5 minute read 29 Mar 2018

Why trust in tech giants is eroding, and how it can be rebuilt

By

Alison Kay

EY Global Accounts Committee Chair

Working across EY's largest accounts. Advocate for a diverse workforce. Accomplished pianist. Loves to sail.

5 minute read 29 Mar 2018
Related topics Digital Trust

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How important is it that we trust the companies pulling the strings behind the platforms we use?

Big tech companies faced a barrage of questions at Davos this year, shifting the tone from a celebration of all things tech to concerns over minimal regulation, political polarization and the impact of social media on mental health. One attendee even compared the addictive properties of social media to the cigarette industry and said that the government needed to step in. 

Confidence and trust in the tech sector has certainly been falling. Last year there were billion-dollar fines over antitrust, data privacy and taxes; research highlighting the dangers of social media addiction; evidence of fake news; accusations of election meddling; and extremist content on the internet.

But is all the negative sentiment surrounding the tech industry warranted? And are people right to feel diminishing confidence in tech giants, at a time when their role in our lives seems to be ever-expanding?

The tech sector has given us so much

It's important to take a step back and remember all the good things tech has given us. We now have robots that take on risky jobs like detecting IEDs and cleaning up hazardous chemicals. Think of medical technology and minimally invasive surgeries. Traffic apps that save us time and being able to stream entertainment wherever we are.

Then there's artificial intelligence and automation, taking away the repetitive parts of our jobs and freeing people for more creative, strategic roles.

Tech companies add trillions to the economy, populate the Global Fortune 500 and invest heavily in R&D. Data scientists, developers and data analysts are some of the most desired, high-paying jobs. And employment in the IT sector generally outpaces overall job growth.

Tech advances have already changed the way we work, live and play. More change is on the way and I, for one, welcome it.

Is it time to tackle the tech giants’ unprecedented power?

As we move toward this Transformative Age, however, we face some stark realities.

There is a serious concentration of power, unlike anything we've seen since the Industrial Age. Market capitalization of the tech titans surpassed US$3t in 2017.

With their enormous cash reserves, they snap up new entrants, raising accusations of stifling innovation by eliminating potential competitors.

So, given how much we all depend on tech and tech platforms, are the tech giants now too big to fail?

Two historical parallels come to mind: the US railroad barons of the nineteenth century and Standard Oil, which, in the early years of the twentieth century, controlled more than 90% of US oil. Both enjoyed monopolistic power until regulation curbed their excesses.

So is it time to do the same to the tech giants?

Redrafting society’s contract with big tech

The truth is that tech giants are neither good nor bad — it's more nuanced than that. What we need to focus on is how to benefit from technology platforms while balancing their social, economic and political power.

It's tempting to think “Well if it's a monopoly let's break it up.” But it's not that simple. Tech platforms are different from monopolies of old — they are constantly growing, shifting and evolving. Regulation hasn't kept up.

A new approach is needed. Some of the ideas touted so far — and questions that still need answering — include:

  • Redefining what constitutes anticompetitive behavior:
    In the US, abuse of market power is determined by harm to consumers (which can be loosely translated as “higher prices”). But the price of most internet platforms is zero. In Europe, anticompetitive behavior focuses on harm to companies and to consumers — which has led the EU to impose billion-dollar fines on web titans to restrict their dominance. How are tech platforms best regulated, and how can regulators bring in knowledgeable insiders, given the war for tech talent?
  • Reconsidering data ownership and privacy:
    Terms and conditions presented by popular apps demand instant compliance. Consumers have a right to be told in plain English what they are surrendering, as well as what they are due from the recipients of their data. Ultimately, consumers, not the platforms, should own their own data, but we are some way from this. In May 2018, when Europe’s data protection rules take effect, violations of national privacy laws will incur fines of €20m or up to 4% of global revenue, whichever is higher. It may take tough penalties such as these to have any real effect. If ownership of data by monopoly platforms constitutes an unfair advantage, which data should be shared and how?
  • Increasing transparency:
    Digital advertising is the business model of most social media platforms. There are calls for them to explicitly label political ads online (as in traditional media), and for users to be able to probe how the contents of their news feeds and search results are determined. Yet tech companies resist sharing algorithms on competitive grounds.
    Which is more valuable to tech giants: consumer data in the short run, or public trust and engagement in the long run?

A more trusted tech sector would benefit us all

To create an inclusive future, we all have a responsibility to engage in the debate over technology and the influence that tech platforms wield over our lives, economies and societies.

I remain optimistic about the role technology will play in our future. Yes there are valid concerns which need to be addressed by the technology companies and regulators.

But I'm confident that with enough political and social will, a new way forward can be charted. The time is now to balance the positive, explosive growth of the technology sector with its obligations to the public, and to establish a global market that thrives well into the 22nd century.

This blog was originally published on LinkedIn.

Summary

To create an inclusive future, we all have a responsibility to engage in the debate over technology and the influence that tech platforms wield over our lives, economies and societies.

About this article

By

Alison Kay

EY Global Accounts Committee Chair

Working across EY's largest accounts. Advocate for a diverse workforce. Accomplished pianist. Loves to sail.

Related topics Digital Trust