So apple will capitulate on privacy in china. In ways that it would not dream of doing in the us. It is certainly subject to political pressure, differences in ways Different Companies regulated and will not fight beijing on these things. There are a couple other problems with apple that overlap problems with google and facebook. One is in terms of who gets what part of the innovation pie. One of the arguments when regulators say these companies are too big, we need to bring them to heal, make him smaller, break them up, they say this is a battle between regulation and innovation. I would argue these companies, apple is foremost among them, are implementers, not innovators. They are implementers of pretty much other peoples technology. You can see this playing out, there is a great story and headlines, the google battle and so now has a the to pick with a small innovator, a guy came up with a way to make smart speakers, very innovative company, came up a lot of technologies adapted by google and apple. As those companies are getting bigger and more powerful they started infringing on those patents, they have taken apple to court over Patent Infringement. 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. Apple in some ways is responsible more so than huawei, the chinese chipmaker gets a lot of flak for being the new go to chip company, infringing on qualcomm but apple was on a 3 continent battle with qualcomm, the biggest 5g innovator in the world infringing on its patents. At some point they said we dont want to pay what you are asking so these companies are implementing thousands of technologies, they want them to be inexpensive, in some ways they are legally taking this information or infringing on patents, sometimes they simply by up Small Companies in order to get rid of competitions so it is the big getting bigger and using the system to wrigley innovation environment in ways that are a 0sum game, to make one more point you cant have an economy in which four companies are taking all the wealth, you need a bigger unit Innovation Ecosystem. Host they would have sued amazon too but couldnt afford to take both of them on at the same time. Apple has been taken on by spotify, for all the names in. Host couldnt you argue implementation is innovation in a lot of cases . Even the beginnings of apple, they have a graphic user interface, how could you have this just sitting here, someone should bring this into the world and set out this version, there is the allocation but some could argue that part of what companies, even Big Companies become good at is bringing that innovation to life coming into the economy and getting it to people. Guest a lot of people would argue that. I dont see a Consumer Electronics product that hasnt had a Game Changing innovation since the smart phone in 2007. More or less everything has been iterative. Apple has been clever as a marketer, as a brand creator. Value lives in 3 places, it lives globally, in big brands, creating a veneer of desirability and real estate. That is where value lives. The new world we are moving into there is going to be an environment of deflation, commoditization of everything. You see apple fighting, look at apple losing the battle, a big chinese smartphone maker in a number of emerging markets. Apples success in packaging product and selling them in giant glass boxes is not helping put more americans to work, it is not helping to create the next big productive bubble in Green Technology or in things that would really bring along a Critical Mass of workers in volterra economy to the next good placement selling more expensive stuff. I would argue that a company like qualcomm not that that is a private company. Theyve done things i wouldnt want but that is a company that came up with the 5g chip. This is something that makes the smart phone smart. They have to duke it out to stay alive in continental legal battles with other American Companies at the same time you have china rolling out one built, one road, working seamlessly to execute huaweis chips and technology into a new ecosystem. That is a model we should be looking more carefully at than this sort of laissezfaire 0sum game, keep margins as tight as you can, outsource the supply chains wherever you want. We see the last few weeks and months the number of corporate scandals that that kind of 0sum Balance Sheet financial eyes thinking has led to. Host think about the differences. The legacy in the us is different from europe. In europe it is more about protecting competition and protecting the consumer. It seems in this digital era that kind of distinction cant work the same way it used to. When you talk about facebook, google, very often Companies Want to say look at the consumer. The customer for them is the advertiser, that is the consumer and they are paying a lot more than nothing. Does the old model for antitrust work in the us, is the european model better . Guest 2 or 3 points i would make, the tech giants, google likes to say competition is a click away. Eric schmidt saying that, lets be serious, back to your question, if you were doing a Google Search in your computer stopped working would you go to being or would you try google again . Host i am paranoid. I do i use google sometimes, i do some shopping on walmart. Com, spreading my data all over the place. Guest equal opportunity surveillance. The deeper point, the rules of freemarket capitalism do stop working like laws of gravity that has long as both sides know what the transaction is, what is the problem . In this world you are paying not in dollars but your data neither of those things hold. You dont know what you are giving up for what you are getting. You know youre getting a search but you dont know what the data is worth that you just gave google or amazon. It is a very asymmetric transaction and that is the problem right away. When you are doing barter and not paying in dollars that is not freemarket, that is not the way adam smith would have imagined it. Adam smith would have said you need equal access to data, transparency and a shared moral framework for markets to function properly. You do not have that in any of these things when dealing with a digital giant. It calls in a technical way into question this 1980s school of thought that it is Consumer Prices that matter. That is the school of thought that allowed walmart to get this big and destroy town squares. We get our cheap stuff, that is good for us i guess but there are a lot of negative externalities. You get less choice but in this world of 3, i put quotation marks around 3, you think it is free, you are paid but dont know how much, that model doesnt work anymore, you have to look at two things. You can look at the Innovation Ecosystem which is the way the europeans do it. They are like biological systems, looking at a petri dish or a pond, the plant and frogs and fishermen. How do we make sure the system is working for everyone . That is a very european way of doing things. That is why antitrust cases take years and decades. The outcomes are questionable. Interestingly theres an nyu academic, looking at how by many measures european markets work better in our fear in terms of diversity of players in the tech space because they are more sensitive to Small Businesses, the consumer doing well, do Big Companies that depend on patents versus open Software Everyone getting a fair shot, put that aside for a moment, you have to think about political power and the political economy in a way that we havent thought about in this country for 40 or 50 years. One of the things i spent a lot of time thinking about was the Nineteenth Century railroad paradigm. Back to the rockefellers and vanderbilt that you have networks of the Nineteenth Century economy being built by the Railroad Companies are just one point they owns not just the railroads but, the wheat and commodities, and they could preference who was traveling, how and when, they would hand out free passes to their politicians for their political rallies, you have to look at the tech firms in that way, you should not be able to both control the network and all the commerce that happens on the network because you inevitably come into conflict with your own suppliers. Look at amazon for example. A lot of companies will simply not take on antitrust issues because they can be disappeared from their business. They can become from all the consumers of amazon decides they dont want an algorithmic preference in their purse result, the same goes for google and you see antitrust come to light over this but they are very difficult to prove because there is this black box of algorithms, we should dig into that. Host with amazon it is amazon having the ecommerce site and Logistics Network deliver packages and allow third parties to operate but at the same time have its own brand of products competing against that and having an apps store where a thirdparty has to do business if they have an apps on the platform but having its own apps on that platform with podcasts or music, if i am spotify, you are competing with me. Thank you for decoding all of my academic wonky notice. There are rules in place 2 separate networks and ecommerce was the Company Provides a network competing against third parties that are not transparent and are often fair and in the financial sector, being financed, you have that say goldman sachs, you can trade aluminum but you cant own all the aluminum in the world and corner the market which was an issue that i covered in my first book, to get around those rules amazon not amazon. Other Big Companies, bought up a bunch of aluminum and moving from one warehouse to another to get around the commerce network. There are loopholes but a president does exist and it existed in the Railroad Business as well. You had a reformer, Louis Brandeis say we are going to bust up these trusts and took on the system and looked at the idea that political power exists. We are not living in a fairy world of everyone is making efficient choices and free markets are perfect. If we think about economics certainly since 2008 but really always, they are not perfect, markets dont always invest. Host in november your book came out, really puts a spotlight on the likes of google, facebook, apple, amazon and a few others as well and how their size, some would say success, their treatment of data and marketplaces have an impact not just on customers but all Global Society specifically in the us. Can we regulate data, information, without at the same time even unintentionally regulating speech . Because people are choosing a lot of cases to talk to alexa, pursue put information in the Search Engine on social networks, pictures on instagram that are giving away bits of location information, giving it away for free, making the choice what to do with their speech, how can it be stopped . Guest this something i really grappled with, this idea of whether platforms like facebook or google should be liable for what happens on them. On the one hand you dont want facebook monetizing the massacre of people in new zealand but also dont want Mark Zuckerberg to be the minister of truth. That is the line we are walking but let me point out a few things, as folks think about this argument these companies have this get out of jail free loophole that was written in Communications Decency act in 1996, allowing them to not be liable in the way you or i as journalists looking for media sources for what we say or do. If i print something factually inaccurate we could be suited i could lose my job, not so for google or facebook but look at what these companies do . They put tons and tons of content online and then sell advertising against it. They want to say we are town square but wants to have a Business Model that eats for lunch the traditional media and has created a post fact world which has led to all kinds of problems and challenges for liberal democracy. We have to consider rethinking cda 230. You are seeing chinks carved into it. There was a high profile case around backpage. Com. A website that was knowingly trafficking minors as prostitutes. This was something both the right and the left took on and now the platforms have a liability if there is sex trafficking for minors or federal high crimes, they have liability for those things, they do a pretty good job using algorithms to get child pornography off their websites. We have to look closely at how much more they can do and have to think about if they cant do it should they be allowed to monetize content at scale in the way they do . Turn the entire internet upside down or inside out, the idea being even the comments on news sites are covered under that. I want people to have conversations but i dont know, you cant have youtube, if a rogue upload the bad piece of content youtube will be liable. At the Financial Times we look over numerous employees to look over user content and if they are inappropriate or hateful we get them down. That a decision the publication has taken. These are decisions each government has to make individually and he was in countries like germany, france, the eu, china, singapore make desperate calls in terms of how content will be policed. I think it is important that this be a democratically led decision. I do not want individual private Companies One by one making these decisions because they will do what is best for their own profit margins. Something tangential the one of the key anecdotes and one of the reasons i wrote this book aside from looking at the economic power of these companies was full disclosure my own son became addicted to a free online soccer game. I came home and a card bill. Host 900. Guest 947 worth of tiny charges. Who could have done this . My 10yearold son alex had become addicted to a free apps that uses what is called persuasive technology, they are literally casino gaming techniques, all of this persuasive stuff takes you down a rabbit hole in which you are spending spending spending, minors are being marketed to in ways that may fall afoul of existing rules with children and media but i thought about this as it is like nicotine. This is as addictive and as nefarious as smoking. We need governments to put limits on things like that and we need a Government Agency of some kind, even in fda of technology to look at what are the whole battery of affects . Our Brain Science is being changed, children are being reshaped, Digital Natives that came of age using their phone they read less, their Attention Spans are lower, higher levels of anxiety and depression, difficult to prove causality and the research is pretty new but there is strong sociological Research Showing we are being affected in serious ways by this technology. Can we get this genie back in the bottle . In a sense the goal of marketing of advertising just got so good with data. These sites are constantly based on little pieces of information tweaking the layout of their apps, their site to drive drive engagement, doses of dopamine to keep them engaged. And investor would say that is why the stock is so high, love that. Do we need to have data on exactly how that works to regulate . I think we do and you are seeing social scientists come out. There was a wonderful book, looking at the last ten years or so of usage of mobile technology and correlating with things like depression and anxiety and isolation, a body of research developing that needs to be looked at, you have now in the dsm diagnostic, new ailments that relate to digital usage, digital addiction, these are real things and we need to treat them as such. Silicon valley has a real problem. They take credit for the wonderful things they do, they give up this wonderful technology, entertaining, productivity enhancing to a certain extent but not so good at taking responsibility for the downside. They are not so great at admitting they didnt do it all themselves, these technologies were built on federally funded r d, think about the internet touchscreen technology, gps, these were things became out of the pentagon, taxpayerfunded darpa innovations commercialized by the valley so you have similar to the 2008 crisis this privatization of profits but socialization of losses in so many ways, the human cost of automation, we havent even gotten into that, a chapter on everything, you and i, robots will be doing our jobs at some point. Reuters has experimented with algorithmic reporters. Theres going to be disruption higher up the food chain, you have a handful of doubledigit profits not taking responsibility for this and that has to change. Robots are already doing my old job with earnings releases. That is not the story that you write. You frame the issue this way early in the book, the issue is periods of great technological change are characterized by great disruption which needs to be managed for society as a whole, the religious wars of the sixteenth and seventeenth centuries which as Niall Ferguson outlined in his book might not have happened but for the advent of new technologies like the Printing Press which brought with it the age of enlightenment but not before it upset all orders the same way the internet and social media have appended society. There is a lot in there and very compelling. How do you go back to that time and fix that, information is good but bad things happened. E