Innovation Monitor: Google, FB & the Big Bad Business Model

Innovation Monitor: Google, FB & the Big Bad Business Model

A dive into the world of technology-augmented sound

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Welcome to this week’s Innovation Monitor.

Topics like data privacy, antitrust, misinformation, and screen addiction are increasingly becoming part of everyday conversations on innovation and technology trends. In this week’s edition we’ll see how these four topics come together, first by looking at the problem and then a possible solution.

We had the privilege of hosting Tristan Harris, Co-Founder of the Center for Humane Technology, and Andrew Yang, Founder of Humanity Forward, at our recent NYC Media Lab Summit 2020. Tristan and his team are spearheading a movement to raise awareness around the societal challenges created by social media and tech platforms. Andrew offers us a possible way out.

So this week, we’ll begin with our conversation with Tristan and the dilemma. We’ll then explore the case for breaking up Big Tech and monopolies, and a possible solution that combines the idea of dividends with data ownership.

As always, we wish you and your community safety, calm and solidarity as we support each other through these times. Thank you for reading!

All best,
Erica Matsumoto The Social Dilemma Back in 2013, a Google product manager (and later Design Ethicist and Product Philosopher) named Tristan Harris sent around a humorous but important slideshow to around 10 friends within the company. It was a call to action to minimize unhealthy distractions across Google products, and it was years ahead of its time — or at least the years it took for media to shine a spotlight on the attention economy. We recommend you read through the 10-minute presentation.

The Verge noted in a 2018 piece that the slideshow was eventually viewed by thousands of employees, with little direct action taken. (On a side note, Google did introduce an Android feature recently that allows you to mute your phone when you put it face down). Harris eventually went on to found the Center for Humane Technology and was a featured guest in The Social Dilemma documentary.

We spoke to Harris during the NYC Media Lab Summit to get his views on the documentary’s viral growth, how some CS and Gen Z students are experiencing doubts about working in what some have coined ‘surveillance capitalism,’ and how the film can be a vehicle for change. It’s a 19-minute talk and it’s definitely, er, worth your attention. Our favorite quote:

“At the end of the day, what’s worth my attention? I think that’s the critical thing here. A whale that is dead is worth more than when it’s alive, and a tree is worth more as lumber than a tree. Now we’re the whale, we’re the tree, we’re worth more when we’re addicted, outraged, polarized, disinformed, than if we’re a thriving citizen of a democracy or a healthy kid that’s growing up with a lot of community support. I think each of us can ask the question, what is worth our attention?

Tackling Monopoly On October 20, the Justice Department filed an antitrust case against Google. In a nutshell, “the hotly anticipated, long-awaited lawsuit accuses Google of using its market dominance to force unfair contract terms on suppliers and competitors to the detriment of competition and the marketplace,” writes Ars Technica.

The piece does a great job of what this actually means, what we know so far… and what we don’t. What we can agree on is, this is only the beginning. After all, Microsoft spent 21 years fighting antitrust lawsuits with the US government, a drawn out battle that culminated in 2011.

What does the lawsuit allege?

According to the DOJ (as cited by the Ars Technica piece), “for years, Google has entered into exclusionary agreements, including tying arrangements and engaged in anticompetitive conduct to lock up distribution channels and block rivals. Google pays billions of dollars each year to distributors — including popular-device manufacturers such as Apple, LG, Motorola, and Samsung; major U.S. wireless carriers such as AT&T, T-Mobile, and Verizon; and browser developers such as Mozilla, Opera, and UCWeb — to secure default status for its general search engine and, in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors.” And yes, this particular lawsuit just focuses on search.

What sort of outcomes could we see?

The article suggests that it’s definitely possible that Google could get broken up, “but also definitely not at all guaranteed. DOJ officials did not say they were looking for a breakup, but they also didn’t rule it out.” It also points out that Google has been encumbered with antitrust investigations in Europe over the last few years: “The EU fined Google for violation of antitrust law three separate times in recent years: €2.4 billion ($2.7 billion) in 2017, related to search; €4.3 billion ($5 billion) in 2018, related to Android; and €1.5 billion ($1.7 billion) in 2019, related to AdSense.”

“In the wake of those cases, Google had to make some changes to the way it operates inside the EU.” That includes the announcement in 2018 that “Android device manufacturers would be allowed to unbundle the Android app package — for a fee.”

Is this really a big deal?

“The suit certainly has the potential to be a big deal. Google has thoroughly cemented its status as one of the biggest companies in the world by making its services utterly integral to the lives of billions of people. Stronger regulatory and legal action could have a profound effect on basically everyone, including a huge swath of businesses.”

The New York Times noted “the lawsuit, which may stretch on for years, could set off a cascade of other antitrust lawsuits from state attorneys general. About four dozen states and jurisdictions, including New York and Texas, have conducted parallel investigations and some of them are expected to bring separate complaints against the company’s grip on technology for online advertising.” How Do We Fix This?

How do these ideas relate to each other, and how can we begin to think about possible solutions? Let’s start with an example from Alaska.

If you’re an Alaskan for a full calendar year, you’re entitled to a dividend from the Alaska Permanent Fund (annual amounts above). According to the state’s constitution, “at least twenty-five percent of all mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments and bonuses received by the State shall be placed in a permanent fund.” Essentially, the state gets lease income and royalties from oil and gas companies, and the population gets a portion.

The University of Alaska Anchorage estimates that the Fund helps lift 15k-25k Alaskans out of poverty every year. Can we do something like that with data? That’s tricky. Ioana Elena Marinescu, an economics professor from the University of Pennsylvania, says the question becomes “Is my data more valuable than your data? If it is, how much more and how much should each person be getting?” Despite the complexity and confusion, people have been pushing for a Data Dividend. In February 2019, California governor Gavin Newsom proposed that “tech companies pay a dividend to residents is the latest attempt to address a widening income gap in the state that boasts the most billionaires.” Senator John Kennedy also proposed legislation around data rights in 2019, but this didn’t go anywhere.

Andrew Yang launched his own Data Dividend Project in June this year. The Projects is “a movement committed to establishing and enforcing data property rights. It seeks to update state privacy laws like the California Consumer Privacy Act to officially grant people the right to own and sell their data,” notes Slate. Essentially, people submit their information, and Yang’s team reaches out to tech companies to negotiate for compensation. You get a tracking number to follow their progress.

The idea isn’t without detractors, including Slate’s Elizabeth M. Renieris, Ravi Naik, and Jonnie Penn: “These kinds of initiatives put individuals at risk. Not only is personal data effectively worthless on its own in the market, but drawing boundaries around personal data that can be ‘owned’ by an individual may be an exercise in futility. In the context of a crisis like COVID-19, it would be disastrous. Imagine if an #OwnYourData-style model were in place now. Imagine if it set the rules for contact tracing. Should someone have the right to sell your contact information to Facebook without your consent? Should they have the right to withhold it from the CDC or, on the contrary, sell it into Google’s ‘internal data free-for-all’ with no protections?”

Of course, politicians aren’t the only ones pushing for this. Listen to VR godfather Jaron Lanier’s take on “fixing the internet”:

This Week in Business History

October 19th, 1985: The first Blockbuster video-rental store opens in Dallas, Texas.

The Blockbuster Backstory:

Blockbuster was founded by David Cook, who had previously owned a business that provided computer software services to the oil and gas industry in Texas. Cook saw the potential in the video-rental business and after opening the first Blockbuster in 1985, he added three more stores the following year. In 1987, he sold part of the business to a group of investors that included Wayne Huizenga, founder of Waste Management, Inc., the world’s biggest garbage disposal company.

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