For all the creepy revelations about US corporate Big Tech, we are so reliant on its “free” services that we ignore its “disruptions”: Amazon laying waste to high streets; Airbnb exacerbating our homeless crisis; Deliveroo cyclists causing traffic fury; or the way it has rendered entire professions redundant and human industries in decline. But the social media giants are less seen now as angels of freedom than often purveyors of murderous hatred across Myanmar, Cameroon, Nigeria and Kenya.
Facebook’s untraceable “dark money” ads still inflame right-wing populism, while its Cambridge Analytica scandal distorted democracy on three continents, for which it paid $5.1bn in fines to the US Federal Trade Commission (FTC) last July. Facebook’s share price immediately spiked. Just the cost of doing business for behemoths that routinely shift vast profits offshore into lax data-regulatory, tax-havenish jurisdictions like our own.
Sadly, Ireland gets scant mention in this often jaw-dropping tome by this spiky American Financial Times business columnist. Foroohar’s last book, Makers and Takers (2016) detailed the “financialisation” of our economies. In the US, finance generates only 4 per cent of jobs but a quarter of all corporate profits; often on the back of complex, risky trading. Meanwhile, old-fashioned lending to the “real economy” has dwindled alarmingly.
Foroohar sees Big Tech as “the apex of financialisation”: its gargantuan revenues predicated on the remorseless monetisation of the data of “users”. Big Tech’s market capitalisations now dwarf the largest financial firms. Apple was the first corporation to pass the trillion-dollar mark in 2018.
Since the crash, low interest rates have seen soaring markets awash with cheap money; with big corporations borrowing to buy back their own stock; artificially inflating share prices, while enriching investors and execs at the expense of workers and taxpayers. Apple, Faroohar reports, has about $210 billion in cash, $110 billion in debt, and conducted a quarter of the $407 billion in US stock buybacks in the six months after Trump’s tax cuts in 2017.
Top firms also borrow to buy up other riskier, higher-yielding corporate debt. This unregulated corporate bond market has grown a record 70 per cent in the past decade, reaching $10.17 trillion in 2018. Big Tech also leads the dubious rise in “intangible” assets – intellectual property: brands, software, “R&D”. Foroohar sees the digital giants as “too-big-to-fail” institutions, holding assets that, if dumped or downgraded, could trigger the next global crisis.
Cheap money
Foroohar worked in tech venture capital before the dotcom bust, and sees parallels: booming markets, cheap money and top-end tax reductions feeding into speculative investments. Witness the inflated valuations of Silicon Valley “unicorns”: Uber, Airbnb, WeWork and even Netflix. Foroohar asserts we are again in the “late stages of a credit cycle, with too much money chasing too little value”.
Foroohar interviews engineers, execs, disgruntled employees, rueful lawyers and venture capitalists like one-time Facebook investor, Roger McNamee, pitching his book, Zucked. She wryly appraises Valley culture with its “core Ayn Rand libertarianism beneath its hippie patina” and contempt for government. Take Palantir’s Peter Thiel, a Trump supporter who wants California to secede from the US. He once funded a plan for an archipelago of floating islands. He and other Valley billionaires maintain survivalist hideaways in remote wildernesses.
Many seem unhinged and testosterone-troubled. Former Uber boss Travis Kalanick (who cashed in more than $2.5bn worth of stock before Christmas) was ousted in 2017 for misogyny at the company he called “Boober”. Amazon’s Jeff Bezos (Earth’s richest man) “sexted” multiple “penis selfies” to a Fox News personality. In 2018 Google paid its Android founder, Andy Rubin, a $90m departing bonus to smother another allegation. As Foroohar notes, in the previous two years, 48 “Googlers” had been “terminated” for sexual harassment, including 13 “senior managers and above”. And Elon Musk bumbles on, pumping millions into life extension research and colonising Mars, in between catastrophic rants fuelled on cannabis and whiskey.
In 2018, led by Google, Big Tech spent a record $224.6 million on federal lobbying; second only to Big Pharma
Visiting Google’s Stanford alma mater, Foroohar enters the field of “captology” with BJ Fogg and his Persuasive Technology Lab inspired by BF Skinner’s work with lab rats and “intermittent variable rewards” – precisely the mechanism behind the casino slot machine. Fogg’s lab birthed Instagram’s founders before Facebook came seeking his wisdoms on “addictive technologies”.
It’s dispiriting to read of Google’s early campaign to devalue intellectual property up to their rollback of patent protection under a starstruck Obama. In 2018, led by Google, Big Tech spent a record $224.6 million on federal lobbying; second only to Big Pharma. Google lavishly “grooms” academics and civil society groups. As a source told Foroohar: “it’s about social and intellectual capture”. Shockingly, Google paid $850,000 in research grants to the FTC’s chief technologist Lorrie Cranor, thus gagging the regulator.
Foroohar warms to thinkers like mathematician Cathy O’Neil, ballsy neuroscientist Vivienne Ming; and Shoshana Zuboff, author of The Age of Surveillance Capitalism. Personal data is the issue. Foroohar cites a paper calculating the value of US user data to internet platforms, data brokers, credit card companies and one healthcare firm at $76 billion in 2018 – double the 2016 total, and looking to double again by 2022.
Universal surveillance
Since the GDPR in Europe, this feeding frenzy has become visible. To access websites, we must allow them and third-parties track us across the net and across devices – just like Facebook, even if you never signed up. Click on “show vendors” and see these swarms of mysterious entities.
Such universal surveillance borders on the totalitarian. George Soros, who survived Nazi-occupied Hungary, has made “alliances between authoritarian states and these large, data-rich IT monopolies” a plank of Open Society’s research. When Facebook was roasted after the 2016 US Presidential election, it hired a right-wing attack-dog PR firm – Definers Public Affairs, based in Arlington, Virginia – to portray its critics as pawns of George Soros.
While Google and Facebook observe censorship requirements in China, Amazon closed shop there last April due to Alibaba’s competition. Back home, Amazon was pipped by Microsoft on the $10bn “Jedi” cloud computing contract with the Pentagon, but Foroohar notes the deal they signed with 1,500 US public agencies to provide office supplies – allowing Amazon deploy “dynamic pricing”; i.e., charge whatever they like.
A recent Channel 4 Dispatches programme found Amazon has landed a £300m public procurement deal in Yorkshire, while the UK government has paid Amazon £78m for web services to government departments such as Justice, Health and the Tax Office which, since 2017, has awarded over £26m in contracts to Luxembourg-based Amazon Web Services. It will be interesting to see who wins the Irish contract to provide online services for the NTMA’s Strategic Banking Corporation in 2020, with all those friendly data giants in town.
Faroohar devotes but a few pages to fintech; with one mention of Facebook’s Libra e-currency. But she cites a paper by Cornell professor Saule Omarova, identifying such cryptocurrencies as major potential destabilisers of financial markets.
Facebook’s faintly extraterrestrial CEO Mark Zuckerberg was again quizzed on Capitol Hill last October for five hours by Alexandria Ocasio-Cortez and other Congresswomen, but he gave nothing away. Foroohar now sits on the advisory board of the Open Markets Institute, a liberal think tank hell-bent on breaking up the online monopolies – a cause embraced by Democratic hopeful Elizabeth Warren. But Big Tech will fight like hell-cats against any threat to their bottom line.
Foroohar’s footnotes alone are a treasury of online resources. She hits some strange notes, but she’s a sharp and personable narrator, writing with opinionated, sweeping style. This an important book for anyone engaged with one of the most pressing realities of our times.
