Algorithmic Culture

Some excerpts from this article point out the effect machine algorithms have on shaping our information, our entertainment, and our culture.

The Creepy and Creeping Power of Social Media

By Ned Ryun| June 8th, 2018

While algorithms are necessary to serve up the content people want, social media companies failing to be transparent on this front are dangerous…Algorithm tweaking isn’t neutral and it has a massive “follow on” effect in the digital industry and political world, changing the kind of content that people see everyday. So if the algorithm starts filtering [say, content] it puts a thumb on the scale, favoring one side over the other. With a small handful of controllers over the algorithms, it’s appropriate to ask who controls the controllers?

….

We should acknowledge that rule by algorithm can be just as stringent as any rule by a dictator, perhaps even more so as it is vague, faceless, and hard to define. These algorithms decide what you see and don’t see in your timeline, subtly determining for you what is “worthy” of your attention. Facebook treats this algorithm like a black box, we’re never allowed to look inside and see what’s going on, we’ll only ever see the results on our news feeds. A world ruled by algorithms—just like the one it replaced controlled by network executives—closes off views, closes off debates, and further Balkanizes people. So, in fact, how can these social media and tech giants save democracy when in fact they’re becoming less democratic?

This is the same dynamic that is filtering and feeding our artistic content through the world-wide web. We can only consume the content that we can find and this is how it’s being found.

Madmen and the Godless Algorithm

FB-vs-Google

This article from The New Yorker.

Good overview history of the advertising model that has dominated our commercialism for decades. It’s now gone on digital steroids. The disruption of ad technology has interesting implications.

How the Math Men Overthrew the Mad Men

By Ken Auletta

Once, Mad Men ruled advertising. They’ve now been eclipsed by Math Men—the engineers and data scientists whose province is machines, algorithms, pureed data, and artificial intelligence. Yet Math Men are beleaguered, as Mark Zuckerberg demonstrated when he humbled himself before Congress, in April. Math Men’s adoration of data—coupled with their truculence and an arrogant conviction that their “science” is nearly flawless—has aroused government anger, much as Microsoft did two decades ago.

The power of Math Men is awesome. Google and Facebook each has a market value exceeding the combined value of the six largest advertising and marketing holding companies. Together, they claim six out of every ten dollars spent on digital advertising, and nine out of ten new digital ad dollars. They have become more dominant in what is estimated to be an up to two-trillion-dollar annual global advertising and marketing business. Facebook alone generates more ad dollars than all of America’s newspapers, and Google has twice the ad revenues of Facebook.

In the advertising world, Big Data is the Holy Grail, because it enables marketers to target messages to individuals rather than general groups, creating what’s called addressable advertising. And only the digital giants possess state-of-the-art Big Data. “The game is no longer about sending you a mail order catalogue or even about targeting online advertising,” Shoshana Zuboff, a professor of business administration at the Harvard Business School, wrote on faz.net, in 2016. “The game is selling access to the real-time flow of your daily life—your reality—in order to directly influence and modify your behavior for profit.” Success at this “game” flows to those with the “ability to predict the future—specifically the future of behavior,” Zuboff writes. She dubs this “surveillance capitalism.” [I question whether this will really work as anticipated once everybody is hip to the game.]

However, to thrash just Facebook and Google is to miss the larger truth: everyone in advertising strives to eliminate risk by perfecting targeting data.[This is the essence of what we’re doing here – reducing the risk of uncertainty.] Protecting privacy is not foremost among the concerns of marketers; protecting and expanding their business is. The business model adopted by ad agencies and their clients parallels Facebook and Google’s. Each aims to massage data to better identify potential customers. Each aims to influence consumer behavior. To appreciate how alike their aims are, sit in an agency or client marketing meeting and you will hear wails about Facebook and Google’s “walled garden,” their unwillingness to share data on their users. When Facebook or Google counter that they must protect “the privacy” of their users, advertisers cry foul: You’re using the data to target ads we paid for—why won’t you share it, so that we can use it in other ad campaigns? [But who really owns your data? Even if you choose to give it away?]

This preoccupation with Big Data is also revealed by the trend in the advertising-agency business to have the media agency, not the creative Mad Men team, occupy the prime seat in pitches to clients, because it’s the media agency that harvests the data to help advertising clients better aim at potential consumers. Agencies compete to proclaim their own Big Data horde. W.P.P.’s GroupM, the largest media agency, has quietly assembled what it calls its “secret sauce,” a collection of forty thousand personally identifiable attributes it plans to retain on two hundred million adult Americans. Unlike Facebook or Google, GroupM can’t track most of what we do online. To parade their sensitivity to privacy, agencies reassuringly boast that they don’t know the names of people in their data bank. But they do have your I.P. address, which yields abundant information, including where you live. For marketers, the advantage of being able to track online behavior, the former senior GroupM executive Brian Lesser said—a bit hyperbolically, one hopes—is that “we know what you want even before you know you want it.”[That sounds like adman hubris rather than reality.]

Worried that Brian Lesser’s dream will become a nightmare, ProPublica has ferociously chewed on the Big Data privacy menace like a dog with a bone: in its series “Breaking the Black Box,” it wrote, “Facebook has a particularly comprehensive set of dossiers on its more than two billion members. Every time a Facebook member likes a post, tags a photo, updates their favorite movies in their profile, posts a comment about a politician, or changes their relationship status, Facebook logs it . . . When they use Instagram or WhatsApp on their phone, which are both owned by Facebook, they contribute more data to Facebook’s dossier.” Facebook offers advertisers more than thirteen hundred categories for ad targeting, according to ProPublica.

Google, for its part, has merged all the data it collects from its search, YouTube, and other services, and has introduced an About Me page, which includes your date of birth, phone number, where you work, mailing address, education, where you’ve travelled, your nickname, photo, and e-mail address. Amazon knows even more about you. Since it is the world’s largest store and sees what you’ve actually purchased, its data are unrivalled. Amazon reaches beyond what interests you (revealed by a Google search) or what your friends are saying (on Facebook) to what you actually purchase. With Amazon’s Alexa, it has an agent in your home that not only knows what you bought but when you wake up, what you watch, read, listen to, ask for, and eat. And Amazon is aggressively building up its meager ad sales, which gives it an incentive to exploit its data.

Data excite advertisers. Prowling his London office in jeans, Keith Weed, who oversees marketing and communications for Unilever, one of the world’s largest advertisers, described how mobile phones have elevated data as a marketing tool. “When I started in marketing, we were using secondhand data which was three months old,” he said. “Now with the good old mobile, I have individualized data on people. You don’t need to know their names . . . You know their telephone number. You know where they live, because it’s the same location as their PC.” Weed knows what times of the day you usually browse, watch videos, answer e-mail, travel to the office—and what travel routes you take. “From your mobile, I know whether you stay in four-star or two-star hotels, whether you go to train stations or airports. I use these insights along with what you’re browsing on your PC. I know whether you’re interested in horses or holidays in the Caribbean.” By using programmatic computers to buy ads targeting these individuals, he says, Unilever can “create a hundred thousand permutations of the same ad,” as they recently did with a thirty-second TV ad for Axe toiletries aimed at young men in Brazil. The more Keith Weed knows about a consumer, the better he can aim to target a sale.

Engineers and data scientists vacuum data. They see data as virtuous, yielding clues to the mysteries of human behavior, suggesting efficiencies (including eliminating costly middlemen, like agency Mad Men), offering answers that they believe will better serve consumers, because the marketing message is individualized. The more cool things offered, the more clicks, the more page views, the more user engagement. Data yield facts and advance a quest to be more scientific—free of guesses. As Eric Schmidt, then the executive chairman of Google’s parent company, Alphabet, said at the company’s 2017 shareholder meeting, “We start from the principles of science at Google and Alphabet.”

They believe there is nobility in their quest. By offering individualized marketing messages, they are trading something of value in exchange for a consumer’s attention. They also start from the principle, as the TV networks did, that advertising allows their product to be “free.” But, of course, as their audience swells, so does their data. Sandy Parakilas, who was Facebook’s operations manager on its platform team from 2011 to 2012, put it this way in a scathing Op-Ed for the Times, last November: “The more data it has on offer, the more value it creates for advertisers. That means it has no incentive to police the collection or use of that data—except when negative press or regulators are involved.” For the engineers, the privacy issue—like “fake news” and even fraud—was relegated to the nosebleed bleachers. [This fact should be obvious to all of us.]

With a chorus of marketers and citizens and governments now roaring their concern, the limitations of Math Men loom large. Suddenly, governments in the U.S. are almost as alive to privacy dangers as those in Western Europe, confronting Facebook by asking how the political-data company Cambridge Analytica, employed by Donald Trump’s Presidential campaign, was able to snatch personal data from eighty-seven million individual Facebook profiles. Was Facebook blind—or deliberately mute? Why, they are really asking, should we believe in the infallibility of your machines and your willingness to protect our privacy?

Ad agencies and advertisers have long been uneasy not just with the “walled gardens” of Facebook and Google but with their unwillingness to allow an independent company to monitor their results, as Nielsen does for TV and comScore does online. This mistrust escalated in 2016, when it emerged that Facebook and Google charged advertisers for ads that tricked other machines to believe an ad message was seen by humans when it was not. Advertiser confidence in Facebook was further jolted later in 2016, when it was revealed that the Math Men at Facebook overestimated the average time viewers spent watching video by up to eighty per cent. And in 2017, Math Men took another beating when news broke that Google’s YouTube and Facebook’s machines were inserting friendly ads on unfriendly platforms, including racist sites and porn sites. These were ads targeted by keywords, like “Confederacy” or “race”; placing an ad on a history site might locate it on a Nazi-history site.

The credibility of these digital giants was further subverted when Russian trolls proved how easy it was to disseminate “fake news” on social networks. When told that Facebook’s mechanized defenses had failed to screen out disinformation planted on the social network to sabotage Hillary Clinton’s Presidential campaign, Mark Zuckerberg publicly dismissed the assertion as “pretty crazy,” a position he later conceded was wrong.

By the spring of 2018, Facebook had lost control of its narrative. Their original declared mission—to “connect people” and “build a global community”—had been replaced by an implicit new narrative: we connect advertisers to people.[Indeed, connecting people on a global basis for human interaction really doesn’t make a lot of sense. A global gossip network? Unless, of course, you’re trying to monetize it.] It took Facebook and Google about five years before they figured out how to generate revenue, and today roughly ninety-five percent of Facebook’s dollars and almost ninety percent of Google’s comes from advertising. They enjoy abundant riches because they tantalize advertisers with the promise that they can corral potential customers. This is how Facebook lured developers and app makers by offering them a permissive Graph A.P.I., granting them access to the daily habits and the interchange with friends of its users. This Graph A.P.I. is how Cambridge Analytica got its paws on the data of eighty-seven million Americans.

The humiliating furor this news provoked has not subverted the faith among Math Men that their “science” will prevail. They believe advertising will be further transformed by new scientific advances like artificial intelligence that will allow machines to customize ads, marginalizing human creativity. With algorithms creating profiles of individuals, Airbnb’s then chief marketing officer, Jonathan Mildenhall, told me, “brands can engineer without the need for human creativity.” Machines will craft ads, just as machines will drive cars. But the ad community is increasingly mistrustful of the machines, and of Facebook and Google.[As they should be – the value has been over-hyped.] During a presentation at Advertising Week in New York this past September, Keith Weed offered a report to Facebook and Google. He gave them a mere “C” for policing ad fraud, and a harsher “F” for cross-platform transparency, insisting, “We’ve got to see over the walled gardens.”

That mistrust has gone viral. A powerful case for more government regulation of the digital giants was made by The Economist, a classically conservative publication that also endorsed the government’s antitrust prosecution of Microsoft, in 1999. The magazine editorialized, in May, 2017, that governments must better police the five digital giants—Facebook, Google, Amazon, Apple, and Microsoft—because data were “the oil of the digital era”: “Old ways of thinking about competition, devised in the era of oil, look outdated in what has come to be called the ‘data economy.’ ” Inevitably, an abundance of data alters the nature of competition, allowing companies to benefit from network effects, with users multiplying and companies amassing wealth to swallow potential competitors.

The politics of Silicon Valley is left of center, but its disdain for government regulation has been right of center. This is changing. A Who’s Who of Silicon notables—Tim Berners-Lee, Tim Cook, Ev Williams, Sean Parker, and Tony Fadell, among others—have harshly criticized the social harm imposed by the digital giants. Marc Benioff, the C.E.O. of Salesforce.com—echoing similar sentiments expressed by Berners-Lee—has said, “The government is going to have to be involved. You do it exactly the same way you regulated the cigarette industry.”

Cries for regulating the digital giants are almost as loud today as they were to break up Microsoft in the late nineties. Congress insisted that Facebook’s Zuckerberg, not his minions, testify. The Federal Trade Commission is investigating Facebook’s manipulation of user data. Thirty-seven state attorneys general have joined a demand to learn how Facebook safeguards privacy. The European Union has imposed huge fines on Google and wants to inspect Google’s crown jewels—its search algorithms—claiming that Google’s search results are skewed to favor their own sites. The E.U.’s twenty-eight countries this May imposed a General Data Protection Regulation to protect the privacy of users, requiring that citizens must choose to opt in before companies can horde their data.

Here’s where advertisers and the digital giants lock arms: they speak with one voice in opposing opt-in legislation, which would deny access to data without the permission of users. If consumers wish to deny advertisers access to their cookies—their data—they agree: the consumer must voluntarily opt out, meaning they must endure a cumbersome and confusing series of online steps. Amid the furor about Facebook and Google, remember these twinned and rarely acknowledged truisms: more data probably equals less privacy, while more privacy equals less advertising revenue. Thus, those who rely on advertising have business reasons to remain tone-deaf to privacy concerns.

Those reliant on advertising know: the disruption that earlier slammed the music, newspaper, magazine, taxi, and retail industries now upends advertising. Agencies are being challenged by a host of competitive frenemies: by consulting and public-relations companies that have jumped into their business; by platform customers like Google and Facebook but also the Times, NBC, and Buzzfeed, that now double as ad agencies and talk directly to their clients; by clients that increasingly perform advertising functions in-house.

But the foremost frenemy is the public, which poses an existential threat not just to agencies but to Facebook and the ad revenues on which most media rely. Citizens protest annoying, interruptive advertising, particularly on their mobile phones—a device as personal as a purse or wallet. An estimated twenty per cent of Americans, and one-third of Western Europeans, employ ad-blocker software. More than half of those who record programs on their DVRs choose to skip the ads. Netflix and Amazon, among others, have accustomed viewers to watch what they want when they want, without commercial interruption.

Understandably, those dependent on ad dollars quake. The advertising and marketing world scrambles for new ways to reach consumers. Big Data, they believe, promises ways they might better communicate with annoyed consumers—maybe unlock ways that ads can be embraced as a useful individual service rather than as an interruption. If Big Data’s use is circumscribed to protect privacy, the advertising business will suffer. In this core conviction, at least, Mad Men and Math Men are alike.

This piece is partially adapted from Auletta’s forthcoming book, “Frenemies: The Epic Disruption of the Ad Business (and Everything Else).”

 

I would guess that the ad business will be disrupted further as we find new ways to connect consumers with what they want. This will reduce the power of the Math Men at centralized network servers.

I also suspect search will become a regulated public utility. A free society cannot tolerate one or two private corporations controlling all the information data that flows through its networks.

 

Put The Damn Phone Down and Do Something

This is a good interview with the Ben Silbermann, founder of Pinterest, published on Medium.

Some excerpts:

We’re social creatures. We need to connect with other people.

Pinterest is actually…it’s really about you. It’s about your tastes, your aspirations, your plans. There are other people there. Our recommendations are all curated by other users. The objective is not to do that [seek Likes]. That’s why it’s different than social networks.

sure, it’s fun to look at millions of ideas, but eventually, the real satisfaction and joy comes from giving it a shot. It might turn out great. It might turn out poorly. All of that is fine. We want to be the company that motivates you to put your phone down and to go try those things.

So, Pinterest is doing the right things to encourage engagement within the community. The next step of Web 3.0 is to distribute the network value they create back to the community of users. tuka will do that.

What’s Going On?

Vampire Squid
This is an excellent interview with technology culture guru Jaron Lanier, author of some very insightful books on the clashes between technology and humanism. See comments and highlights below…

And then when you move out of the tech world, everybody’s struggling…

It’s not so much that they’re doing badly, but they have only labor and no capital. Or the way I used to put it is, they have to sing for their supper, for every single meal. It’s making everyone else take on all the risk. It’s like we’re the people running the casino and everybody else takes the risks and we don’t. That’s how it feels to me. It’s not so much that everyone else is doing badly as that they’ve lost economic capital and standing, and momentum and plannability. It’s a subtle difference.

‘One Has This Feeling of Having Contributed to Something That’s Gone Very Wrong’

By Noah Kulwin April 17, 2018 New York Magazine

Over the last few months, Select All has interviewed more than a dozen prominent technology figures about what has gone wrong with the contemporary internet for a project called “The Internet Apologizes.” We’re now publishing lengthier transcripts of each individual interview. This interview features Jaron Lanier, a pioneer in the field of virtual reality and the founder of the first company to sell VR goggles. Lanier currently works at Microsoft Research as an interdisciplinary scientist. He is the author of the forthcoming book Ten Arguments for Deleting Your Social Media Accounts Right Now.

You can find other interviews from this series here.

Jaron Lanier: Can I just say one thing now, just to be very clear? Professionally, I’m at Microsoft, but when I speak to you, I’m not representing Microsoft at all. There’s not even the slightest hint that this represents any official Microsoft thing. I have an agreement within which I’m able to be an independent public intellectual, even if it means criticizing them. I just want to be very clear that this isn’t a Microsoft position.

Noah Kulwin: Understood.
Yeah, sorry. I really just wanted to get that down. So now please go ahead, I’m so sorry to interrupt you.

In November, you told Maureen Dowd that it’s scary and awful how out of touch Silicon Valley people have become. It’s a pretty forward remark. I’m kind of curious what you mean by that.
To me, one of the patterns we see that makes the world go wrong is when somebody acts as if they aren’t powerful when they actually are powerful. So if you’re still reacting against whatever you used to struggle for, but actually you’re in control, then you end up creating great damage in the world. Like, oh, I don’t know, I could give you many examples. But let’s say like Russia’s still acting as if it’s being destroyed when it isn’t, and it’s creating great damage in the world. And Silicon Valley’s kind of like that.

We used to be kind of rebels, like, if you go back to the origins of Silicon Valley culture, there were these big traditional companies like IBM that seemed to be impenetrable fortresses. And we had to create our own world. To us, we were the underdogs and we had to struggle. And we’ve won. I mean, we have just totally won. We run everything. We are the conduit of everything else happening in the world. We’ve disrupted absolutely everything. Politics, finance, education, media, relationships — family relationships, romantic relationships — we’ve put ourselves in the middle of everything, we’ve absolutely won. But we don’t act like it.

We have no sense of balance or modesty or graciousness having won. We’re still acting as if we’re in trouble and we have to defend ourselves, which is preposterous. And so in doing that we really kind of turn into assholes, you know?

How do you think that siege mentality has fed into the ongoing crisis with the tech backlash?

One of the problems is that we’ve isolated ourselves through extreme wealth and success. Before, we might’ve been isolated because we were nerdy insurgents. But now we’ve found a new method to isolate ourselves, where we’re just so successful and so different from so many other people that our circumstances are different. And we have less in common with all the people whose lives we’ve disrupted. I’m just really struck by that. I’m struck with just how much better off we are financially, and I don’t like the feeling of it.

Personally, I would give up a lot of the wealth and elite status that we have in order to just live in a friendly, more connected world where it would be easier to move about and not feel like everything else is insecure and falling apart. People in the tech world, they’re all doing great, they all feel secure. I mean they might worry about a nuclear attack or something, but their personal lives are really secure.

And then when you move out of the tech world, everybody’s struggling. It’s a very strange thing. The numbers show an economy that’s doing well, but the reality is that the way it’s doing well doesn’t give many people a feeling of security or confidence in their futures. It’s like everybody’s working for Uber in one way or another. Everything’s become the gig economy. And we routed it that way, that’s our doing. There’s this strange feeling when you just look outside of the tight circle of Silicon Valley, almost like entering another country, where people are less secure. It’s not a good feeling. I don’t think it’s worth it, I think we’re wrong to want that feeling.

It’s not so much that they’re doing badly, but they have only labor and no capital. Or the way I used to put it is, they have to sing for their supper, for every single meal. It’s making everyone else take on all the risk. It’s like we’re the people running the casino and everybody else takes the risks and we don’t. That’s how it feels to me. It’s not so much that everyone else is doing badly as that they’ve lost economic capital and standing, and momentum and plannability. It’s a subtle difference.

There’s still this rhetoric of being the underdog in the tech industry. The attitude within the Valley is “Are you kidding? You think we’re resting on our laurels? No! We have to fight for every yard.”

There’s this question of whether what you’re fighting for is something that’s really new and a benefit for humanity, or if you’re only engaged in a sort of contest with other people that’s fundamentally not meaningful to anyone else. The theory of markets and capitalism is that when we compete, what we’re competing for is to get better at something that’s actually a benefit to people, so that everybody wins. So if you’re building a better mousetrap, or a better machine-learning algorithm, then that competition should generate improvement for everybody.

But if it’s a purely abstract competition set up between insiders to the exclusion of outsiders, it might feel like a competition, it might feel very challenging and stressful and hard to the people doing it, but it doesn’t actually do anything for anybody else. It’s no longer genuinely productive for anybody, it’s a fake. And I’m a little concerned that a lot of what we’ve been doing in Silicon Valley has started to take on that quality. I think that’s been a problem in Wall Street for a while, but the way it’s been a problem in Wall Street has been aided by Silicon Valley. Everything becomes a little more abstract and a little more computer-based. You have this very complex style of competition that might not actually have much substance to it.

You look at the big platforms, and it’s not like there’s this bountiful ecosystem of start-ups. The rate of small-business creation is at its lowest in decades, and instead you have a certain number of start-ups competing to be acquired by a handful of companies. There are not that many varying powers, there’s just a few.
That’s something I’ve been complaining about and I’ve written about for a while, that Silicon Valley used to be this place where people could do a start-up and the start-up might become a big company on its own, or it might be acquired, or it might merge into things. But lately it kind of feels like both at the start and at the end of the life of a start-up, things are a little bit more constrained. It used to be that you didn’t have to know the right people, but now you do. You have to get in with the right angel investors or incubator or whatever at the start. And they’re just a small number, it’s like a social order, you have to get into them. And then the output on the other side is usually being acquired by one of a very small number of top companies.

There are a few exceptions, you can see Dropbox’s IPO. But they’re rarer and rarer. And I suspect Dropbox in the future might very well be acquired by one of the giants. It’s not clear that it’ll survive as its own thing in the long term. I mean, we don’t know. I have no inside information about that, I’m just saying that the much more typical scenario now, as you described, is that the companies go to one of the biggies.

I’m kind of curious what you think needs to happen to prevent future platforms, like VR, from going the way of social media and reaching this really profitable crisis state.

A lot of the rhetoric of Silicon Valley that has the utopian ring about creating meaningful communities where everybody’s creative and people collaborate and all this stuff — I don’t wanna make too much of my own contribution, but I was kind of the first author of some of that rhetoric a long time ago. So it kind of stings for me to see it misused. Like, I used to talk about how virtual reality could be a tool for empathy, and then I see Mark Zuckerberg talking about how VR could be a tool for empathy while being profoundly nonempathic, using VR to tour Puerto Rico after the storm, after Maria. One has this feeling of having contributed to something that’s gone very wrong.

So I guess the overall way I think of it is, first, we might remember ourselves as having been lucky that some of these problems started to come to a head during the social-media era, before tools like virtual reality become more prominent, because the technology is still not as intense as it probably will be in the future. So as bad as it’s been, as bad as the election interference and the fomenting of ethnic warfare, and the empowering of neo-Nazis, and the bullying — as bad as all of that has been, we might remember ourselves as having been fortunate that it happened when the technology was really just little slabs we carried around in our pockets that we could look at and that could talk to us, or little speakers we could talk to. It wasn’t yet a whole simulated reality that we could inhabit.

Because that will be so much more intense, and that has so much more potential for behavior modification, and fooling people, and controlling people. So things potentially could get a lot worse, and hopefully they’ll get better as a result of our experiences during this era.

As far as what to do differently, I’ve had a particular take on this for a long time that not everybody agrees with. I think the fundamental mistake we made is that we set up the wrong financial incentives, and that’s caused us to turn into jerks and screw around with people too much. Way back in the ’80s, we wanted everything to be free because we were hippie socialists. But we also loved entrepreneurs because we loved Steve Jobs. So you wanna be both a socialist and a libertarian at the same time, and it’s absurd. But that’s the kind of absurdity that Silicon Valley culture has to grapple with.

And there’s only one way to merge the two things, which is what we call the advertising model, where everything’s free but you pay for it by selling ads. But then because the technology gets better and better, the computers get bigger and cheaper, there’s more and more data — what started out as advertising morphed into continuous behavior modification on a mass basis, with everyone under surveillance by their devices and receiving calculated stimulus to modify them. So you end up with this mass behavior-modification empire, which is straight out of Philip K. Dick, or from earlier generations, from 1984.

It’s this thing that we were warned about. It’s this thing that we knew could happen. Norbert Wiener, who coined the term cybernetics, warned about it as a possibility. And despite all the warnings, and despite all of the cautions, we just walked right into it, and we created mass behavior-modification regimes out of our digital networks. We did it out of this desire to be both cool socialists and cool libertarians at the same time.

This dovetails with something you’ve said in the past that’s with me, which is your phrase Digital Maoism. Do you think that the Digital Maoism that you described years ago — are those the people who run Silicon Valley today?

I was talking about a few different things at the time I wrote “Digital Maoism.” One of them was the way that we were centralizing culture, even though the rhetoric was that we were distributing it. Before Wikipedia, I think it would have been viewed as being this horrible thing to say that there could only be one encyclopedia, and that there would be one dominant entry for a given topic. Instead, there were different encyclopedias. There would be variations not so much in what facts were presented, but in the way they were presented. That voice was a real thing.

And then we moved to this idea that we have a single dominant encyclopedia that was supposed to be the truth for the global AI or something like that. But there’s something deeply pernicious about that. So we’re saying anybody can write for Wikipedia, so it’s, like, purely democratic and it’s this wonderful open thing, and yet the bizarreness is that that open democratic process is on the surface of something that struck me as being Maoist, which is that there’s this one point of view that’s then gonna be the official one.

And then I also noticed that that process of people being put into a global system in which they’re supposed to work together toward some sort of dominating megabrain that’s the one truth didn’t seem to bring out the best in people, that people turned aggressive and mean-spirited when they interacted in that context. I had worked on some content for Britannica years and years ago, and I never experienced the kind of just petty meanness that’s just commonplace in everything about the internet. Among many other places, on Wikipedia.

On the one hand, you have this very open collective process actually in the service of this very domineering global brain, destroyer of local interpretation, destroyer of individual voice process. And then you also have this thing that seems to bring out this meanness in people, where people get into this kind of mob mentality and they become unkind to each other. And those two things have happened all over the internet; they’re both very present in Facebook, everywhere. And it’s a bit of a subtle debate, and it takes a while to work through it with somebody who doesn’t see what I’m talking about. That was what I was talking about.

But then there’s this other thing about the centralization of economic power. What happened with Maoists and with communists in general, and neo-Marxists and all kinds of similar movements, is that on the surface, you say everybody shares, everybody’s equal, we’re not gonna have this capitalist concentration. But then there’s some other entity that might not look like traditional capitalism, but is effectively some kind of robber baron that actually owns everything, some kind of Communist Party actually controls everything, and you have just a very small number of individuals who become hyperempowered and everybody else loses power.

And exactly the same thing has happened with the supposed openness of the internet, where you say, “Isn’t it wonderful, with Facebook and Twitter anybody can express themselves. Everybody’s an equal, everybody’s empowered.” But in fact, we’re in a period of time of extreme concentration of wealth and power, and it’s precisely around those who run the biggest computers. So the truth and the effect is just the opposite of what the rhetoric is and the immediate experience.

A lot of people were furious with me over Digital Maoism and felt that I had betrayed our cause or something, and I lost some friends over it. And some of it was actually hard. But I fail to see how it was anything but accurate. I don’t wanna brag, but I think I was just right. I think that that’s what was going on and that’s what’s happening in China. But what’s worse is that it’s happening elsewhere.

The thing is, I’m not sure that what’s going on in the U.S. is that distinct from what’s going on in China. I think there are some differences, but they’re in degree; they’re not stark. The Chinese are saying if you have a low social rating you can’t get on the subway, but on the other hand, we’re doing algorithmic profiling that’s sending people to jail, and we know that the algorithms are racist. Are we really that much better?

I’m not really sure. I think it would be hard to determine it. But I think we’re doing many of the same things; it’s just that we package them in a slightly different way when we tell stories to ourselves.

This is something I write about, you know I have another book coming out shortly?

Yeah, that was gonna be where I took this next.

One of the things that I’ve been concerned about is this illusion where you think that you’re in this super-democratic open thing, but actually it’s exactly the opposite; it’s actually creating a super concentration of wealth and power, and disempowering you. This has been particularly cruel politically. Every time there’s some movement, like the Black Lives Matter movement, or maybe now the March for Our Lives movement, or #MeToo, or very classically the Arab Spring, you have this initial period where people feel like they’re on this magic-carpet ride and that social media is letting them broadcast their opinions for very low cost, and that they’re able to reach people and organize faster than ever before. And they’re thinking, Wow, Facebook and Twitter are these wonderful tools of democracy.

But then the algorithms have to maximize value from all the data that’s coming in. So they test use that data. And it just turns out as a matter of course, that the same data that is a positive, constructive process for the people who generated it — Black Lives Matter, or the Arab Spring — can be used to irritate other groups. And unfortunately there’s this asymmetry in human emotions where the negative emotions of fear and hatred and paranoia and resentment come up faster, more cheaply, and they’re harder to dispel than the positive emotions. So what happens is, every time there’s some positive motion in these networks, the negative reaction is actually more powerful. So when you have a Black Lives Matter, the result of that is the empowerment of the worst racists and neo-Nazis in a way that hasn’t been seen in generations. When you have an Arab Spring, the result ultimately is the network empowerment of ISIS and other extremists — bloodthirsty, horrible things, the likes of which haven’t been seen in the Arab world or in Islam for years, if ever.

Black Lives Matter has incredible visibility, but the reality is that even though it has had an enormous effect on the discursive level, and at making the country fixated on this conversation, that’s distinct from political force necessary to effect that change. What do you think about the sort of gap between what Silicon Valley platforms have promised in that respect and then the material reality?

That observation — that social-media politics is all talk and no action or something, or that it’s empty — is compatible with, but a little bit different from, what I was saying. I’m saying that it empowers its opposite more than the original good intention. And those two things can both be true at once, but I just wanna point out that they’re two different explanations for why nothing decent seems to come out in the end.

I want to be wrong. I especially wanna be wrong about the March for Our Lives kids. I really wanna be wrong about them. I want them to not fall into this because they’re our hope, they’re the future of our country, so I very deeply, profoundly wanna be wrong. I don’t want their social-media data to empower the opposite movement that ends up being more powerful because negative emotions are more powerful. I just wanna be wrong. I so wanna be telling you bullshit right now.

So far it’s been right, but that doesn’t mean it will continue to be. So please let me be wrong.

Platforms seem trapped in this fundamental tension, and I’m just not sure how they break out of that.

My feeling is that if the theory is correct that we got into this by trying to be socialist and libertarian at the same time, and getting the worst of both worlds, then we have to choose. You either have to say, “Okay, Facebook is not going to be a business anymore. We said we wanted to create this thing to connect people, but we’re actually making the world worse, so we’re not gonna allow people to advertise on it; we’re not gonna allow anybody to have any influence on your feed but you. This is all about you. We’re gonna turn it into a nonprofit; we’re gonna give it to each country; it’ll be nationalized. We’ll do some final stock things so all the people who contributed to it will be rich beyond their dreams. But then after that it’s done; it’s not a business. We’ll buy back everybody’s stock and it’s done. It’s over. That’s it.”

[Blogger note: this choice between socialism and libertarianism is a highly interesting and crucial question, but I don’t think there’s one answer. Facebook strikes me as a dysfunctional idea from the beginning. Social interaction doesn’t scale, data networks scale. A global gossip network like Facebook makes almost no sense. I suspect FB will be competed down to many different functional social media models rather than one concentrated behemoth. Something like search. or Wikipedia seems rather different in nature. Google Search looks more and more like a public good, which means it is likely to become a regulated public utility. It’s not exactly clear how search works as a public utility, but I think the political imperative is there.]

That’s one option. So it just turns into a socialist enterprise; we let it be nationalized and it’s gone. The other option is to monetize it. And that’s the one that I’m personally more interested in. And what that would look like is, we’d ask those who can afford to — which would be a lot of people in the world, certainly most people in the West — to start paying for it. And then we’d also pay people who provide data into it that’s exceptionally valuable to the network, and it would become a source of economic growth. And we would outlaw advertising on it. There would no longer be third parties paying to influence you.

Because as long as you have advertising, you have this perverse incentive to make it manipulative. You can’t have a behavior-modification machine with advertisers and have anything ethical; it’s not possible. You could get away with it barely with television because television wasn’t as effective at modifying people. But this, there’s no ethical way to have advertising.

So you’d ban advertising, and you’d start paying people, a subset of people; a minority of people would start earning their living because they just do stuff that other people love to look at over Facebook or the other social networks, or YouTube for that matter. And then most people would pay into it in the same way that we pay into something like Netflix or HBO Now.

And one of the things I wanna point out is that back at the time when Facebook was founded, the belief was that in the future there wouldn’t be paid people making movies and television because armies of unpaid volunteers organized through our network schemes would make superior content, just like what happened with Wikipedia. But what actually happened is, when people started paying for Netflix, we got what we call Peak TV — things got much better as a result of it being monetized.

So I think if we had a situation where people were paying for something like Facebook, and being paid for it, and advertising was absolutely outlawed, the only customer would be the user, there would be no other customer. If we got into that situation, I think we have at least a chance of achieving Peak Social Media, just like we achieved Peak TV. We might actually see things improve a great deal.

So that’s the solution that I think is better. But we can’t do this combination of libertarian and communist ideology. It just doesn’t work. You have to choose one.

You’ve written this book, Ten Arguments for Deleting Your Social Media Accounts. I don’t want to make you summarize the whole book, but I want to ask what you thought was the most urgent argument, and to explain why.
Okay. By the way, it’s … For Deleting Your Social Media Accounts Right Now.

Right now! So the whole thing is already urgent, so which of these urgent pleas do you believe to be the most pressing?

There’s one that’s a little complicated, which is the last one. Because I have the one about politics, and I have the one about economics. That it’s ruining politics, it’s empowering the most obnoxious people to be the most powerful inherently, and that’s destroying the world. I have the one about economics, how it’s centralizing wealth even while it seems to be democratizing it. I have the one about how it makes you feel sad; I have all these different ones.

But at the end, I have one that’s a spiritual one. The argument is that social media hates your soul. And it suggests that there’s a whole spiritual, religious belief system along with social media like Facebook that I think people don’t like. And it’s also fucking phony and false. It suggests that life is some kind of optimization, like you’re supposed to be struggling to get more followers and friends. Zuckerberg even talked about how the new goal of Facebook would be to give everybody a meaningful life, as if something about Facebook is where the meaning of life is.

It suggests that you’re just a cog in a giant global brain or something like that. The rhetoric from the companies is often about AI, that what they’re really doing — like YouTube’s parent company, Google, says what they really are is building the giant global brain that’ll inherit the earth and they’ll upload you to that brain and then you won’t have to die. It’s very, very religious in the rhetoric. And so it’s turning into this new religion, and it’s a religion that doesn’t care about you. It’s a religion that’s completely lacking in empathy or any kind of personal acknowledgment. And it’s a bad religion. It’s a nerdy, empty, sterile, ugly, useless religion that’s based on false ideas. And I think that of all of the things, that’s the worst thing about it.

I mean, it’s sort of like a cult of personality. It’s like in North Korea or some regime where the religion is your purpose to serve this one guy. And your purpose is to serve this one system, which happens to be controlled by one guy, in the case of Facebook.

It’s not as blunt and out there, but that is the underlying message of it and it’s ugly and bad. I loathe it, and I think a lot of people have that feeling, but they might not have articulated it or gotten it to the surface because it’s just such a weird and new situation.

On the other hand, there’s a rising backlash that may end the platforms before they have the opportunity to take root and produce yet another vicious problem.

I’m in my late 50s now. I have an 11-year-old daughter, and the thing that bothers me so much is that we’re giving them a world that isn’t as good as the world we received. We’re giving them a world in which their hopes for being able to create a decent, happy, reasonably low-stress life, where they can have their own kids, it’s just not as good as what we were given. We have not done well by them.

And then to say that observing our own mistakes means that you’re old and don’t get it is profoundly counterproductive. It’s really just a way of evading our own responsibility. The truth is that we totally have screwed over younger generations. And that’s a bigger story than just the social-media and tech thing, but the social-media and tech thing is a big part of it. We’ve created a scammy society where we concentrate wealth in ways that are petty and not helpful, and we’ve given them a world of far fewer options than we had. There’s nothing I want more than for the younger people to create successful lives and create a world that they love. I mean, that’s what it’s all about. But to say that the path to that is for them to agree with the thing we made for them is just so self-serving and so obnoxiously narcissistic that it makes me wanna throw up.

This interview has been edited and condensed for length and clarity.

Art and Algorithms

 

Excerpt from a review of books in The New Yorker: “Are Liberals on the Wrong Side of History?”

The algorithms of human existence are not like the predictable, repeatable algorithms of a computer, or people would not have a history, and Donald Trump would not be President. In order to erase humanity as a special category—different from animals, on the one hand, and robots, on the other—Harari [author of Sapiens] points to the power of artificial intelligence, and the prospect that it will learn to do everything we can do, but better. Now, that might happen, but it has been predicted for a long time [there’s more to the human than we assume] and the arrival date keeps getting postponed.

The A.I. that Harari fears and admires doesn’t, on inspection, seem quite so smart. He mentions computer-generated haiku, as though they were on a par with those generated by Japanese poets. Even if such poems exist, they can seem plausible only because the computer is programmed to imitate stylistic tics that we have already been instructed to appreciate, something akin to the way the ocean can “create” a Brancusi—making smooth, oblong stones that our previous experience of art has helped us to see as beautiful—rather than to how artists make new styles, which involves breaking the algorithm, not following it.

This argument is relevant not only to the creation of art, but also the appreciation of same. And the appreciation of art is expressed in reviews, aesthetic appeal, and novelty, as well as popularity. Algorithms trigger mostly off various proxies for popularity, such as “likes” or sales. We need human aesthetic judgments to support true artistic creation.

Who Are We and What Matters?

Google? Facebook? These two firms alone control roughly 2/3s of digital media advertising revenues.

That’s power. That’s knowledge.

But knowledge of what?

Mostly of how to program computers and deploy algorithms to sort through, organize, cluster, rank, and order vast quantities of data. In the case of Facebook, Zuckerberg obviously also understood something simple but important about how human beings might enjoy interacting online. That’s not nothing. Actually, it’s a lot. An enormous amount. But it’s not everything — or anything remotely close to what Silicon Valley’s greatest innovators think it is.

When it comes to human beings — what motivates them, how they interact socially, to what end they organize politically — figures like Page and Zuckerberg know very little. Almost nothing, in fact. And that ignorance has enormous consequences for us all.

Tech Dystopia?

Below are excerpts from a fascinating series of articles by The Guardian (with links). The articles address many of the ways that Internet 2.0 network media models such as Google, Facebook, YouTube, Instagram, etc. are transforming, and in many cases undermining, the foundations of a democratic humanistic society. These issues motivate us at tuka to design solutions to the great question of life’s meaning.

Personally, I don’t believe this dystopia will come to pass because humans are quite resilient as a species and eventually our humanist qualities will dominate our biological urges and economic imperatives. We have free will and ultimately, we choose correctly.

Perhaps that is an overly optimistic opinion, but Internet (or Web) 3.0 technology is rewriting the script with applications that reassert human control over the data universe. We will build more humanistic social communities that employ technology, with the emphasis always on the human. We see this now with the growing refusal to surrender to Web 2.0 by tech insiders.

See excerpts and comments below.

“If politics is an expression of our human will, on individual and collective levels, then the attention economy is directly undermining the assumptions that democracy rests on.” If Apple, Facebook, Google, Twitter, Instagram, and Snapchat are gradually chipping away at our ability to control our own minds, could there come a point, I ask, at which democracy no longer functions?

‘Fiction is outperforming reality’: how YouTube’s algorithm distorts truth

Paul Lewis February 2, 2018

There are 1.5 billion YouTube users in the world, which is more than the number of households that own televisions. What they watch is shaped by this algorithm, which skims and ranks billions of videos to identify 20 “up next” clips that are both relevant to a previous video and most likely, statistically speaking, to keep a person hooked on their screen.

Company insiders tell me the algorithm is the single most important engine of YouTube’s growth. In one of the few public explanations of how the formula works – an academic paper that sketches the algorithm’s deep neural networks, crunching a vast pool of data about videos and the people who watch them – YouTube engineers describe it as one of the “largest scale and most sophisticated industrial recommendation systems in existence”.

We see here the power of AI data algorithms to filter content. The Google response has been to “expand the army of human moderators.” That’s a necessary method of reasserting human judgment over the network

The primary focus of the article then turns to politics and the electoral influences of disinformation:

Much has been written about Facebook and Twitter’s impact on politics, but in recent months academics have speculated that YouTube’s algorithms may have been instrumental in fuelling disinformation during the 2016 presidential election. “YouTube is the most overlooked story of 2016,” Zeynep Tufekci, a widely respected sociologist and technology critic, tweeted back in October. “Its search and recommender algorithms are misinformation engines.”

Apparently, the sensationalism surrounding the Trump campaign caused YT’s AI algorithms to push more video feeds favorable to Trump and damaging to Hillary Clinton. One doesn’t need to be a partisan to recognize this was probably true for this particular media channel and its business model that values more views more than anything else.

However, this reality can also be distorted to present a particular conspiracy narrative of its own:

Trump won the electoral college as a result of 80,000 votes spread across three swing states. There were more than 150 million YouTube users in the US. The videos contained in Chaslot’s database of YouTube-recommended election videos were watched, in total, more than 3bn times before the vote in November 2016.

This, unfortunately, is cherry-picking statistical inferences concerning the margin of voting support. What was significant in determining the 2016 election outcome was not 80,000 votes across three states, but a run of popular vote wins in 2,623 of 3,112 counties across the U.S. This 85% share could not be an accident, nor could it be due to the single influence of disinformation, Russian or otherwise. The true difference in the election was not revealed by the popular vote total or the Electoral College vote, but by the geographical distribution of support. One can argue about which is more critical to democratic governance, but this post is about electronic media content, not political analysis.

The next article further addresses how technology is influencing our individual behaviors.

‘Our minds can be hijacked’: the tech insiders who fear a smartphone dystopia

Paul Lewis October 6, 2017

Justin Rosenstein had tweaked his laptop’s operating system to block Reddit, banned himself from Snapchat, which he compares to heroin, and imposed limits on his use of Facebook. But even that wasn’t enough. In August, the 34-year-old tech executive took a more radical step to restrict his use of social media and other addictive technologies.

A decade after he stayed up all night coding a prototype of what was then called an “awesome” button, Rosenstein belongs to a small but growing band of Silicon Valley heretics who complain about the rise of the so-called “attention economy”: an internet shaped around the demands of an advertising economy.

The extent of this addiction is cited by research that shows people touch, swipe or tap their phone 2,617 times a day!

There is growing concern that as well as addicting users, technology is contributing toward so-called “continuous partial attention”, severely limiting people’s ability to focus, and possibly lowering IQ. One recent study showed that the mere presence of smartphones damages cognitive capacity – even when the device is turned off. “Everyone is distracted,” Rosenstein says. “All of the time.”

“The technologies we use have turned into compulsions, if not full-fledged addictions,” Eyal writes. “It’s the impulse to check a message notification. It’s the pull to visit YouTube, Facebook, or Twitter for just a few minutes, only to find yourself still tapping and scrolling an hour later.” None of this is an accident, he writes. It is all “just as their designers intended”.

Tristan Harris, a former Google employee turned vocal critic of the tech industry points out that… “All of us are jacked into this system. All of our minds can be hijacked. Our choices are not as free as we think they are.”

“I don’t know a more urgent problem than this,” Harris says. “It’s changing our democracy, and it’s changing our ability to have the conversations and relationships that we want with each other.” 

Harris believes that tech companies never deliberately set out to make their products addictive. They were responding to the incentives of an advertising economy, experimenting with techniques that might capture people’s attention, even stumbling across highly effective design by accident.

“Smartphones are useful tools,” says Loren Brichter, a product designer. “But they’re addictive. Pull-to-refresh is addictive. Twitter is addictive. These are not good things. When I was working on them, it was not something I was mature enough to think about.”

The two inventors listed on Apple’s patent for “managing notification connections and displaying icon badges” are Justin Santamaria and Chris Marcellino. A few years ago Marcellino, 33, left the Bay Area and is now in the final stages of retraining to be a neurosurgeon. He stresses he is no expert on addiction but says he has picked up enough in his medical training to know that technologies can affect the same neurological pathways as gambling and drug use. “These are the same circuits that make people seek out food, comfort, heat, sex,” he says.

“The people who run Facebook and Google are good people, whose well-intentioned strategies have led to horrific unintended consequences,” he says. “The problem is that there is nothing the companies can do to address the harm unless they abandon their current advertising models.

But how can Google and Facebook be forced to abandon the business models that have transformed them into two of the most profitable companies on the planet?

This is exactly the problem – they really can’t. Newer technology, such as distributed social networks tracked by blockchain technology, must be deployed to disrupt the dysfunctional existing technology. New business models will be designed to support this disruption. Human behavioral instincts are crucial to successful new designs that make us more human, rather than less.

James Williams does not believe talk of dystopia is far-fetched. …He says his epiphany came a few years ago when he noticed he was surrounded by technology that was inhibiting him from concentrating on the things he wanted to focus on. “It was that kind of individual, existential realization: what’s going on?” he says. “Isn’t technology supposed to be doing the complete opposite of this?”

The question we ask at tuka is: “What do people really want from technology and social interaction? Distraction or meaning? And how do they find meaning?” Our answer is self-expression through creativity, sharing it, and connecting with communities.

Williams and Harris left Google around the same time and co-founded an advocacy group, Time Well Spent, that seeks to build public momentum for a change in the way big tech companies think about design. 

“Eighty-seven percent of people wake up and go to sleep with their smartphones,” he says. The entire world now has a new prism through which to understand politics, and Williams worries the consequences are profound.

The same forces that led tech firms to hook users with design tricks, he says, also encourage those companies to depict the world in a way that makes for compulsive, irresistible viewing. “The attention economy incentivizes the design of technologies that grab our attention,” he says. “In so doing, it privileges our impulses over our intentions.”

That means privileging what is sensational over what is nuanced, appealing to emotion, anger, and outrage. The news media is increasingly working in service to tech companies, Williams adds, and must play by the rules of the attention economy to “sensationalize, bait and entertain in order to survive”.

In the wake of Donald Trump’s stunning electoral victory, many were quick to question the role of so-called “fake news” on Facebook, Russian-created Twitter bots or the data-centric targeting efforts that companies such as Cambridge Analytica used to sway voters. But Williams sees those factors as symptoms of a deeper problem.

It is not just shady or bad actors who were exploiting the internet to change public opinion. The attention economy itself is set up to promote a phenomenon like Trump, who is masterly at grabbing and retaining the attention of supporters and critics alike, often by exploiting or creating outrage.

Orwellian-style coercion is less of a threat to democracy than the more subtle power of psychological manipulation, and “man’s almost infinite appetite for distractions”.

“The dynamics of the attention economy are structurally set up to undermine the human will,” Williams says. “If politics is an expression of our human will, on individual and collective levels, then the attention economy is directly undermining the assumptions that democracy rests on.” If Apple, Facebook, Google, Twitter, Instagram, and Snapchat are gradually chipping away at our ability to control our own minds, could there come a point, I ask, at which democracy no longer functions?

Our politics will survive and democracy is only one form of governance. The bigger question is how does human civilization survive if our behavior becomes self-destructive and meaningless?

Competition in the Digital Age

How to tame the tech titans

The Economist, Jan. 18, 2018

The dominance of Google, Facebook and Amazon is bad for consumers and competition [And suppliers.]

NOT long ago, being the boss of a big Western tech firm was a dream job. As the billions rolled in, so did the plaudits: Google, Facebook, Amazon, and others were making the world a better place. Today these companies are accused of being BAADD—big, anti-competitive, addictive and destructive to democracy. Regulators fine them, politicians grill them and one-time backers warn of their power to cause harm.

Much of this techlash is misguided. The presumption that big businesses must necessarily be wicked is plain wrong. Apple is to be admired as the world’s most valuable listed company for the simple reason that it makes things people want to buy, even while facing fierce competition. Many online services would be worse if their providers were smaller. Evidence for the link between smartphones and unhappiness is weak. Fake news is not only an online phenomenon.

But big tech platforms, particularly Facebook, Google, and Amazon, do indeed raise a worry about fair competition. That is partly because they often benefit from legal exemptions. Unlike publishers, Facebook and Google are rarely held responsible for what users do on them; and for years most American buyers on Amazon did not pay sales tax. Nor do the titans simply compete in a market. Increasingly, they are the market itself, providing the infrastructure (or “platforms”) for much of the digital economy. Many of their services appear to be free, but users “pay” for them by giving away their data. Powerful though they already are, their huge stockmarket valuations suggest that investors are counting on them to double or even triple in size in the next decade.

There is thus a justified fear that the tech titans will use their power to protect and extend their dominance, to the detriment of consumers (see article). The tricky task for policymakers is to restrain them without unduly stifling innovation. [Blogger note: Mostly they are interested in continuing to exploit their monopsony power over suppliers – and customers are valuable suppliers of free data.]

The platforms have become so dominant because they benefit from “network effects”. Size begets size: the more sellers Amazon, say, can attract, the more buyers will shop there, which attracts more sellers, and so on. By some estimates, Amazon captures over 40% of online shopping in America. With more than 2bn monthly users, Facebook holds sway over the media industry. Firms cannot do without Google, which in some countries processes more than 90% of web searches. Facebook and Google control two-thirds of America’s online ad revenues.

America’s trustbusters have given tech giants the benefit of the doubt. They look for consumer harm, which is hard to establish when prices are falling and services are “free”. The firms themselves stress that a giant-killing startup is just a click away and that they could be toppled by a new technology, such as the blockchain. Before Google and Facebook, Alta Vista and MySpace were the bee’s knees. Who remembers them?

However, the barriers to entry are rising. Facebook not only owns the world’s largest pool of personal data, but also its biggest “social graph”—the list of its members and how they are connected. Amazon has more pricing information than any other firm. Voice assistants, such as Amazon’s Alexa and Google’s Assistant, will give them even more control over how people experience the internet. China’s tech firms have the heft to compete but are not about to get unfettered access to Western consumers.

If this trend runs its course, consumers will suffer as the tech industry becomes less vibrant. Less money will go into startups, most good ideas will be bought up by the titans and, one way or another, the profits will be captured by the giants.

The early signs are already visible. The European Commission has accused Google of using control of Android, its mobile operating system, to give its own apps a leg up. Facebook keeps buying firms which could one day lure users away: first Instagram, then WhatsApp and most recently tbh, an app that lets teenagers send each other compliments anonymously. Although Amazon is still increasing competition in aggregate, as industries from groceries to television can attest, it can also spot rivals and squeeze them from the market.

The rivalry remedy

What to do? In the past, societies have tackled monopolies either by breaking them up, as with Standard Oil in 1911, or by regulating them as a public utility, as with AT&T in 1913. Today both those approaches have big drawbacks. The traditional tools of utilities regulation, such as price controls and profit caps, are hard to apply since most products are free and would come at a high price in foregone investment and innovation. Likewise, a full-scale break-up would cripple the platforms’ economies of scale, worsening the service they offer consumers. And even then, in all likelihood one of the Googlettes or Facebabies would eventually sweep all before it as the inexorable logic of network effects reasserted itself.

The lack of a simple solution deprives politicians of easy slogans but does not leave trustbusters impotent. Two broad changes of thinking would go a long way towards sensibly taming the titans. The first is to make better use of existing competition law. Trustbusters should scrutinize mergers to gauge whether a deal is likely to neutralize a potential long-term threat, even if the target is small at the time. Such scrutiny might have prevented Facebook’s acquisition of Instagram and Google’s of Waze, which makes navigation software. To ensure that the platforms do not favor their own products, oversight groups could be set up to deliberate on complaints from rivals—a bit like the independent “technical committee” created by the antitrust case against Microsoft in 2001. Immunity to content liability must go, too.

Second, trustbusters need to think afresh about how tech markets work. A central insight, one increasingly discussed among economists and regulators, is that personal data are the currency in which customers actually buy services. [Yes.] Through that prism, the tech titans receive valuable information—on their users’ behavior, friends and purchasing habits—in return for their products. Just as America drew up sophisticated rules about intellectual property in the 19th century, so it needs a new set of laws to govern the ownership and exchange of data, with the aim of giving solid rights to individuals. [Exactly. Facebook is NOT free.]

In essence, this means giving people more control over their information. If a user so desires, key data should be made available in real time to other firms—as banks in Europe are now required to do with customers’ account information. Regulators could oblige platform firms to make anonymised bulk data available to competitors, in return for a fee, a bit like the compulsory licensing of a patent. Such data-sharing requirements could be calibrated to firms’ size: the bigger platforms are, the more they have to share. These mechanisms would turn data from something titans hoard, to suppress competition, into something users share, to foster innovation.

None of this will be simple, but it would tame the titans without wrecking the gains they have brought. Users would find it easier to switch between services. Upstart competitors would have access to some of the data that larger firms hold and thus be better equipped to grow to maturity without being gobbled up. And shareholders could no longer assume monopoly profits for decades to come.

Welcome to Web 3.0