2017 was a year were Silicon Valley received more criticism on more fronts than ever. But should tech giants be fought with regulations — or with code?
For decades, Silicon Valley was chiefly recognized as a hub of innovation and great minds. But in 2018, it sounds about as charming to work in Silicon Valley as on Wall Street. Even groups that previously seemed unconcerned by the dominance of Silicon Valley’s giants, joined the critics: US politicians, former employees and even the companies themselves admit that not everything is as it should be.
An endless list of controversies
The list of controversies has become long, and just to mention a few. Fake news and Russia’s attempts to manipulate election campaigns. Social media’s impact on our mental health. The tendencies toward monopoly through acquisitions and continued growth. The sharing economy and automation contributing to fewer stable jobs and pushing people into the so-called precariat.
However, even if you zoom in on Silicon Valley, it’s a gloomy picture. Developers receive excessive salaries which contribute to rising housing prices, while those who serve them in the cafeteria work in insecure jobs and are paid a pittance. The #MeToo movement has also the highly problematic work culture in Silicon Valley, with stories of sexual harassment and underrepresentation of virtually every groups except white, heterosexual men.
Can you boycott big tech?
Each of these stories alone would be enough to justify a critical look, but in sum, it has brought increasingly more people to the conclusion that the big tech companies are not wielding their power responsibly.
Thanks to network effects though, it’s often difficult to boycott them. The more people that use the service, the more useful it is. Diaspora tried competing with Facebook, but so what when all your friends are on Facebook? The search engine DuckDuckGo does an excellent job without collecting data about you, but will that change anything as long as Google is the default search engine in most browsers?
And when new companies are actually managing to challenge the big companies, it doesn’t take long before the giants buy them or copy them.
Increased calls for regulation
The northern European solution would be to call for stronger regulation, but even US Republicans are becoming receptive to this idea. (However, this is not apparent in the fight for net neutrality). The challenge is that the traditional understanding of monopolies has a strong focus on inflated prices. But the prices are not high — the problem with the tech giants consists in the concentration of power. Companies like Google and Facebook have become basic infrastructure for everything we do online, but nationalization of the companies is not exactly realistic.
In Europe, with Germany in the forefront, we have indeed seen examples of stronger regulation. Last summer, the EU fined Google 2.4 billion euros for abusing its market position. On May 25th, the EU directive GDPR is put into effect, giving users more control over how their data is used. In January, a German law which makes social media companies responsible when fake news and hate speech is being spread on their services, came into force. If they don’t comply, they risk substantial fines.
The call for a new decentralization
If you go back 30 years, it’s surprising that the Internet formed the basis for some of history’s most powerful companies. The Internet was developed by non-commercial forces, to be a neutral and decentralized system. The World Wide Web was also designed to be decentralized. Ironically, some of those seemingly innocuous websites grew to powers that were inconceivable at the web’s original inception. Gradually, the web became centralized around a very few and powerful nodes, like Facebook, Google and Amazon.
The idea of the decentralized Internet got a little bit of mainstream attention when Pied Piper realized in Season 4 of Silicon Valley that they could use their technology to build a decentralized Internet. Photo: HBO
There are some that argue you can’t recreate the decentralized web through regulation. Rather, the current design of the Internet and the web has fundamental flaws. It’s a problem we need to code ourselves out of, rather than regulate ourselves out of, to simplify the argument slightly. Globally, there are a number of different groups who champion the idea of an open, neutral and decentralized network. The exponents range from idealistic activists to VC funded entrepreneurs.
The decentralized net — in plain(ish) English
Although there is no agreed-upon definition of decentralization, the different projects share some characteristics. A central idea is to get files from other users, that is, peer-to-peer instead of a central server. Since there are additional copies of the file stored with different users, you will still be able to obtain the file, even if there are connectivity issues in some places. No users are storing the entire file, only tiny encrypted bits of multiple files. Thus, it becomes virtually impossible to hack in to steal passwords or credit card details, or for states to censor and control the Internet traffic. When the addition is far cheaper, appears servers hopelessly old.
But why should you and I bother to store other people’s files? In several projects, this is incentivized using blockchain technology, the same technology that underlies cryptocurrencies like Bitcoin. Projects like MaidSafe and IPFS have their own cryptocurrencies, which serves as tokens. The more storage you contribute, the more tokens you earn, and these, in turn, can be used within the network. Or you can choose to convert them to “regular” money.
What could be the most radical change is that these tokens could enable entirely new business models. In some projects, the system automatically and directly rewards those who contribute value — the users themselves, and those who develop the most popular apps on the network — which in theory means you could get rid of the ad model. There are already market places where there is no longer any intermediary who takes a cut. Instead, the whole sum goes directly from buyer to seller.
Tokens also serve as an alternative to equity, blurring the boundaries between entrepreneurs, investors, and users. On a side note, this development has also spawned a new genre of scams you should be aware of before you jump on the cryptocurrency bandwagon.
The decentralized net brings with it new dilemmas
The decentralized network is full of challenges. The world’s librarians and archivers would probably rejoice if anything that had ever been online never would be able to disappear again just because someone shut down an internet service or a server crashes. But most of us can also imagine content that we would like to disappear from the web.
Correspondingly, a network that is impossible to censor without shutting down the entire Internet, sounds attractive when we think of censorship in countries like China, Turkey or Iran. But this also means it becomes impossible to detect and censor e.g. child exploitation material (I choose not to use the term child pornography).
I can’t champion something I barely understand
The concentration of power has not only happened because of how protocols and systems were designed. Giants like Facebook and Google helped make technology accessible and easy to use for most people. You can use the Internet today, without having any clue about how it fundamentally works.
I have had a 24/7 Internet connection since I was 12, spending my time on IRC and building a couple of websites. I’m the person that everyone in my group of friends calls when they have computer trouble. The last ten years, my job has been to create digital services and websites.
Still, even after having spent several days reading about the decentralized web, I found it almost incomprehensible. As long as most people won’t be able to understand what the decentralized Internet even is, I think we’ll have to make due with stronger regulation if we want to challenge the tech giants.
An earlier version of this text was published in Norwegian Business Daily Dagens Næringsliv. Comments? Leave them below, or say hello on Twitter or e-mail me at ida@idaaalen.no.