Tech companies are fighting for their future as the U.S. government weighs antitrust actions and presidential candidates ramp up the rhetoric against Silicon Valley.
Despite waning public trust, the sector’s leaders are courting consumers’ support in a bid to remain intact.
New scrutiny has come to the tech industry after widespread backlash following the Cambridge Analytica crisis for Facebook and questions for Google about how it treats workers. Many tech companies have tried to get ahead of the issue by calling for more regulation and pushing privacy as a top concern for tech companies and developers.
The story hasn’t stopped, however, and lawmakers in Washington seem unlikely to leave the tech industry alone.
For years the US government stood by as big tech companies like Facebook and Google growth hacked and gobbled up competitors on their way to dominance, with barely a mention of “anticompetitive” concerns. But that lax attitude is changing. Word continued to leak this week about possible antitrust investigations by the Justice Department and the Federal Trade Commission, who reportedly divvied up companies like a couple might divide household chores. (The DOJ calls dibs on Google and Apple, while the FTC gets Facebook and Amazon.) House Democrats, meanwhile, are launching an antitrust probe of their own over competition in the tech industry more broadly.
Now tech companies are making their case to the American people in the press with interviews and statements from CEOs and other senior leaders.
Many Big Tech leaders were at the Code Conference, where they fielded questions about possible antitrust action.
“We don’t spend a lot of time talking about it,” Andy Jassy, CEO of Amazon Web Services, said about the possibility that federal regulators could spin off his unit from its parent company, Amazon.
Jassy, speaking at an industry gathering called the Code Conference roughly 2,000 miles from Washington, said CEO Jeff Bezos and others in Amazon’s inner circle aren’t preoccupied by a potential forced restructuring at government hands. Far more front of mind, he said, are Google and Microsoft gaining ground into the cloud computing business AWS has long dominated.
The companies want to make the case that consumers won’t be safer after behemoths like Facebook are broken into smaller chunks.
Advocates for tech company breakups say that by dividing the industry’s biggest firms into their component parts, regulators can force the newly solo firms to compete with one another to the benefit of consumers. An independent Instagram and Facebook, the thinking goes, would have an incentive to compete on everything from user privacy to anti-harassment measures — rather than continue to hoover up users’ data with little or no accountability.
The company’s executives argue the opposite. Instagram head Adam Mosseri, for example, was bluntly dismissive of the prospect of his firm being cleaved from Facebook.
Other leaders try to strike the balance between acknowledging the need for more regulation and pushing back on the idea of a sector-wide breakups.
YouTube CEO Susan Wojcicki conceded in a tough interview on stage Monday afternoon that “there’s more regulation in store for us.” While she wasn’t directly asked about a potential breakup of the company, she did say that You Tube “would figure it out” in the event that regulators or other circumstances pushed Google to spinoff YouTube.
For its part, Facebook is calling for more regulation, likely in hopes of avoiding any government breakup efforts.
“I think the right answer is to set up the right rules for the internet, because you could break us up, you could break other tech companies up, but you don’t actually address the underlying issues,” Facebook Chief Operating Officer Sheryl Sandberg said in a CNBC interview last month.
She argued that consumers are interested in Facebook fixing privacy issues and election security, neither of which will be addressed by splitting up the company.
“I think scrutiny is fair. I think we should be scrutinized,” Apple CEO Tim Cook said in a CBS News interview last week. “But if you look at our – any kind of measure about is Apple a monopoly or not, I don’t think anybody reasonable is gonna come to the conclusion that Apple’s a monopoly.”
Tech companies face an uphill battle convincing many people that they aren’t too big and too powerful.
“I think it is inevitable that they’ll get broken up,” said Stacy Mitchell, co-director of the advocacy group Institute for Local Self-Reliance. “You can’t mask the kind of structural power that these companies have and maintain that power in a democracy.”
The PR behind the antitrust fight might be just as important as the legal battle, especially since most experts agree antitrust action would be difficult for the government to pursue.
How would you advise tech companies to make their case, PR Daily readers?