It had to happen. As the tech giants continue to grow, they start to overlap each other, simply because there are just not that many giant markets that they can pursue. In this case, it is Facebook invading Amazon’s e-commerce territory with its new “Shops” e-commerce service. It is useful to remember that a big chunk of Amazon’s revenue comes from third-party sellers. These sellers are mostly small, and they can now set up their own e-commerce on Facebook or Instagram.
Facebook and other tech giants have been fortunate that they had been essentially unregulated … until now. On April 11 we received an email titled “[Action Required] Important updates on Google Analytics Data Retention and the General Data Protection Regulation (GDPR)” from ‘Google Analytics’ email@example.com that presumably was received by billions of people with gmail email addresses or other Google associations. It alerts all of us of this data protection law affecting users based in the EU (European Union) that will be effective May 25, 2018.
We suspect that the vast majority of Internet-connected individuals had no clue that such a law was in the works, though they could hardly have missed the fact that Mark Zuckerberg was testifying in Washington, DC. Likely this mass email was intentionally timed to coincide with his testifying.
Do First Ask Forgiveness Later
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Though some other observers have scorned the technology naivete of some of the legislators, we were generally impressed with the thoughtful questions that in general dug into the key issues—most notably privacy—that had forced Mark Zuckerberg to testify.
Doubtless the large majority of Facebook users never read Facebook’s Terms of Service (TOS), just like the user agreements of other memberships they pursue. When Technology Bloopers debuted, we carefully read the TOS and included some commentary under the “Social Networks” subheading of our “Villains” heading. We pointed out two notions that have turned out to be hugely important in the current dust-up: “Users of these social networks have accepted the Terms of Service (TOS) for them, giving them permission to do many things that, upon reflection, those users might actually not want done.” and “But it is hugely one-sided in that it talks about all the things that Facebook can do and not much about the things the Facebook customer can do. And it is hugely open-ended in that it cites examples of things that Facebook can do today or might do in the future, but places no limits on them. “
The tech giants are so powerful that they feel they can get away with taking actions without asking permission, then apologizing later. Again, we had reminded in our “Villains” subheading the famous quote from Lord Acton: “Absolute power corrupts absolutely”.
We admit to being generally anti- to social networks. In our view they are an unnecessary sugar coating of basic functionality already provided in a range of websites. Our views were included when we originally uploaded our TechnologyBloopers website in August 2014, which included our critical analysis of Facebook’s “Terms of Service”.
Among the tech giants Facebook has recently has become the poster child for taking the notion of “if something is not forbidden by law, then it is allowed”, replacing Google (which did things like copying millions of pages of books in the name of making knowledge available, but violating the copyrights of the authors). This behavior earned a “command performance” for Mark Zuckerberg with congress as the audience.
Question: When you’ve joined the $100+ billion market cap club, what do you do next? Answer: You start invading the other members’ territories (e.g., Amazon is now chasing the digital advertising business that Facebook and Google make billions of dollars from) AND you hire a bunch of pricey lawyers to defend you against antitrust suits.
This club is pretty exclusive today, with American members including mainly Alphabet/Google, Amazon, Apple, Facebook, IBM, Intel, Microsoft, and Netflix. They are so big that to grow significantly they have to look for other big markets (like cloud computing or self-driving cars or Hollywood-type movies) to enter, and most of those big markets are already occupied by other club members or non-member already-large specialists. What are the bloopers here? A classical one would be monopoly/oligopoly pricing and/or restraint of trade. But perhaps more important might be the opportunities lost by a failure to allocate capital to creating useful NEW-AND-DIFFERENT products and services.
Mark Twain’s 1897 quote had it right: “Truth is stranger than fiction, but it is because Fiction is obliged to stick to possibilities; Truth isn’t.” One possible Truth in the current fracas involving Russians, Trump’s campaign team for the 2016 presidential election, and social network companies including Facebook, Google, and Twitter is that this is an early example of wars that are fought by hackers and the Internet rather than soldiers and guns. Numerous semi-fiction books could be written or movies created about this craziness. One possible plot is that the Russians knew how unusual (AKA weird) Donald Trump is, and preferred him to Hillary Clinton as president because they could exploit that unusualness (AKA weirdness). A bunch of congresspeople are calling for regulation of these giant Internet-based companies. So are the media, who are far more regulated than Facebook, Google, and Twitter. These are crazy times, and the Russians and other enemy nations must be enjoying all the gyrations that the US is going through.
Facebook and a handful of other social media are so entrenched that few people think about life before them. But the Web was conceived 15 years before Facebooks’s founding in 2004. Facebook put a pretty face on the Web, and billions of people have flocked to it. And Google Search, YouTube, and a handful of other giants –fueled by tons of advertising revenues—exercise a lot of control over what people can see and do, so much so that there is growing sentiment about breaking up these monopolistic organizations. And delivering fake news or vicious propaganda from the likes of ISIS (ironically ISIS can even get PAID by YouTube while it disseminates its messages of hatred) adds further pressure for this breakup.
It will take more time, but help may be on the way from the original creator of the Web, Tim Berners-Lee. He is working towards a “Better Web” where users’ control their own (private) data. One group that should benefit from greater control of their data is musicians. The title of Jonathan Taplin’s new book, “Move Fast and Break Things”, may even have caused Facebook to foresightedly replace their eponymous former motto with “Move Fast With Stable Infra(structure)”.
We at Technology Bloopers are not big fans of President Trump, but his administration’s putting pressure on tech companies’ hiring software engineers from India and China to replace Americans does seem to be consonant with his pre-election promises.
But apparently it is even worse than that. We heard a couple of days ago about one local company that not only hired a bunch of Indian H1B visa-holders, fired their American staff, and replaced them with these imported folks … after they were trained by the Americans. And this noxious practice has apparently been going on for some time, according to the Stateline folks at The Pew Charitable Trusts.
Three months of coder school is not much training compared with that of the better-trained—often in American universities—and more-experienced visa-holders. But why are these American universities welcoming these foreign students? It’s because those students come bearing big funds for their education. (At state universities, it is simply that the international students must pay the same (higher) prices as out-of-state American students.) We have heard that among some of these students it is said that PhD stands for “Parents have Dough”. Interestingly, those international students are more prone to cheat on their exams. Hmmm … does that mean that their future code will be less trustworthy than that of Americans?
We wonder why the big Silicon Valley tech companies have not done a better job on their own of training software engineers. Couldn’t they be hiring “junior” software engineers from the coder schools and boosting their capabilities with on-the-job training. We suspect one reason is that it is more expensive to do that than to hire foreign help. And more time-consuming. And another reason may be that they didn’t do a good job of forecasting their growth and concomitant demand for those software engineers. Maybe the current visa flap will motivate them.
But it may not be the fault of these companies. Americans may too lazy, or too afraid to be “uncool”, to study STEM (Science/Technology/Engineering/Mathematics) courses so there is not enough local talent to fill the needs of Silicon Valley. Graduates with strong STEM knowledge are polar opposites to “art history majors” , a term used derogatorily to connote enjoyable-but-low-paying jobs.
“The Lord Giveth and the Lord Taketh Away” is a truly flexible and useful concept. We can replace “Lord” by such notions as “Technology” or “Internet” or “Mobile Devices” or a whole host of other products and services. And those products and services can be used to teach us, to inform us, to entertain us, etc. How valuable they are depends on the objectives of the individual or group in question. We’d guess that a large fraction of the folks who read the New York Times either work pretty hard or respect others who do work pretty hard. On the other hand those who spend a lot of time looking at or posting to Tumblr probably are at the other end of the spectrum, as Tumblr itself serves up such suggestions as “5 ways to waste the rest of the day” (by the way, you can find lots of OTHER folks using that phrase when you surf) and counsels its members that “work can wait”, presumably while you read or write posts on Tumblr.
To put this in perspective we took a look at how Americans spent their day in 2014, thanks to some detailed data from the Bureau of Labor Statistics (BLS). Of the 24.00 hours in a day, we spend 10.75 hours taking care of basic needs (sleeping, other personal care, and eating and drinking), 3.59 hours working or doing work-related activities, a meager 0.42 hours being educated (a low average because the majority of Americans are not enrolled in educational institutions), a whopping 5.30 hours on leisure and sports (which includes 2.82 hours watching television), and a modest 0.14 hours communicating (telephone, email, and snailmail).
But even the most casual observer would likely object to the low communicating figure from the BLS because everywhere you look people are peering into their smartphones. One study found that smartphone users spend two hours each day using those devices. And what are they doing with those phones? It depends on whose statistics you believe, but it is interesting to note that it’s not all entertainment. And it is even more interesting to realize that a smartphone enables its user to seamlessly shift between work-related and personal activities, so they aren’t all just wasting the rest of the day a la Tumblr. Whew, the American economy may not be in danger!
But though most people can recover from having their credit card data compromised (or perhaps weren’t personally affected by it), they might not recover so well from having their marriage destroyed, so perhaps the most poignant of recent hacks was the one of the Ashley Madison extramarital affair website. Most recently Ashley Madison users filed class action lawsuits in Canada and the US, which will almost certainly destroy the company and at a minimum disgrace its parent company Avid Life Media Ironically, the hackers had originally not tried to destroy the whole thing but to force more ethical behavior on it, and when the company stonewalled the hackers carried out their threat of disclosure. Another example of hubris … which has at a minimum forced the CEO of Avid Life Media to resign.