Cowboy tech giants fail to show at lastchance saloon
‘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.