TECHNOLOGY

Google, Facebook, and Tech Race Toward a Collision with Government

Industries can get away with less government oversight so long as they don’t suggest it’s needed.

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BY Erik Sherman - 26 Mar 2019

google facebook government collision

PHOTO CREDIT: Getty Images

It's been clear for years now that major tech companies like Google and Facebook have been facing the possibilities of more government regulation. Between "Russia," privacy issues, data security snafus, and antitrust, companies have found that they can never have enough lawyers.

And the pressure is only increasing. Right now there are reports that federal prosecutors are investigating Facebook's data deals. The likes of Amazon, Apple, Microsoft and Sony cut deals to share user data, at times without consent.

And then there's the report that Joint Chiefs of Staff Chairman Gen. Joseph Dunford would likely meet with Google executives. The topic? Whether the work the tech firm is doing with China on artificial intelligence might undermine the U.S. military. Let that sink in for a moment.

We all talk about tech as though it's a monolith when it isn't. A Microsoft or IBM knows from long experience what can happen if it decides to brush regulations aside for long enough. Given people and officials enough time to get angry and something will come down hard eventually.

For a long time, the latest incarnation of the tech industry--Facebook, Google, Amazon, Uber, and the like--have wanted to push past regulations and, as the saying goes, ask for forgiveness instead of permission. They should have looked at history instead.

Government can be incredibly slow to react and, yes, regulatory schemes created in the past may not keep up with the pace of change in the world. However, that isn't something to dismiss as foolish or stupid. One point of laws and regulations is to provide certainty to companies. It means that innovations may not readily be covered.

It can seem like a green light for whatever you'd want to do. "Hey, no rule, I am so there." But it shouldn't. Looking at existing regulations gives an innovative company an opportunity to understand what they're trying to accomplish. It might be to protect consumers, support some industry or union that provided extensive support to a group of politicians, or something else.

To ignore the intent is to intentionally close your eyes and pretend all is well. It might be. It might not. But studiously avoiding the implication of your actions to better have your own way every time isn't healthy, or ultimately good for business.

It can take years for the regulatory world to catch up. When it finally does, however, it can be vengeful. The EU has slapped Google with billions of dollars in fines. The company can pay it out of profits, of course, but what an unholy level of waste that is.

Or with Facebook, where the issue is reportedly a criminal investigation and the resulting almost 8 percent in share price drop within four days. It's recovered somewhat--so far. But the pressure from the government, from investors, from business partners, and from employees will keep going. (Plus, how do you look your kid in the eye when he or she asks whether you're a crook?)

Recently I said that the tech industry had to end its bro culture. Apparently it needs to do something far deeper.

It's been clear for years now that major tech companies like Google and Facebook have been facing the possibilities of more government regulation. Between "Russia," privacy issues, data security snafus, and antitrust, companies have found that they can never have enough lawyers.

And the pressure is only increasing. Right now there are reports that federal prosecutors are investigating Facebook's data deals. The likes of Amazon, Apple, Microsoft and Sony cut deals to share user data, at times without consent.

And then there's the report that Joint Chiefs of Staff Chairman Gen. Joseph Dunford would likely meet with Google executives. The topic? Whether the work the tech firm is doing with China on artificial intelligence might undermine the U.S. military. Let that sink in for a moment.

We all talk about tech as though it's a monolith when it isn't. A Microsoft or IBM knows from long experience what can happen if it decides to brush regulations aside for long enough. Given people and officials enough time to get angry and something will come down hard eventually.

For a long time, the latest incarnation of the tech industry--Facebook, Google, Amazon, Uber, and the like--have wanted to push past regulations and, as the saying goes, ask for forgiveness instead of permission. They should have looked at history instead.

Government can be incredibly slow to react and, yes, regulatory schemes created in the past may not keep up with the pace of change in the world. However, that isn't something to dismiss as foolish or stupid. One point of laws and regulations is to provide certainty to companies. It means that innovations may not readily be covered.

It can seem like a green light for whatever you'd want to do. "Hey, no rule, I am so there." But it shouldn't. Looking at existing regulations gives an innovative company an opportunity to understand what they're trying to accomplish. It might be to protect consumers, support some industry or union that provided extensive support to a group of politicians, or something else.

To ignore the intent is to intentionally close your eyes and pretend all is well. It might be. It might not. But studiously avoiding the implication of your actions to better have your own way every time isn't healthy, or ultimately good for business.

It can take years for the regulatory world to catch up. When it finally does, however, it can be vengeful. The EU has slapped Google with billions of dollars in fines. The company can pay it out of profits, of course, but what an unholy level of waste that is.

Or with Facebook, where the issue is reportedly a criminal investigation and the resulting almost 8 percent in share price drop within four days. It's recovered somewhat--so far. But the pressure from the government, from investors, from business partners, and from employees will keep going. (Plus, how do you look your kid in the eye when he or she asks whether you're a crook?)

Recently I said that the tech industry had to end its bro culture. Apparently it needs to do something far deeper.

 

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