Transcripts For CSPAN2 After Words Rana Foroohar Dont Be Evi

CSPAN2 After Words Rana Foroohar Dont Be Evil July 13, 2024

Contains on a timely subject that the height of stocks of amazon and google and others and with a broad scope why this book and why now . Thank you for having me by the way. I started this book in 2017. I had just taken a job as a columnist the mandate was to figure out the World Biggest business in opinion form which is a rather large mandate and in order to narrow the funnel, started to look through corporate numbers i saw how well they transition from the Financial Sector to the Technology Sector since a great financial crisis and one number that stuck out was looking at how 80 percent of corporate wealth was being held than 10 percent of the firms. Those were the richest in personal data and intellectual property. You are holding the majority of the worlds corporate wealth and the majority of those are that i profile in the book. Netflix and google. Host there are some overlap like facebook and google with Digital Advertising and apple has shunned advertising and technology. Huber is of the optical Optimal Company either but. That we think of them as all things tech. Its a great question and an interesting point because we are trying to separate each other as regulators look more tightly in the space. So what they do in the calm one in common is the Network Effect with the idea as you get big, you get bigger. The Business Model of these companies and many firms to bring as much territory as possible as quickly as possible. Everybody wants them out. You get in and to sacrifice so a company like amazon but also like bluebird to undercut the worlds Taxi Services and worry about profits later. This is something businesses havent been able to do at scale until now. So that in itself has a lot of ramification and it cuts competitors out and with that monopoly power. So a reasonable and optimistic and simplistic statement of what it would adhere to but that implication is you got bad. So to be powerful and successful . Where to start. I 350 pages on it. [laughter] it was the mantra the evil one the google guys came up with in the nineties when the internet was a garage industry it was just born with a small time entrepreneurs coming up with these companies and the reason i decided to focus on google and the idea of not being able is that it was a bear in the beginning. If you write a complicated book with social and political and Economic Issues you want a narrative arc. Buildingl voodoo doll of you and of ensuring data to advertisers. The Business Model would eventually bring the users of search. And the state entities like russia, iran or the rightwing nationalists. We are so sorry we could never have imagined all of these terrible things. Go back to the paper it was kind of all there in small print. Host in the statement at the time in the 90s they were seen as this evil empire with windows, 3. 1 storming into everything and its odd now bill gates is this figure in Technology Getting all this money away and why doesnt every billionaire do what he does and the ceo of microsoft is seen as a kindly, you know, gentler effective ceo. They dont come under too much fire or scrutiny like the rest of us who do that. I didnt really focus on microsoft, and i think that if they had their way, im sure they would be happy to have a successful Search Engine. But that actually goes to the point, and everything you are saying phones in on what constitutes monopoly power and what constitutes anticompetitive behavior. The microsoft antitrust case, which actually sort of allowed people with this space for google to be born and grow, that happened over 20 years ago at this point. That was the last time regulators and the public really looked at Silicon Valley and took a hard look at the sector and said okay we have competition problems here. That is a whole new world and if you go to some of the books that were written about the data economics. They talk a lot about the power of networks and how in this new world the Network Effect of the surveillance capitalism these companies would become natural monopolies. Thats the whole thing they didnt want to get into the business unless they thought they could create monopolies of thatothat in a way sort of comeo conflict with the dont be evil slogan pretty early on. Host while we talk about them as being monopolies and having monopoly power come at the same time they are all competing with each other is what they would argue. They say look, amazon is in the lead, and microsoft is the challenger and then in the operating systems into smart phones. We had a competition issue and she looked surprised and said we feel like we are competing against the big guys all the time but that is the issue, it is goliath at this point. You have a handful of players basically three or four companies that have taken over everything and are actually moving into an entirely new fields to. Those Like Health Care in areas like finance. We have seen amazon go overnight into the grocery business. I havent seen you see another industry is saying we need a monopoly case or bring suit into the bargain because they benefit. Every company in the world benefits from the power of the targeted advertising. The model that has been hiding here in the personal data imagine if they got all of their steel for free they would have doubledigit Profit Margins. Selling it across the devices and industries. You look at some of the privacy, Security Issues like facebook, then think about leaving your Checking Account onto that and healthcare data onto that and the world of smart speakers and how the surveillance is all around us now. Its the idea and filling in the detail here, the idea that by watching people and collecting data on what people are doing, you can build a whole Economic System that doesnt necessarily benefit them. They are not necessarily the consumer, but they are the good. Guest its funny, just the word consumer. Shoshana goes back i read it as i was doing my research she looked in an academic way almost through a marxist lens at the history of capitalism and how this new kind of surveillance capitalism is in some ways the ultimate fruition of corrupting society for the citizen into a consumer and now turning a consumer into a raw material. These digital patterns are developed. We get none of that resource. The fact i have an issue with buying shoes and the same kind of dresses over and over again, that is my desire, my habit, my personal information. That is my behavior. It is no longer mine. It is being harvested by google and beit amazon and it is used to sell me more thing. Now we havent even gotten, theres plenty of time to go into the political but take what we have been talking about in terms of purchasing the corporate monopoly power in the store to put them in the political arena. Lets say you are on youtube and like my son you are clicking on lebron james videos come he can give you any stats about the nba, but if you are clicking on rightwing hate speech, you are getting more of that. That is called a filter bubble and that the benefits these companies because they monetize us by keeping us online longer. This polarizes us politically if you think about the power of these titans, Corporate Giants have always had political power. Its not just from top down and we can get into it how it is by dollar to the lobbying group in washington that it comes from the bottom up because our behavior can be manipulated to. A couple of years ago they talk about do we even have free well in this world area are we in danger of losing john stuart mills, the ability to be free citizens in an open society in the world in which we can be controlled at this level by algorithms. Host it sounds like from the questions of advertising addiction to television. Guest the antitrust scholar at columbia looking at some of the similarities, i do think that this world of digital surveillance capitalism is fundamentally different. It is everywhere all the time. The services are like utilities. Can you imagine having search for ecommerce or your asp pulled. We only have the beginning of it really because we talked a little bit about smart speakers for example there is more of a cognitive power and you hear a suggestion given to you by voice is even more powerful in terms of influencing your behavior. The power of these companies, they can either race you as a product, as a person if they want to. Its too much power. Host the apple ceo would probably say we are not the problem, we are part of the solution. We have this idea come of this concept, differential privacy that we are building into our products and we are not taking peoples actual identifying data out of their devices and using that to inform our ai. We are shielding that and taking general insight into keeping ourselves clean from personal data so that we are not trafficking in it. Is that true or is there a hole in the argument . Guest i think it is largely true but there are several holes in the argument. Apple certainly has had more of a commitment to privacy to be fair for its own competitive advantage than google or facebook. It isnt a data harvester in the same way google or facebook is. They make their revenue on Digital Advertising and selling hardware devices. Now it wants to create the network and ecosystem and loop you into buying as many products and services as possible, so ino enough he uses a Network Effect by what they got a couple of things. Things. For starters, the commitment to privacy has very much depending on which country you are talking about so apple will capitulate on privacy in china in ways that it wouldnt dream of doing in the u. S. So its certainly subject to the political pressures, differences in the way of. I would say theres a couple of other problems with apple that overlap some of the problems i see with google and facebook. One is who gets what part of the innovation and high so one of the big arguments right now when the regulators and the public see these companies are too big a to make them smaller and to bring them up they say this is the battle between regulation and innovation. We have to stay big to innovate. I would argue these companies, and apple is foremost among those over implementors, not innovators. They are implementing pretty much other peoples technologi technologies. And you can see this playing out. There is a great story right now in the headline of the google battle. They also have a beef to pick. They are the maker of a small innovator, he came up with a way to make smart speakers, very innovative company, came up with a lot of technologies that were adapted by both google and apple and as the companies started getting bigger and more powerful, they started infringing on those patents. Theyve now taken them to court over the infringements. They couldnt afford to take on both google and apple over the infringements. Apple has had major fights with other Big Companies. Apple actually in some ways is responsible much more so than a huawei. Infringing and at some point it got bigger and decide we dont want to pay what youre asking. So, they are implementing thousands of technologies. They wan wanted to be an expense and they are taking opensource and implications. Sometimes they buy out a Small Company to get rid of competition. So again it is getting bigger and using the system i think to raise the innovation environment in ways that are actually a zerosum game. To make one point, you cannot have an economy in which the four companies are taking all the wealth. Youve got to have a bigger innovation ecosystem. Host so, sonos is suing google and would have sued amazon but they couldnt afford to take them both on at the same time. Guest im sorry, amazon, not apple. Apple has beeapple has been taky spot if spotify. Host even at the beginning of apple, xerox parc had graphical userinterface and steve jobs how could you have this just sitting here somebody ought to bring this to the world and put out his version. That is one thing and that is the allegation in the case but one could argue that part of what the companies and maybe even Big Companies become good at is actually bringing that innovation into life come into the economy and giving it to people. Guest a lot of people would argue that. I guess i would say i do not see the consumer electronic product that lets face it hasnt had a Game Changing innovation since the smartphone which was in 2007. Everything else has been more or less iterative and its been about apple being extremely clever as a marketer and is a brand creator. Value at this point was in three places, globally it lives in the ip and data and big brands that are able to create the kind of near and desirability and in real estate that is kind of where the value lives. I think in the new world that we are moving into there is going to be an environment of deflation and commoditization. You can see apple fighting hard to keep the market share. Look at apple losing the battle to save a smart phone game maker in a number of emerging markets. Apples success in being able to continue packaging expensive products and selling them in giant glass boxes is actually not helping to put more americans to work. It isnt helping to create the next big productive bubble. Things that would bring along a Critical Mass of workers to the next that place is just about selling more expensive stuff. I would argue that a company like qualcomm is the company that came up and that makes the smartphone smart. In three continental legal battles with other American Companies at the same time that china for example rolling out bundles, one road, working seamlessly to the institute huawei chips and technology into the entirely new ecosystem. I think that that is a model they should bweshould be lookine carefully at dan the sort of blase fair keep margins as tight as you can. We see in the last few weeks and months the number of corporate scandals that kind of zerosum financial is thinking has led to. For the challenges of the companies the legacy in the u. S. Is very different from europe. In europe it is more about protecting competition. In the u. S. Its been more about protecting the consumer. It seems like in the digital era that kind of distinction doesnt work the same way it used to because when we talk about facebook or we talk about google, very often the Companies Want to say look at the consumer. They are paying nothing. So, this is good for the consumer. Other people say thats not the consumer. The customer for them if the advertiser and they are paying a lot more. Theres the old model for antitrust and dealing with the companies and competition. Guest two or three points that i would make, one of the things they like to see his competition is just a click away. They say this whole time. Lets be serious. To go back to the question about microsoft. If you are doing a Google Search and or computer stopped working for a minute, would you go to bing or get up and have a cup of coffee and come back in five minutes. Im guessing the latter. Host i do use bing, sometimes. I use google sometimes, do some shopping on walmart as well as amazon. Guest mix it up. Host its all over the place. Guest equal opportunity surveillance. So, the Network Effect actually creates that mode you are talking about. But the deeper point is i think that the rules of the freemarket capitalism actually do stop working. Its like the law of gravity as long as both sides know what the transaction is. Neither of these things hold so you do not know what you are giving up on what you are getting. You know that you are getting a search but you dont know how much the data is worth you gave for the search so it is a very asymmetric transaction and that is the problem right away. Also when you are not paying in dollars, that isnt a free market. That is in the way adam smith would have envisioned. You need equal access to data, transparency and the moral framework to function properly. You do not have that in any of these things and you are dealing with the digital giants. It also calls in a very technical waiting to question this 19 80s school of thought that its just Consumer Prices that matter. But the school of thought that allowed walmart to get this big and destroy the town square. Okay. Fair enough. Thats good enough for us i guess. There are a lot of negative externalities. You get with choice. But in this world of free come and i put quotation marks around it because when you download these and do these searches, you think that its free but you just dont know how much. That model really doesnt work anymore. You can look at the innovation ecosystem, which is the way the europeans do it. They look at almost the markets like biological systems like a petri dish and theres all these different things. The plans and the frogs and fishermen. How do we make sure that its working for everyone that is the way of doing things. Its complicated and timeconsuming. Thats why they take years and decades. Interestingly, there is an academic who had a wonderful book looking at how by many measures european markets work better and are free in terms of the diversity of players because theyve been more sensitive to our Small Businesses doing well or consumers doing well to the Big Companies, the ones that depend on patterns versus open markets and everybody getting a fair shot. Putting that aside for a moment, i think you have to start thinking about political power and the political economy in a way we havent thought about in this country for 40 or 50 years. And so one of the things in my book i spent a lot of time thinking about and reading about was the 19th Century Railroad paradigm. So, you go back to the rockefellers and vanderbilt and you have these networks being built by the Railroad Companies and at one point they owned not just the railroad the cars that sat on th

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