Cow­boy tech gi­ants fail to show at lastchance sa­loon

The Sunday Telegraph - Money & Business - - Business - Ben Mar­low

‘The end of the Wild West”. Those were the words of one ex­citable Amer­i­can sen­a­tor as he pre­dicted a loom­ing po­lit­i­cal back­lash against Sil­i­con Val­ley’s big­gest names. De­spite a slew of scan­dals in re­cent months, Google and Face­book, in par­tic­u­lar, have failed to con­vinc­ingly clean up their act, leav­ing it to Wash­ing­ton to flex its mus­cles, Demo­cratic sen­a­tor Matt Warner threat­ened.

He was speak­ing as Face­book’s Sh­eryl Sand­berg and Twit­ter boss Jack Dorsey were ques­tioned by the Se­nate se­lect com­mit­tee on in­tel­li­gence. Google boss Larry Page dis­played shock­ing ar­ro­gance by choos­ing to not turn up.

The tech ti­tans can hardly com­plain if the back­lash is fierce. The se­nate com­mit­tee fo­cused on what the tech­nol­ogy gi­ants were do­ing to pre­vent fu­ture elec­tion med­dling – answer: not enough – but the charge sheet is grow­ing al­most by the day, and with it con­cern that they are have sim­ply be­come too pow­er­ful and un­ac­count­able.

Just last week, a re­port backed by the Arch­bishop of Can­ter­bury called for so­cial me­dia net­works to be reg­u­lated like wa­ter and energy sup­pli­ers, while Sa­jid Javid, the Home Sec­re­tary, warned that the in­ter­net gi­ants would face stiff new rules if they failed to in­ten­sify ef­forts to stop pae­dophile ac­tiv­ity.

They have been com­pared to the oil barons of the 19th cen­tury for the power they wield, and likened to cig­a­rette-mak­ers be­cause of their ad­dic­tive and harm­ful prop­er­ties. Bil­lion­aire in­vestor Ge­orge Soros has de­scribed Sil­i­con Val­ley’s big names as a men­ace to so­ci­ety who ex­ploit their en­vi­ron­ment purely for profit.

Yet the tech in­dus­try ei­ther seems un­sure of how to re­spond to the back­lash or sim­ply un­will­ing.

By re­fus­ing to turn up at last week’s Se­nate hear­ing, Google has made it clear what it thinks of its de­trac­tors – they can go whis­tle. Face­book has tried a more clever tac­tic, agree­ing to co­op­er­ate but plead­ing that it can’t solve its prob­lems alone. Twit­ter’s Dorsey sud­denly seems quite con­cil­ia­tory but it has been re­mark­ably slow to shut­down fake ac­counts or those spread­ing hate. Mean­while, Ama­zon seems to believe it has done lit­tle wrong de­spite some ev­i­dence of poor work­ing con­di­tions in its ware­houses and wide­spread de­spair over its tax af­fairs.

The im­pres­sion is that the Sil­i­con Val­ley gi­ants se­cretly feel un­touch­able. No won­der. Share prices of the Fang stocks re­main on a seem­ingly un­stop­pable tra­jec­tory and the pub­lic largely seems happy to con­tinue us­ing their ser­vices.

One ma­jor tech in­vestor told me this week that they are un­con­cerned by the threat of reg­u­la­tory ac­tion. On the con­trary, the mes­sage they have been de­liv­er­ing to the tech chief­tains is “keep your head down, ig­nore the noise, and con­tinue do­ing what you’re do­ing”.

At the mo­ment, they are bet­ting that reg­u­la­tors will go easy on them but such com­pla­cency seems aw­fully naive and short­sighted for an in­dus­try built on in­no­va­tion and en­trepreneur­ship. Yet these com­pa­nies have be­come re­mark­ably suc­cess­ful by tread­ing a much finer line be­tween risk-tak­ing and reck­less­ness than most other com­pa­nies.

Still, con­cern is grow­ing in some cir­cles. Pri­vately, one se­nior fig­ure told me of his fear that the big tech com­pa­nies could be­come as toxic as ge­net­i­cally mod­i­fied crops. The last time a new GM food was cre­ated was decades ago.

‘Google has made it clear what it thinks of its de­trac­tors – they can go whis­tle’

Branches that peo­ple still bank on

Few top­ics are as emo­tive as the hum­ble bank branch. I don’t think I have been in one this year. Like most of my gen­er­a­tion, my bank­ing is done al­most en­tirely via mo­bile phone these days. Does that mean bank branches should be con­signed to his­tory? No. There are mil­lions of older peo­ple and those liv­ing in ru­ral ar­eas that still rely heav­ily on their local branch. Many of these will ei­ther find on­line bank­ing con­fus­ing or sim­ply strug­gle to ac­cess the in­ter­net.

Still, that hasn’t stopped RBS from do­ing its best to bring about the swift demise of the branch sys­tem as part of its on­go­ing at­tempt to ag­gres­sively cut costs. It has an­nounced the closure of nearly half its 1,000-plus net­work since De­cem­ber.

The ad­vent of on­line bank­ing has been revo­lu­tion­ary, help­ing to shake up a sleepy world dom­i­nated for far too long by the big banks. But it’s not for ev­ery­one. MP Nicky Mor­gan is right to raise con­cerns about fi­nan­cial ex­clu­sion. Vul­ner­a­ble cus­tomers need pro­tect­ing.

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