Big Tech’s big break-up is coming
Expect more victim blaming from Elon Musk and the inevitable collapse of X, more antitrust lawsuits against Google, Facebook being held to account for ignoring the mental health dangers of Instagram, and more in 2024
In a portent of things to come in 2024, Google lost the first of many major antitrust lawsuits on 11 December. After a month in a San Francisco courtroom, Google has been found guilty of all 11 counts of anticompetitive behaviour by a jury, in a case brought by Fortnite-maker Epic Games. Further arguments will be made in January but this decision is likely to have a major – potentially existential – impact on Google’s Android business. It charges app developers a 30% fee for sales through its Play mobile app store – something that the jury found had reduced competition.
Democratic Senator Amy Klobuchar immediately said the US “must take the next step in Congress to finally update our consumer laws for the digital age”.
Google still faces two more huge antitrust cases that will be decided in 2024. In a 10-week trial, which ended this month, the Department of Justice made a strong case that Google’s search business is a monopoly. Closing arguments will be heard in May, but the prognosis is pretty bad for the $280-billion search business.
In a clearly anticompetitive deal, Google pays Apple a whopping 36% of search revenue generated by being the default search engine on iphones and ipads – of which more than one billion have been sold.
Senior vice-president for search Prabhakar Raghavan revealed that Google paid $26.3-billion in 2021 to be the default search engine for Apple, Samsung and other smartphones. Using this figure, Digital Content Next CEO Jason Kint estimates that Google makes “at least [$90-billion] of its current annual revenue in search default deals”.
In an embarrassing email that Google fought to keep private, its vice-president for finance, Michael Roszak, wrote that only “illicit businesses (cigarettes or drugs) … could rival these economics”.
Surveillance capitalism is a good business. As Microsoft CEO Satya Nadella said when called to testify about trying to replace Google with Microsoft’s own Bing search engine: “You get up in the morning, you brush your teeth, and you search on Google.”
Similarly, Facebook owner Meta is facing several significant lawsuits, the most damning of which are revelations that it knew about the mental health dangers for teenage girls using Instagram but ignored them.
Facebook “designed psychologically manipulative product features to induce young users’ compulsive and extended use” of Instagram, according to the lawsuit filed by the attorneys general of 42 states in October. “Its motive is profit.”
In November, portions of this lawsuit were unredacted, revealing that Meta executives were fully aware of the mental health threats.
“It’s not ‘regulators’ or ‘critics’ who think Instagram is unhealthy for young teens, it’s everyone from researchers and academic experts to parents,” wrote Karina Newton, Instagram head of policy, in an email in May
2021. “The blueprint of the app is not designed for an age group that don’t have the same cognitive and emotional skills that older teens do.”
As whistle-blower Frances Haugen revealed that Facebook “[prioritises] profit over safety” a few years ago, another 2018 email points out that “the lifetime value of a 13 y/o teen is roughly $270” to Instagram. For $270, under-13s were being exposed to content the app knew they didn’t “have the same cognitive and emotional skills that older teens” have to handle it.
Meanwhile, CEO Mark Zuckerberg’s still-born metaverse concept seems to have been shelved. It flopped for many reasons, but in no small part because the virtual reality (VR) promise of a metaverse was eclipsed by another technology – which actually worked and didn’t require a $400 VR headset.
Openai’s gobsmacking artificial intelligence (AI) chatbot, CHATGPT, has been the darling of the tech world since its launch on 30 November 2022. It reached one million users in five days and is the poster child of the generative AI movement.
Openai CEO Sam Altman was inexplicably fired in November by a board seemingly concerned about the threats of AI, and who wanted to rein in its commercialisation. They achieved the exact opposite when Altman was hired by Microsoft and then returned to Openai without that board after almost all of its staff threatened to quit.
From Altman’s Friday firing – for which Microsoft was given literally one minute’s notice, despite its 49% shareholding through a $13-billion investment – to his Tuesday return as CEO, the world experienced a significant change. The consequences of this change will unfold over the years, but already AI experts are concerned that AI will become too powerful and continue to use the same biases as Homo sapiens.
Although the US, the UK, the EU and China signed a significant treaty to work together to monitor AI development, called the Bletchley Declaration, these fears are – and should be – front of mind as the game-changing technology becomes more widespread.
Google’s Bard and Amazon’s Q are playing catch-up to Openai, which power’s Microsoft’s Copilot – and everyone in Big Tech and Silicon Valley is throwing money at AI start-ups.
The two biggest players in internet advertising, Google and Facebook, will also continue to face existential threats to their revenue models because of the various court cases and the European Union’s new privacy and marketplace laws – the Digital Services Act (DSA) and Digital Markets Act (DMA).
While they do, the most beloved of social networks, Twitter, is likely to die in 2024.
Once considered a genius, Pretoria-born Elon Musk has destroyed the platform he’s renamed X. After buying it for $44-billion in October 2022, it has halved in value, he’s admitted. His erratic, impulsive decisions and the firing of 80% of its staff have seen advertisers flee the “digital town square”.
The final straw seemed to be Musk’s endorsement of an anti-semitic conspiracy theory in November by tweeting it was “the actual truth”. A day later, a hate speech group published its analysis of how posts glorifying Hitler and Nazis were appearing next to adverts from Apple, IBM, Oracle, Bravo and Xfinity. Musk’s anti-semitic tweet also saw Warner Bros, Paramount, Sony Pictures, Comcast/nbcuniversal and Lionsgate “pause” their advertising.
Musk sued the hate speech organisation – Media Matters – blaming it for manipulatinherently ing Twitter’s algorithm in a sad, sad display of bullying by the world’s richest person.
Musk eventually apologised for his slur – which saw an estimated $75-million of advertising revenue lost for the final quarter of the year – at a New York Times investor event. Known for his erratic behaviour, Musk put the final nails in Twitter’s coffin with an unforgivable rant.
“Don’t advertise,” he said, adding: “If somebody’s going to try to blackmail me with advertising, blackmail me with money? Go fuck yourself.”
He then slowly and deliberately
“Go. Fuck. Yourself. Is that clear?”
Expect more victim blaming from Musk and the slow, inevitable collapse of X, once known as the thriving social network Twitter.
Tiktok is now the dominant social media platform, sucking up all those advertisers Musk told to “go fuck yourself”. With more than a billion users, it’s the place all of the youth – and therefore future consumers – find their entertainment and, increasingly, news. The Russian invasion of Ukraine in February 2022 was arguably the tipping point for Tiktok’s now supremacy, although its web traffic has long since eclipsed all the previous (US) tech giants, including Google.
But the Chinese-owned platform is rampant with misinformation and privacy concerns. The EU fined it €345-million for its lax privacy setting that made new accounts “public-by-default”, including those for under-13s.
The EU’S very strict General Data Protection Regulation privacy legislation is arguably the best thing to happen to the internet since the internet itself. Unlike the free-forall allowed by US laws, Europe is holding social platforms and tech giants to account, especially with the DSA and DMA that came into effect in 2023 and will provide the basis for an expected crackdown in 2024.
The two major tech themes for 2024 will be the rise and rise of AI, and the fall of privacy-stealing surveillance capitalism. The latter can’t happen soon enough.
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