Less attainabletoday the later , Pulitzer Prize winning journalist Nicholas Kristof and sheryl wu dont report on the issues facing the working class in rural america. An enjoyable tv now and over the weekend on cspan2. Great to sit down with you and your book, dont be evil is contained plenty on a timely subject given the political times we are in , given the heights that the stocks of apple, amazon, google and facebook and others have reached but you normally have a pretty broad scope to your coverage. Why is this book, why now mark. At you for having me by the way. I started this book i guess it was in 2017. And i had just taken a job as a columnist for the Financial Times and my mandate was to figure out are the worlds biggest business and economic stories and cover them in opinion form is a rather large mandate and in order for the to narrow the funnel i started looking through wealth figures and i thought i saw an amazing numbers in terms of how well to transition to the technology sector. Since the great financial crisis and one of the numbers that really stuck out was the Mckinsey Global institute figure looking at how 80 percent of corporate wealth was being held in just 10 percent of firms and those were the firms that were richest in personal data, intellectual property so basically if you were trafficking in these things , you were holding the majority of the world corporate wealth and the biggest of those firms were the ones that i profiled in the book, facebook, apple, amazon, netflix a little bit and google most of all. They make money all of them pretty differently theres some overlap facebook and google , they dig into Digital Advertising but look at apple. Theyve mostly shunned advertising unless they sell their devices, their technology. Uber isnt an ad driven company, not a profitable Country Company either but making money on a whole differentbasis. Besides the fact that we think of them as all being tech , they all have one thing in common. Its a great question and its an interesting point you make because right now theyre all trying to separate each other as regulators to look more tightly at the space. I think the thing they do all have in common is the Network Effect and the Network Effect is something i talk about in my book, its the idea that as you get big you get bigger. The Business Model of these companies and of many unicorns in Silicon Valley, those giant private billiondollar firms is to reign in as much territory as possible as quickly as possible. Everybody wants a moat, move fast and break things you get in and you do this in many cases by sacrificing margins so Companies Like amazon also like uber. You go and you undercut the world taxi services. You take over the entire industry and worry about profits later area this is something that businesses simply havent been able to do at scale in this way until now. That in and of itself has a lot of ramifications. It cuts competitors in ways that may in fact the anticompetitive and point to monopoly power. The book is called dont be evil which harks back to googles now i guess inappropriate motto. But original very optimistic and yet complex simplistic statement about itself. What was going to adhere to. The implication is that its not evil, they certainly gotten kindof bad. So whats bad about being big and powerful and successful. Where to start. I wrote 350 pages on. Dont be evil was the mantra of course that the google guys came up with in the mid1990s which is when the internet really was a garage industry. The Consumer Internet was just being born and you had all these individual fulltime entrepreneurs coming up with these monies and the reason i decided to focus on google and on this idea of not being evil is that google was there really in the beginning so when you write a book , particularly a complicated book looks at economic and political and social issues you want to find a continuous narrative arc and at the time that i started looking at this facebook was really the company was in the news for elections manipulation, although theres been plenty of that on google but election manipulation, monopoly power grid of bad behavior in general but if you go back and you look at google and its surroundings, i read a paper that larry page and survey brain, the founders of google wrote in 1998 and combined this paper on the internet, it looks at what are the Search Engines, how would you run a Search Engine , how would you pay for the Search Engine and they at the end in an appendix section have a paragraph on advertising and they talk about how targeted advertising, which is the Business Model of essentially watching what you are doing online, seeing what youre clicking on, what are you searching, building a kind of a digital voodoo doll of you showing that advertisers and auctioning your eyeballs off to the highest bidder. That Business Model would eventually bring users of search and advertisers into conflict read their interest would not be the same bday companies or large state entities like russia or iran or rightwing nationalists or whoever might want to reach you and try to influence you so this was amazing to me. Its like a grim prophecy. This is one of the things that bugs me when i see tech ceos get up on the hill and say were so sorry, we could never have imagined all these terrible things. Go back to that paper in 1998, it was kind of air in the small print. The unspoken foil inthe statement dont be evil was microsoft. So at the time in the 90s, especially the mid to late 90s they were seen as this ascendant evil empire that had stepped on apple with windows 3. 1 and formed into the internet and trying to own everything. Its odd now that bill gates is now this sainted figure in technology, getting all this money away and why does every billionaire do what he does and the current ceo of microsoft is seen as this kindly exemplar and yet effective ceo. They owned, under two much fire or scrutiny with the rest of the groups. Its true, i didnt focus on microsoft and you know, i think if microsoft had their way im sure that they be happy to have a very successful Search Engine , bing is not that Search Engine but that actually goes to the point. Everything youre saying kind of cones in on what constitutes monopoly power, what constitutes anticompetitive behavior. The microsoft antitrust case which actually sort of allow a lot of people would say the space for google to be born and to grow. That happened over 20 years ago at this point. That was the last time that regulators and the public really look at a con valley, took a hard look at the tech sector and said we have to competition problems here. Microsoft spent so much time grappling with those issues. Being drawn into legal battles google was able to get this leg up. Google was tracking not in software but in the data. And surveillance capitalism as shoshana wrote a wonderful book on that topic and dumped it really hold the world. And if you go to some of the books that were written about data economics by people like house. Who is the economist at google, they talk a lot about the power of network, how in this new world the Network Effect of surveillance capitalism, that the company would become natural anomalies read the whole thing, these guys didnt want to get into the business unless they thought they could create monopolies so it away sort of comes into conflict with the dont be evil slogan pretty early on. Its complicated to because while we talk about them as being monopolies and having monopoly power in a lot of cases at the same time theyre all competing with each other is what they would argue. They say the cloud, amazon, microsoft is the challenger and in operating systems microsoft, and smart phones apple is in the lead. If youre counting devices google is in the lead if youre counting operating systems, they would argue look how much competition there is but were looking at the wrong numbers. Theres so much wrong with that argument and in fact youre amending me an early conversation i had with google when i started thinking about this book, and with one of their strategy falls and put forward my idea you guys are natural monopolists. We have a Companies Competition issue here and she looked surprised and said we feel like were competing against the big guys all the time but thats the issue. Its the lot of the goliath at this point. You have a handful of players really basically three or four companies. The have taken over everything and are actually moving into an entirely new heels so look in the last few months the landgrab thats happening on the part of apple, amazon, google and areas like healthcare, in areas like finance. Weve seenamazon overnight into the grocery business. Theres, its hard to think of a business that could be disrupted by these giant firms. That might beg the question of why havent you seen other Major Industries saying hey, we need a monopoly. A very Faustian Bargain because they benefit. Every company in the world that fits on the power of targeted advertising. Theyre all using it and increasingly, the model has been pioneered by these businesses , harvesting our personal data for free, imagine if gm got out of steel for free, that they would have doubledigit Profit Margins to read harvesting our data for free red telling it, collating it across devices, across industries. Look at some of the privacy and security monopoly issues with a company like facebook. Then think about laying a Checking Account on on that and your healthcare data onto that and think about the world of smart speakers. And how the surveillance thats all around us now, its not just online. Itsin our smart home. You know what, my husband loves an and hes in his office. I insist he turns the darn thing off every time i go in there. I cannot imagine. Particularly at the political moments we live in i do not want a surveillance device in my home. You mentionedshoshanas surveillance capitalism, lets talk about what that is. The idea and then fill in the details. The idea that by watching people, by collecting data on what people are doing, you can build all Economic System that doesnt necessarily benefit them. Theyre not necessarily the consumer but they are the good. Its funny, just the word consumer. Shoshana goes back and its a wonderful book and i read it as i was doing my research. She looked in a very academic way almost through a marxist lens at the history of capitalism and how this new kind of surveillance capitalism is in some ways ultimate fruition of corrupting society or the citizen, turning a citizen into a consumer and now turning a consumer, a person into a rawmaterial. So as we are followed around online, these digital patterns are developed. We get none of that resource. So my shopping patterns, the fact i have an issue with buying shoes and the same kind of dresses over and over again. Thats my desire, thats my habit, my personal information. Thats my behavior. It is no longer mine. It is being harvested by google and by amazon and used to sell me more things. Now we havent even gotten into, we have plenty of time to go into the political but take what weve been talking about in terms of purchasing and or print monopoly power and start to put that in the political arena. One of the things that happens online is you get more of what you click on so if youre clicking on, lets say youre on youtube and youre clicking on lebron james videos all the time, youre getting a lot of those area it can give you any stat about the nba if youre clicking on rightwing speech are also getting more of that red called a filter bubble. And that benefits these companies because they monetize us by keeping us online longer. This though polarizes us politically and if you think about the power of these tech buttons. Corporate giants have always had political power. The robber barons, the railroad tightens. Every ceo, every counter, every billionaire when they get to be a certain size in half, by politicians, by lobbying power but we have a new system in this world of surveillance where that power comes not just topdown and we can get into how big tech is by dollar the largest lobbying group in washington comes from thebottom of. Because our behavior can be manipulated area these are the rhythms in some ways better than we know ourselves so george arose, the financier and political activist gave a speech couple of years ago at novels which you may have heard talking about do we even have free will in this world anymore . Are we really in danger of losing john stuart mill, the kind of ability to be free citizens in an open society in a world in which we can be controlled at this level by algorithms. It sounds like some of the original questions about advertising in the nation of it. And you probably read the attention merchant from another great book area im giving all this great promo for other peoples books but were all in the same game. Tim wu at columbia, and antitrust scholar get a book looking at the similarities but i think that this world of digital surveillance capitalism isfundamentally different. Itis everywhere all the time, these services are like utilities. And imagine having searched for ecommerce or your uber apps cold . Its a whole new world and where only at the beginning because we talk about smart speakers for example. Those sales are going up exponentially three digits per year. That has more of a cognitive power. When you hear a suggestion given to you by voice, its even more powerful in terms of influencing your behavior and if you type in a search and you go where google tells you to do and weve already seen and we are seeing as more antitrust actions rollout the power of these companies. They can erase you as a product, as a person. If they want to, its too much power. Tim cook, apple ceo would probably say we are not a problem, were part of the solution. We have this idea, this concept. Differential privacy that we are building into our products where we are not sucking peoples actual identifying data out of their devices and using that to inform our ai. Were shielding that and taking general insight and keeping ourselves, our own hands clean from personal data that we are not traffickingin it. Is that true . Is that right or is there a hole in thatargument . I think its largely true but there are several holes in the argument for starters apple certainly has had more of a commitment to privacy to be fair for its own competitive advantage and an google or a facebook is not a data harvester in the same way that a google or facebook is. Those companiesmake 85, 89 percent of the revenue Digital Advertising, apple makes the majority telling devices. It wantsto create that network. Once to create that ecosystem and move you into buying as many apple products and services as possible so in that way uses the Network Effect that i would point out a couple of things. For starters apples commitment to privacy has very very much depending on what country youre talking about so apple will capitulate on privacy in china in ways that it would not dream of doing in the us. So its certainly subject to political pressure, differences in the way Different Countries regulate data and is not going to stand up and fight beijing on these things really. I would also say that a couple of other problems with apple that overlap with some of the problems i see with google and facebook. One is in terms of who gets what part of the innovation by. So one of the big arguments right now when regulators in the public say these companies are too big, we need to make them, bring them to heal and make them smaller, maybe break them up they will say this is a battle between regulation and innovation. We have to stay big to innovate. I would argue these companies and apple foremost among this are implementers. Not innovators. Implement, they are implementers of pretty much other peoples technology. And you can see this playing out. Theres a great story and headlines read the sonos google battle. And sonos also has a beef with apple. Sonos is a major with a small innovator, a guy came up with this way smart speakers very innovative company. It came up with a lot of technologies that were adapted by both google and apple as those companies started getting bigger and more powerful started infringing on those patents area sonos has taken apple to court over patentinfringement. It couldnt afford to take on both google and apple over Patent Infringement but apple has had major fights with other big Companies Like qualcomm for example red apple actually in some ways is responsible much more so than huawei which the chinese chipmaker a lot of flak for okay, theyre becoming the new go to chip company. There infringing on qualcomm but apple was on a three continent qualcomm , the biggest 5g innovator in the world infringing on at some point it got so big they said they dont want to pay what youre asking so these companies are implementing thousands of technologies written they want them to be inexpensive. They are in some cases legally taking opensource information. In other cases they are infringing onpatents. Sometimes they simply buy up small companies. In order to get rid of competition again, its getting bigger and using the system i think you read the innovation environment in ways that are a zerosum game so to make one more point you can have an economy in which four companies are taking all the area you have a bigger Innovation Ecosystem. So sonos is suing google, said they would have sued amazon to a couldnt afford to take both of them on at the same time. Although apples been taken on bikes modified. Throw all the names in. Its the same story. Couldnt you argue that implementation is innovation . In a lot of cases, even at the beginnings of apple, xerox park had a graphical user interface. How could you have this just sitting here, somebody ought to bring this to the world and put out this version. Theft is one thing and thats the allegation in sonoss case but couldnt one argue that no m