NEW YORK (Reuters Breakingviews) - Apple is now the de facto watchdog of Silicon Valley. That’s the conclusion from its decision this week to shut down the apps on its platform that Facebook uses for internal development. The iPhone maker discovered the social-media firm was actually employing them to collect data from the public, breaching rules about enterprise-only usage. Companies have a big role to play in ensuring personal data is protected. But it’s an absurd state of affairs that regulators are not at the forefront, especially after several years of similar stories.
Roger McNamee offers some solutions in his excellent new book, “Zucked: Waking Up to the Facebook Catastrophe.” On the face of it, he is an unlikely agitator. He is, after all, a creature of Silicon Valley. He landed at T. Rowe Price at the beginning of a bull market in 1982 tasked with covering the tech sector. He helped start private-equity firm Silver Lake Partners and later teamed up with U2 front man Bono and others to form Elevation Partners.
He also saw the promise in Mark Zuckerberg’s Harvard dorm-room creation, becoming an early investor as well as an adviser. McNamee provided its young founder with two pieces of extremely valuable advice. In 2006, he counseled Zuckerberg not to sell to Yahoo. Soon after, he suggested Zuckerberg hire Google executive and advertising maven Sheryl Sandberg. His stint as mentor helped Facebook flourish into the $480 billion machine that it is today.
Now he is one of the social network’s biggest critics. He’s a canny and persuasive one too. In “Zucked,” McNamee lays out an argument why it and other tech giants have grown into a monstrous threat to democracy. Better still he offers tangible solutions. Regulators are the only ones to cage them – and the sooner, the better.
But he was also one of the first to spot growing problems. McNamee wrote to both Zuckerberg and Sandberg 10 days before the U.S. elections in November 2016 to voice his fears that Russia was using Facebook to interfere in the democratic process. This time his guidance was politely ignored. So he took his concerns outside Silicon Valley’s filter bubble.
A friend connected McNamee to Senator Mark Warner just as the Senate Intelligence Committee he co-chaired was preparing to dive into the role social media played in the elections. McNamee proved to be an agile Sherpa for lawmakers and their staff eager to understand how Big Tech operated. McNamee helpfully told politicos to seek an ally in Apple. He also served as a line editor on George Soros’s speech in Davos last year about the dangers of internet platform monopolies.
What makes McNamee so credible is his status as a Silicon Valley insider. He also has a knack for distilling often complex or meandering TED Talks and Medium posts about the ills of social media into something comprehensible, not least for those inside the D.C. Beltway.
He maps out a thesis as to why people should be, frankly, outraged. For instance, Facebook’s overreach on privacy is a feature, not a bug. Alphabet’s Google and Facebook are scooping up people’s data in a way that is harmful to society. “Technology companies had devoted some of their best minds to exploiting weaknesses in human psychology,” he writes. “They did so on purpose. To make money. And when they had made themselves ridiculously wealthy, they kept doing it because it never occurred to them to do anything else.”
McNamee doesn’t just scream fire, though. He also provides a reasonable framework for solving some of the issues. He asks, for example: If health care and financial institutions can be regulated, why not tech giants? And why not expand the fiduciary rule – which prioritizes data privacy and security and allows customers to seek legal redress if the terms are violated – to companies that hold people’s information? Other suggestions include third-party audits of social-media algorithms that already exists for financial statements. For anyone looking for a primer on what’s wrong with social media and what to do about it, the book is well worth the read.
Because what’s clear is that self-regulation – Apple’s foray aside - won’t work. Some progress has been made: Few things have brought the divided chambers closer together than the need to address the looming issue of tech firms and their use of personal data. California lawmakers voted on a data privacy bill last year that will probably force the issue nationally. U.S. Attorney General nominee William Barr said he will take a harder look at the power of the technology “behemoths.”
If big tech continues unchecked, just wait, McNamee warns. Artificial intelligence is poised to worm its way in the social fabric with profound implications. He argues there is no reason to believe the impending Next Big Thing will be benign unless users and policy makers demand it. If that doesn’t happen, we’re really zucked.