- Tech companies are facing pressure from all sides: governments, consumers, and their own employees.
- It’s resulting in governments worldwide issuing new regulations or filing landmark lawsuits.
- Consumers and employees are also putting pressure on tech firms to evaluate their impact on society.
- Visit the Business section of Insider for more stories.
The walls are closing in on the tech industry.
Governments from Australia to the US are cracking down on big tech companies. Employees are working to form unions at firms like Google and Amazon. And consumers appear to be more distrustful of the world’s biggest platforms than ever before.
The increased level of scrutiny on Big Tech marks a reckoning of sorts for the industry, one borne out of an increasing understanding of the power these companies wield and a shifting cultural mood toward activism and holding the powers that be accountable.
Experts say it will result in a seismic shift in the industry and one that is already affecting governments, tech companies, and consumers alike.
“There was a golden era when people focused on the enormous good technology could do to connect users to one another and democratize access to information,” Alexandra Givens, president and CEO at the Center for Democracy and Technology, told Insider. “Now, there’s increasing recognition that with this great power comes great responsibility.”
Governments are ratcheting up the pressure on Big Tech
Last summer, something unprecedented happened: the CEOs of Amazon, Apple, Facebook, and Google testified before Congress at the same time over concerns they engaged in anticompetitive practices – and they got grilled.
It marks a turning point, not only in how lawmakers on both sides of the aisle view the tech giants, but also in how prepared they are to scrutinize them. As Givens noted, lawmakers staffed up ahead of the hearings in order to be better prepared to question tech CEOs, an effort she expects will continue to “bear fruit” in 2021. (The most recent tech-focused government appointee is Tim Wu, a Columbia University law professor and outspoken critic of Big Tech, who will serve on the National Economic Council.)
State governments are also now beginning to probe tech giants’ business practices on numerous fronts: A group of dozens of states have filed their own antitrust complaint against Google; the Arizona House recently passed a bill that would allow app developers to use their own payments systems, circumventing the tariffs imposed by Google’s and Apple’s app stores; and Maryland is imposing a new tax on revenue from digital ads sold by tech giants.
The US isn’t the only one taking action over how tech companies behave. Just in the last month, the UK Supreme Court ruled that Uber should count its drivers as workers, an issue Uber, as well as Lyft, Instacart, and DoorDash, have fought against in the US as well. And in Australia, the government passed a new law that requires Google and Facebook to pay publishers in order to display their news content in search results and on news feeds.
“It reflects a growing recognition of the fundamental role that technology plays in people’s lives: from how we discover new information to how we connect with friends and family, to how we access job opportunities, find housing, access government benefits,” Givens said.
And, of course, there’s the issue of Section 230. The law, officially known as the Communications Decency Act of 1996, is a point of contention for both Republicans and Democrats – it states that internet platforms like Facebook or Twitter can’t be regulated as publishers, meaning they can’t be held accountable for speech on their platforms.
Givens said this issue, and the issue of misinformation on social media platforms more broadly, is more top of mind than ever before following the 2020 election, which she described as a turning point for many people in realizing the effects online public discourse can have on democracy. As a result, Facebook and Twitter actually changed their policies and instituted bans they had previously been reluctant to impose.
“We suddenly saw this flourishing of far more creative ways to try and improve the health of information on these online services, and you could tell that was the companies really trying to rise to the moment and importantly, rise to public pressure about the moment,” she said. “This didn’t all happen in a vacuum. This was from civil society, organizations, community, activists, employees, all calling on them to do more.”
Consumers and employees are holding tech companies accountable
But government crackdowns are just one piece of the puzzle: there’s also been a noticeable shift from in thinking among both tech employees and the customers they serve.
Two Pew Research Center surveys from the last two years show that Americans have a much less rosy outlook on Big Tech than they did in the past. A 2019 survey showed that the percentage of Americans who believe that tech companies have a positive impact on society plummeted more than 20 percentage points from 2015, from 71% to 50%. On the flip side, those who felt tech companies have a negative impact rose from 17% to 33% during this same period.
And last year, a second Pew survey found that 72% of adults in the US believe social media companies have too much power and influence in politics, with about half of respondents on both ends of the political spectrum saying the government should regulate tech companies more than they currently do.
Givens chalked up the increased consumer distrust partly to increased awareness among consumers about how their information is being used and shared, which is inspiring tech companies to make changes to their products – Apple, for example, has long touted its commitment to privacy, but it will soon roll out a new software feature that goes one step further: It will allow users to opt out of tracking for advertising purposes, a tool that caused an uproar from app developers, and from Facebook.
“There’s an appetite for businesses to compete on privacy as an asset that they can market to users,” Givens said.
Facebook has been hit with that consumer pressure as well in the form of outrage over its messaging app, WhatsApp. In January, WhatsApp issued new terms and conditions that revealed to many users that the app shares user data with its parent company, Facebook. It sent users into a frenzy and caused many of them to switch to a different messaging app, Signal, which resulted in WhatsApp delaying the date by which users would need to accept the new terms and conditions. Still, WhatsApp and Facebook haven’t adjusted their ways as a result of users’ frustration, at least not yet.
But beyond consumer skepticism, there’s another powerful force brewing inside tech companies: employee activism.
In January, more than 200 employees at Google formed a union known as the Alphabet Workers Union. The union, a rarity among Silicon Valley tech giants, has a stated goal to promote more inclusive working conditions at the company and ensure executives act in the best interests of both society and the environment.
Sonny Tambe, an associate professor of operations, information, and decisions at the Wharton School at the University of Pennsylvania, told Insider he believes the newfound energy around this initiative is a spillover from the activism around social justice in the US last summer. And tech companies can’t afford to ignore that momentum, he said, because of how competitive the industry is.
“I think part of the halo effect for tech has been, they’ve been some of the best places to work, and this is important to them,” Tambe said. “These firms are competing, not just for customers, but also for workers, and workers are not going to stop having strong opinions about the way the world works and the way that their employer impacts the world around them.”
That employee activism has been bubbling up for years at Google, beginning most notably in 2018 with the Google walkout in protest of sexual misconduct and most recently with the firings of some of its top AI ethicists. At Amazon, an AWS employee recently filed a lawsuit alleging racial and gender discrimination at the company; Amazon workers have protested warehouse working conditions throughout the pandemic (and lawmakers are investigating Amazon’s COVID response as well); and at one of the company’s warehouses in Alabama, workers are pushing to unionize, which a union president who would represent those employees linked to the Black Lives Matter protests as well.
Tambe said he believes there’s a growing understanding among tech workers that because they are highly skilled and have a lot of agency, it is incumbent on them to be part of the larger conversation about how their companies are held accountable.
“These forces that are converging on Big Tech, they’re substantial,” he said. “A lot of stakeholders are realizing at a similar time that not all tech is moving us forward in positive ways, that these firms are very large and powerful, and that as consumers, as customers, as regulators, we need to be quite cognizant of this.”