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.
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.
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.
Continued massive growth by the giant high-tech companies in Silicon Valley brings with it commensurate demand for trained software engineers (as well as housing shortages and high prices, traffic jams, and other problems). The U.S. doesn’t produce enough STEM (Science, Technology, Engineering and Math) trained people, so the tech companies are forced to cast a wider net by hiring foreigners, using the mechanism of H-1B visas. Many of these H-1B hires are from India, and of those many are provided by well-compensated outsourcing firms such as Infosys, Tech Mahindra, and WiPro.
The situation in 2018 is similar to the one in 2017, with the important difference that now President Trump is now involved. He does things in strange and wonderful ways, and the America First plank in his election platform may bode ill to the H-1B visa program. Plus, he is at odds with the leaders of the giant high-tech companies. So anything can happen.
While the H-1B visa program may enable well-educated (especially in technology) individuals to enter the U.S. and earn considerably more than they could in their native countries, some of them are dissatisfied with the layers of bureaucracy that prevent them from advancing. However, there are two outstanding exceptions to this (both natives of India), namely Microsoft CEO Satya Nadella (who joined Microsoft in 1992 and became its CEO in 2014) and Google Inc. CEO Sundar Pichai (who joined Google in 2004 and became its CEO in 2015 when its now-parent Alphabet Inc. was created).
The good news today is that Amazon will NOT locate its second headquarters (with up to 50,000 people) in the Bay area. So San Jose mayor Sam Liccardo will get his wish. This is a welcome change from past practices by Silicon Valley cities, when city councils have welcomed large, tax-paying companies despite the downsides of their new presence.
Fortunately for those not interested in lawsuits, and want some things to do now to avoid the hassle of having officials search their devices at airports, there are some measures that may be helpful. For some months passengers from eight majority-Muslim countries had to put their laptop computers and tablets in their checked luggage, so presumably anyone could do this, and include their cellphones as well. (Yes, we realize that for many people, especially millenials, their cellphones are their Gods. But checked luggage rarely goes missing these days, so this may be the lesser of evils.)
Years ago (well before the Internet or Apple watches) we read a story about a black native of Africa asking why a white explorer kept looking at his watch, and being told that it must be his God. Fast forward to the electronic age, when billions of people have electronic gadgets like cellphones that they treat with similar reverence, because they give those people helpful capabilities that they never had in the past. But that same technology can also be hurtful. If you replace “Lord” by “Technology” (which billions of people today seem to be doing), the phrase “The Lord giveth and the Lord taketh away” sums up the benefits and dis-benefits pretty well. A couple of recent examples of the latter shows why.
Don’t Google and Amazon Read Businessweek? At least Google has the excuse that they were born and grew up in Silicon Valley and have always lived here. So it may be instinctive for them to keep on wanting to out-Silicon-Valley Silicon Valley. As for Amazon, Jeff Bezos’ historically bare bones operating philosophy has apparently changed if he now wants to pay big bucks for the facilities and staff in Silicon Valley.
Even worse, no other than the CEO of Silicon Valley Leadership Group who was just given accolades by the San Jose Mercury News may be one of the villains. Although Carl Guardino wants to “exorcise the twin demons of housing shortages and traffic jams” he appears to be focusing only on the traffic jams part. (This, in turn, may be due to the fact that he commutes to work by bike 17 miles each way, from tony Monte Sereno to the airport. He may actually get to work faster that way than by car, but Google Maps shows one hour and twenty minutes, though there are fortunately two alternatives that are trails. The third is via an expressway, which is not cyclist-friendly.) He apparently expects somebody else to deal with the housing shortage, a poignant example of suboptimization. (Interestingly, the definer of suboptimization is a San Joe State professor, who no doubt has lots of local examples to cite.) Apparently HE thinks that having fast transportation allows people to live farther away, where housing is affordable. WE think that the proposed “Google transit village” (that puts 20,000 Google employees in offices adjacent to Diridon Station) will be a nightmare because it puts too many eggs in one basket. And if you want to know what Silicon Valley residents REALLY think, have a look at the Comments accompanying the article about Carl Guardino.
Another consideration is that past experience regarding the preferences of high-tech company employees is that managers have families and prefer to live toward the San Jose end so they can have grass to play on, whereas single guys writing code prefer to live in San Francisco so they can party. Where will the party scene shift to? Will hungover software engineers want to commute from San Francisco to Diridon Station on BART? And can their bosses afford to live in closer proximity to Diridon Station? Houses in nearby Sunnyvale are selling for nearly $800,000 over their asking prices.
What about Amazon? While those with vested interests—politicians, city planners, tax assessors, etc.—are positive, knowledgeable local residents (and newspaper columnists) are not. Maybe Amazon’s own planners and cost accountants will horrify Jeff Bezos so much that he will choose some other city on the Businessweek pictogram who will appreciate him more and charge him less. Or maybe he will get creative with a twist like the giant factory towns in China, which have dormitories and apartments and stores, and propose to build giant apartment buildings to overcome the housing and traffic challenges.
Sears Roebuck was a hot stock when it held its IPO in 1906, and ninety years later its shares had grown 434,552 percent. But by 1973, when it opened the Sears Tower (at that time the tallest building in the world), it apparently had lost all or most of its entrepreneurial instrincts, and it let Amazon get started in 1994 and overtake it, apparently without any counter-offensive.
But Sears isn’t the only retailer who missed the resolutionary changes in retailing. Most department store chains are suffering from changes in people’s tastes and how and where they shop. And many shopping malls are shadows of their former selves. It will be very interesting to see if Amazon can innovate in the grocery category.