Big tech — America’s soft power
I spent past two weeks driving across the US from NYC to LA with a bunch of friends I got together. Being isolated from Covid and surrounded by unbelievable landscapes, proved to be breeding ground for multiple fascinating conversations. One in particular had a more profound impact on my thinking both as a European and a US resident. It made me question the assumptions around the government that I had grown up with.
Whom should we, citizens, trust?
The conversation started off with a contrasting view on governance and trust built into the society when looking at growing power of American big tech corporations. After all, we have been observing for a longer while ever-increasing importance of tech in the markets some of which may soon become the first 2-trillion companies.
Usually abundance of resources is a blessing, yet oddly enough the latest bull run in the markets presents a set of very unique circumstances to the big tech. In short, their size makes it ever more important to justify their valuations/profits which they can only do by targeting new, large, and untapped industries. This means that soon enough they will be making decisions about areas of our lives that we never associated with online platforms or office software— healthcare, education, etc.
Do we trust them, however, with making life-changing decisions through constant series of A/B tests? Do we trust them with deciding what’s best for our children? Do we trust corporations or government more?
Are we surrounded by monopolies?
I grew up hearing about Bill Gates’s congressional hearings and the all-famous Microsoft Corp v United States anti-trust case. At the time it seemed as if Microsoft was the evil, all-powerful corporation that wrecked all of their competitors and limited consumer choice through their policies. Yet, today’s situation in multiple market feels the same but despite big tech’s growing importance there was no major prosecution case started.
As a customer I am surrounded these days by endless walled gardens of data — Google Maps, Yelp, Foursquare, YouTube, Facebook, Apple, Android, Amazon Prime, you name it. Let’s take an example of modern communication, one is presented by a multitude of options through iMessage/Messenger/Whatsapp yet none of these can actually talk to each other making the customer having to download all of them to make sure they can reach any of their friends. Imagine if each of the cell phone companies used a different network that was incompatible with one another, would the government step in and force AT&T to provide customers with a better choice? Yet digital services’ reach billions of people at a low marginal cost compared to traditional industries which take longer and more expensive to scale and are usually bounded by one country’s population, i.e millions of people.
Unspoken strategical alignment between big tech and US gov
Geopolitical power can projected in two ways:
- Hard power, i.e using a military or economic force
- Soft power, i.e through diplomatic, cultural and historical means
United States asserted itself as a global power during WWII and post-war recovery establishing Pax Americana. It has done so through multiple means of assisting economic recovery of damaged countries, providing security guarantees to its allies through NATO, enforcing freedom of navigation enabling global trade while simultaneously spreading its cultural influence through Hollywood and other media.
Interestingly enough, one can draw parallels to the power exerted nowadays by two major big tech countries: US and increasingly China. Something that used to be unheard of at scale — reaching and influencing millions of foreign citizens — is currently easily available to large US and Chinese corporations. In the old days, all you could do to affect people behind the Iron curtain was to try to listen to Radio Free Europe funded by the US government, these days all it takes is to alter ever-so-slightly results of a simple online search.
If we look at big tech from the point of view of geopolitics and asymmetry of market access, i.e major US big tech companies being banned in China, it is clear that curbing their competitiveness can be contrary to national interest.
The intersection of global politics and big tech
The collaboration between the United States and Europe has generally been aligned since the end of WWII yet the Trump administration has been more assertive lately wherever it is more convenient for them. For example, the US threatened to scale back its NATO presence if EU does not increase its defense spend, but left talks about building a global taxation framework.
At the end of the day, US and China enjoy freedom of expanding their digital footprint through the Old Continent absent of any major digital force in the EU. This asymmetry of power is great for US/Chinese profits as who would not want to have access to the global market at low marginal cost while not being practically held accountable to any local market rules?
Who would care if Russia decided to meddle with latest Polish elections using a large misinformation campaign?