Don't Be Evil

by Rana Foroohar

  Given all this, it’s no wonder that Big Tech will do whatever it takes to protect the loopholes that enable it to get around any sorts of restrictions on the monetization of user data and content—including using its megaphone to kill the Stop Online Piracy Act (SOPA), a bill that would limit access to sites that hosted or facilitated pirated content. A day after the bill was introduced, Google put what looked like a big black box across its logo, with the words TELL CONGRESS: DON’T CENSOR THE WEB. The message let people click straight through to a blank email already addressed to their congressperson, which resulted in the crashing of congressional email servers. The bill was pulled within three days.29

  A Tide Turn?

  Google, Facebook, and others tried to use some of the same tactics in Europe in 2019, in advance of an EU decision around new copyright rules (the European Copyright Directive) that will now force platform companies to take more responsibility for removing unauthorized copyrighted content, and/or pay publishers and other content creators for its usage (albeit with a relatively small fee).30 The directive passed the European Parliament by a wide margin, despite a smear campaign by the Big Tech firms, in which they tried to make it seem as though the new laws would penalize small companies who couldn’t comply with the rules effectively, and/or impinge on freedom of speech.31 A top German newspaper, the Frankfurter Allgemeine Zeitung, published an undercover exposé showing that Google money was linked to YouTube “activists” who had organized to protest the laws. It turns out that far from being part of a grassroots movement, they were being paid by Google to protest32—not unlike the way in which poor people in countries like, say, Iran, are paid by the government to show up and decry this or that idea that might be unfavorable to the regime.

  Meanwhile, actual content creators were happy to have the European government legitimize the idea that their work should be properly protected and paid for by the people using it. “[Platforms now] have an incentive not to upload content that violates a copyright, and they have an even greater incentive to sign licensing deals with the owner of that content,” Thomas Rabe, the chief executive of the German media group Bertelsmann, told the Financial Times. “We have to put an end to this for-free culture on the Internet.”33

  The fact that the EU has taken some steps toward protecting content creators is hopeful. But it’s certainly not the end of the story. Spain, for example, tried to enact similar measures unilaterally in 2014, and Google simply “turned off its news service there,” according to the editorial board of the Financial Times. In Germany, it has opted to “carry news only from sites that agree to have content shown for free.”34 But the success of the platforms at the expense of content creators has come at a cost. Ironically, Facebook and Google both recently launched services to try to support local news, because after years of struggling in the wake of their business model being destroyed by the platform firms, there simply aren’t that many local news outlets left. That, in turn, begins to affect the platform companies themselves—if there’s nobody left to create content, then what’s left to monetize?

  The disruption has taken a huge toll on news media and publishing, which have been most directly affected by the rise of the Big Tech industry. Newspapers have essentially been in decline since the mid-1990s, when the commercial Internet took off.35 Today, over 62 percent of the U.S. population gets news from some form of social media, with Facebook being the dominant source, according to the Columbia Journalism Review.

  But looking at the patent issue makes it clear that there is a price to be paid for the “information wants to be free” approach in other industries as well—including the technology business itself. While the complexity of global supply chains and investments makes it tough to show clear causality between patent protection and innovation in the United States, the trend lines do not look good. According to one study, the shifts in patent regulation have cost the U.S. economy $1 trillion. Venture capital investment in biotech has been down in recent years, in part because it’s tougher to patent certain kinds of innovation. Anecdotally, I’ve spoken to many investors who have said they are considering moving money away from the United States and into Europe and Asia because of this. Those are, of course, highly skilled jobs that the country should be looking to keep.36

  Cartels and Collusion

  Large technology companies use cartel-like methods to protect what is perhaps their most valuable resource: their employees. Consider the agreements among a number of Big Tech firms not to poach one another’s employees. When companies attempt to lower their potential labor costs by agreeing, via a backroom handshake, to make it tougher for workers to leverage one offer against another, that behavior is typically considered collusion. When it happens in Silicon Valley, however, it typically also means that one or both companies are trying to prevent their top talent from absconding to a competitor—and taking their proprietary information, ideas, and secrets along with them.

  In 2011, court documents revealed that in 2007, after Steve Jobs called Google to complain that a recruiter was trying to hire one of his people, Schmidt wrote an email to HR saying, “I believe we have a policy of no recruiting from Apple….Can you get this stopped and let me know why this is happening? I will need to send a response back to Apple quickly.”37

  While at Google, Schmidt instituted a “Do Not Call” list of companies that could not be tapped for talent, something that was legally dicey, since it basically undermined the ability of individuals to look for work. And clearly, he knew it: According to one court filing, when Schmidt was asked in an email by Google’s HR director about the no-poaching agreements with competitors, Schmidt responded that he preferred it be shared “verbally, since I don’t want to create a paper trail over which we can be sued later.”38 As one key staffer for a senior Democratic senator later said to me, “Those guys should have gone to f—ing jail for that.” Instead, Google, Apple, and two other firms implicated in the scandal—Adobe and Intel—agreed to pay $415 million in damages in an out-of-court settlement.

  As Peter Harter put it when I interviewed him about his experience with the Googlers, “These companies get so powerful and have so much money and access to politicians and employee talent, that the usual rules just don’t apply.”39

  * * *

  —

  IF THE LARGEST players can’t steal or poach the IP they are after—they simply shell out a few million and buy it. Google, for example, has purchased more than 120 companies in the past decade. (Facebook and Amazon have purchased 79 and 89, respectively.) Such purchases, however, are just as likely to be defensive ploys as offensive ones. Facebook’s 2014 acquisition of Oculus, an up-and-coming virtual reality start-up, for example, was much less about getting into that business than killing the upstart’s promising operating system, which might have eventually competed with their own.40 And its acquisitions of Snapchat, Instagram, and WhatsApp were about making sure that no one else would develop a new social network that Facebook followers might jump to. Amazon’s Alexa is based on the technology of a start-up that got a mere $5.6 million from the company, who then copied the voice assistant pretty much wholesale.41 Google, of course, is the biggest buyer of all, with more than two hundred acquisitions made during its history.42

  Given the rapaciousness of the giants, and the fact that Washington has done little to nothing to stop such mergers (since they aren’t perceived to be in conflict with the Bork-era “consumer welfare” concept of lowering prices, a topic we’ll examine in chapter 9), it’s no wonder that there are now innovation black holes around anything that the platform technology companies are (or might be) interested in, something known in the business as “kill zones.”43 As several venture capitalists and technology executives have told me, nobody wants to start a company in an area that they know Google or Facebook or Amazon might be entering, unless it’s to create a kind of “talent farm” that might eventually be bought up by the giants simply
for human capital. This isn’t innovation building or creating new jobs. It’s about making existing giants richer.

  And richer they have become, to the tune of double-digit margins, year after year, with vastly fewer input costs than most other businesses. Apple, in less than four decades, became the world’s first trillion-dollar firm, with others following closely behind. Google went public on August 19, 2004, with an $85 floor. By the end of the day it was around $100, and 900 Google millionaires had been created. By day two, it was $108. And by February 2005, it was at $210. It was all up from here for Google, and no wonder. As the IPO and the financial documents revealed during that time would show, Google wasn’t just a tech company. Page 80 of the prospectus laid it out: “We began as a technology company and have evolved into a software, technology, Internet, advertising and media company, all rolled into one.”44 AdSense was a money-printing machine. Yahoo, seeing the writing on the wall, dropped its patent lawsuit in exchange for shares in Google. Big Tech had come of age. In the years to come, Big Tech would grow even bigger and more powerful than anyone could imagine, thanks to the new science of persuasive technology known as “captology.”

  CHAPTER 6

  A Slot Machine in Your Pocket

  At the beginning of this book, you read about how many of my anxieties about Big Tech came home to me—quite literally—in early 2017, when I opened my credit card bill and noticed quite a number of small charges from Apple—$1.99 here, $5.50 there, and so on. At first I figured I must have downloaded a song or a movie and forgotten about it. But then I noticed that there were three or four a day, and sometimes as many as ten or fifteen, for many of the days in the month, so many that if I’d somehow incurred all the charges without remembering any of them, I would have taken it as a sign of a neurological problem. I checked the previous month’s bill and saw a flurry of small charges there, too, though there were fewer, so I hadn’t noticed. I checked online to see the current bill; the most recent charge had been made that very day. I pulled out a calculator to add them all up, and I was stunned to see that the total came to a whopping $947.73.

  What? My first thought, of course, was that I’d been hacked. Some enterprising computer nerd sitting in a basement somewhere (or, alternatively, a ring of nefarious cyber-criminals with ties to Moscow) had broken into my account, and was draining it in tiny increments. But as you read in the author’s note, it soon occurred to me that I was not the only one with access to my Apple account. I’d given my then ten-year-old, Alex, the password—along with strict instructions that he always check with me before he used it. Perhaps he knew something about this?

  I went downstairs and found him in his usual position on the living room couch, iPhone in hand.

  I sat down beside him.

  “Alex,” I began, gently, “have you been using my Apple account?”

  Engrossed in his game, he did not look up.

  “Alex, look at me.”

  He glanced up, the screen still flashing, phone emitting its cheery noises.

  “Turn that off for a second, would you?”

  With a look of mild irritation, he set the phone down beside him.

  “There are a lot of charges here,” I began. I started reading them off from the bill.

  Alex shook his head. “Not me.” I had the sense that his mind was drifting over to the iPhone, still beeping beside him.

  I looked at the dates and times on the bill again, and this time I noticed a pattern—all of them were made on weekday afternoons, after Alex got home from school, occasionally unattended.

  “Now, Alex, are you sure you had nothing to do with this?” I pressed.

  “Wait—how much were they again?” he asked.

  “A few dollars, most of them.” I let that sink in. “All of them from the App Store.”

  He suddenly went pale. “Oh,” he said. “That.”

  Then the story tumbled out. It had all started with a Google search. Alex had been trying to find the “funnest” soccer game on the Web, and FIFA Mobile had appeared at the very top of the list (in the paid ad portion, not that Alex realized that). Alex then went to the Apple App Store to download the game for free. FIFA Mobile was great! Really fun and exciting. But he soon discovered that he would do better at the game if he had stronger players. But alas, the real stars—like his heroes Ronaldo and Messi—were not always to be had for free. They could, however, be bought with “FIFA cash”—purchased in real dollars, of course. Then he discovered something even cooler—for more money, one could obtain packs that allowed you to arm your players and your team with even more tricks and skills—something known in the industry as “loot boxes.”1

  Sure enough, with better players, winning was easy. Alex won more games, laid on more FIFA cash, and then won more still; in $1.99 by $1.99 increments, his team ascended through the ranks as if it was the real Real Madrid. FIFA Mobile recorded Alex’s scores, his stats, and where he stood in the rankings—not just against local teams, but globally. It was Alex against the world, and he was on a winning streak. The trouble was, the better he did, the tougher the competition—requiring better players, with still more skills and tricks, if he wanted to stay ahead. And, if he ever tired of the game, perhaps indulging the rare urge to turn to other things, like his homework, his iPhone would flash with a reminder of a big game coming up. It was all tremendous fun, thrilling really, for a soccer-mad ten-year-old. But even he could now see that things had gotten somewhat out of control.

  When he finished telling me the story, Alex hung his head and shrugged. “I couldn’t help it!” he told me glumly. “I—I don’t know, the game just kind of took over.” He described a kind of brain fog, a trance, in which he simply lost himself. I felt bad, but I was unwilling to let him entirely off the hook. So I split the cost with him, and arranged for him to pay off his half with allowance money, extra chores, and whatever he could make on his lemonade stand.

  Suffice it to say, FIFA Mobile has since been removed from his phone.

  “Persuasive” Technology

  As a mother, I was horrified by this whole incident. As a business journalist, I was fascinated. How, I wondered, was this game designed to be so utterly irresistible as to turn my normally well-behaved and well-adjusted son into a veritable FIFA Mobile junkie? Was it the unique talent of one brilliant game maker? Dumb luck? Or was it something else entirely?

  It was indeed something else—a very big and lucrative something. A little digging revealed that the developers who worked on FIFA Mobile did not dream up the key elements that hooked Alex. The mechanics that informed their work—a field, I would soon learn, known as “captology”—were developed years before, at the Stanford Persuasive Technology Lab. Like many other products of the digital revolution, it was an endeavor born out of high ideals, but then developed into technologies that could be deployed for baser motivations. The lab was founded by Stanford University professor of psychology B. J. Fogg, who was keen to build out the simple behavioral models of B. F. Skinner to something more sweeping. Rather than just get a rat to pull a lever for a bit of food, he sought to improve the habits of human beings.

  Like many technologists that I have met, Fogg comes across as friendly but somewhat odd. This is a man who is clearly brilliant, a pioneer in one of the most important fields of study in technology today. Yet he’s also a bit goofy (he poses with plush toys on his website),2 and more than a bit naïve about the potential implications of his work. He initially reached out to me after I mentioned the lab in a column, because he felt maligned, his work “misunderstood.”3 The 2016 election-meddling scandal led to a growing awareness of how social media could be misused, and Fogg came under fire from some critics—and journalists—who felt he should have done more to warn people about the nefarious effects of technology-enabled persuasion. But it became clear to me during interviews that Fogg, like so many technologists, was more interested and able to
discuss the bright side of innovation than to figure out ways to deal with the dark.

  “I grew up in a tech house. We had a microwave in the garage that we’d tinker with. I’m sure it was giving off radiation,” jokes Fogg.4 “But I was also very interested in language and wanted to do a degree in English and rhetoric. I had discovered Aristotle, and I thought, ‘All this [power of persuasion] could come to technology!’ ” Fogg eventually pursued a PhD at Stanford, looking at how technology influenced people. “But I wanted to go further, to look at whether computers that, say, shared your personality or flattered you would be more persuasive. Nobody was studying that. Well, except the video game people were onto it.”

  Fogg gathered a group to study a few dozen of the persuasive technologies that were already in use, like a video game put out by the army to try to recruit new GIs, and another underwritten by Dole Food Company to try to get people to eat more fruit. The methods were grounded in the research of psychologist B. F. Skinner, who found that the most effective way to create behavioral change is through a system of what’s known as “intermittent variable rewards.” Back in the 1950s, Skinner discovered that lab rats are quite content if a food pellet is given consistently—every five pulls of a lever, say. But the rat will develop a mad craving for that same pellet if it is given inconsistently: say, after one pull, then after seven, then after twenty-three. Not knowing exactly when that pellet will come, the lab rat will not stop yanking that lever. And as subsequent research showed, the same principle holds true for humans. This is, of course, the very mechanism behind the slot machine—and why it’s more addictive than all other types of gambling,5 and generates more annual revenue than all other games combined.