long, quiet game of gentle Washington influence turned darkly thuggish when the New America foundation — long seen as a harmless channel for worthy tech philanthropy — pushed out the anti-monopoly scholar Barry Lynn and his team after Eric Schmidt lost his temper. Google’s long-standing Washington, DC, presence reflects its early recognition that it was vulnerable to these antitrust concerns, and anyone who has been served the scattered and semi-broken Google+ box over results from Yelp or TripAdvisor or Zocdoc can at least see that argument.

Amazon’s challenge is different. The company has navigated public politics pretty smoothly, and Jeff Bezos’s revival of the Washington Post profoundly changed the way the media sees him. Unlike Facebook and Google, Amazon isn’t engaged in daily trench warfare with the news media for advertising revenue. That takes some of the pressure off.

But Amazon faces a substantive economic case against it, and is target number one for a new wave of regulatory arguments along the lines of Foer’s “Amazon’s Monopoly Must Be Broken.” It controls a reported 43% of online retail, which appears to have helped it beat a direct competitor in the streaming market, Apple TV. Its new push into physical grocery stores makes that reach impossible for consumers to miss. And while Google made New America scholar Barry Lynn a martyr, he and his collaborator Lina Khan’s views were shaped by studying Amazon’s control over the book and then broader retail markets. Lynn wrote a position paper in 2015 for booksellers, and Amazon is Khan’s case study for remaking antitrust law.

Tech is manifestly unready for this new era. They’ve been playing small-ball politics of regulation, and coasting on incredibly high approval ratings. But there are signs they feel the winds changing. You can usually detect a political figure’s problems from their overcompensation, and Zuckerberg’s Midwestern tour had all the hallmarks of a classic reaction to a specific political polling question: “Does he care about people like me?” The move was widely misinterpreted as some kind of beginning to Zuckerberg’s political career. But Zuckerberg is Facebook, and his image is his company’s. His mission was to fix the company’s image, and I’m just not sure this one is fixable.

You can see the shape of how this plays out in a recent exchange between Mark Halperin and Rep. Adam Schiff, in which Halperin asked of Facebook: “Did they put profits ahead of patriotism in their conduct during the campaign?”

This isn’t to say that the end is near for these new giants — or even for Uber, whose business is, it says, still growing. Just that the golden age is over. The new era for them will be normal politics, normal regulation, with California senators deep in their pockets who fight for them as hard as Texans fight for oil, but with a deep bipartisan current flowing against them. They’ll win some and they’ll lose some, and some of their losses may be as bad as what happened to Microsoft in the 1990s when it flew too close to the sun — and then faced an antitrust lawsuit that almost broke the company up and probably changed it enough to benefit, among others, Google.

People watching this from afar sometimes suggest that tech simply has too much money to stop. This is nonsense. Politics is run by politicians, and while they like money, they like attention more. People who think the money tech spends can buy protection from the political system misunderstand their dynamic: The transfers of money referred to blandly as “campaign finance” are equal parts bribery and extortion, and the system works best when the target is scared.

And the political class can smell blood. That Zuckerberg campaign was, to the political world, blood in the water, a signal of a new vulnerability around his company and his industry. That’s a tough place to start before the committee. ●

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