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How Silicon Valley Went from Technology Hero to Bad Guy

Once hailed for innovation and transformation, the tech industry is in the midst of a backlash. With growing public concern over privacy and the threat to existing jobs, expect to see more government regulation.

Facebook CEO Mark Zuckerberg appears before the House Energy and Commerce Committee in Washington, D.C., on Wednesday, April 11, 2018. (Erin Scott/Zuma Press/TNS)
Civic Hall is a nonprofit in Manhattan that offers technology and job training to low-income residents, while also promoting collaboration among startups, civic groups and governmental agencies. It’s been a big success, to the extent that it’s planning a move from a 6,000-square-foot space to one more than 10 times that size.

Unfortunately, when New York City Mayor Bill de Blasio announced the move, he described the new facility as a “tech hub.” That was unfortunate because Civic Hall’s prospective new neighbors heard that phrase as a signal that giant technology companies were about to move in, raising rents and forever altering the character of the area.

“The mayor thought he sounded visionary, but the reality is that term is pejorative,” says Andrew Rasiej, Civic Hall’s founder and CEO. “People are generally aware that technology is not working in their favor.”

Rasiej was eventually able to assuage his neighbors’ concerns, meeting with some 80 different community groups over a period of eight months. But the fact that the idea of a tech hub inspired a fierce form of NIMBYism is a reminder that the technology industry now faces political and public relations problems that it’s never had before.

Scare headlines about massive data breaches have become routine. Major tech companies are continuously forced to pay fines in the millions or billions of dollars for mishandling data or abusing trust. Some of the big firms are facing investigations by the U.S. Justice Department or state attorneys general. On Tuesday, the Federal Trade Commission announced it was expanding an antitrust investigation involving Amazon, Apple, Facebook, Microsoft and Alphabet, the parent company of Google.

Politicians from both the left and the right, including Democratic Sen. Elizabeth Warren of Massachusetts and GOP Sen. Josh Hawley of Missouri, now call for greater regulation or even breakups of big tech firms. “They have been very irresponsible… Their behavior is shameful,” House Speaker Nancy Pelosi said about Facebook last month. “They don’t care about truth.” More recently, Facebook and Twitter refused Pelosi’s requests to take down a misleadingly edited video of her at President Trump’s State of the Union address.


Civic Hall is a successful nonprofit collaborative focused on providing tech-related opportunities to low-income residents in Manhattan. It inadvertently became a lightning rod for misplaced concerns that big commercial tech was bringing all its problems to the area and would change the good things the community had going.

States and cities alike are considering legislation to protect data privacy and regulate or ban the use of facial recognition. “Privacy concerns cross party lines,” says New Jersey state Rep. Andrew Zwicker. “When I’m out talking to people, I’m hearing this over and over, especially all the headlines around facial recognition right now.”

This represents a huge change in tone from just a few years ago, when politicians seemed to believe that tech could do no wrong. At the start of the century, Congress took a free-market approach to the Internet, blocking taxes on access and online purchases. Every mayor in America led cheers for tech hubs in their towns, bragging about being home to the next Silicon Prairie or Silicon Alley or Silicon Whatever. 

“The policy of the United States seemed to be what was good for the Internet is good for America,” Bruce Mehlman, a former assistant secretary of commerce for technology policy, said at a National Press Club forum. “Now, it’s mixed.”

It’s possible that the so-called techlash was inevitable. What were once seen as scrappy, innovative companies creating a world-leading industry have become corporate behemoths, blamed — in part, at least, in some quarters — for everything from election interference and the death of privacy to the spread of hate speech, misinformation and “fake news.” Today, there’s also a generalized, if often overstated, fear that the robots are going to take all the jobs.

No one is suggesting that the tech genie can or should be put back in the bottle. If anything, the pace of innovation and the use of technology are likely to accelerate. But the tech giants themselves recognize that they can no longer expect a free ride when it comes to regulation.

“When companies become the most important players in terms of both market cap and ubiquity in our lives, it’s going to raise policy questions and it should raise policy questions,” Mehlman said. 

Decline of Trust in Tech

In an era when faith in institutions keeps reaching new lows, people are still generally hopeful about technology. Surveys indicate that more people trust tech more than other industrial sectors such as manufacturing, let alone government or the media.

People like technology and the benefits it brings, but many now worry that tech companies value profits over privacy, while also growing nervous about artificial intelligence and robots posing a threat to their own livelihoods. The share of Americans who believe technology companies have a positive impact on society has plummeted from 71 percent in 2015 to 50 percent in 2019, according to the Pew Research Center.

“Tech has moved from a niche concern to something central to all our lives,” says Chris Calabrese, vice president for policy at the Center for Democracy and Technology, which advocates for digital rights. “Once that happens, it becomes enmeshed in all the other issues in our lives.”

Students at top universities whose recent forebears dreamed of landing a job in Silicon Valley now openly express moral qualms about working there. Publications such as Slate — once owned by Microsoft — run articles that rank tech companies according to the “evil” that they do. Workers at technology companies themselves complain about facing discrimination or protest their employers’ stances in areas such as human rights, defense and environmental policies.

“The hero of this next movie is a naïve, misguided child who spreads Nazi propaganda and only has imaginary friends. His name is Mark Zuckerberg,” Sacha Baron Cohen said at the Golden Globes last month, turning an introduction of a clip from “Jojo Rabbit” into a swipe at Facebook’s CEO. 

For the public at large, there was a “Snowden moment” following the revelations of massive federal collection and use of data by former National Security Agency contractor Edward Snowden, says Lee Rainie, Pew’s director of Internet and technology research. That’s been followed by several similar moments, including illegal data mining of Facebook users' personal data by Cambridge Analytica during the 2016 election. 

“One of the democratic implications is that misinformation is going to take us down, that the targeted ad system is just a formula for killing off all the best parts of democracy,” Rainie says, summarizing public fears.

People now recognize that behaviors they thought were perfectly innocent, such as liking and sharing things on social media, are not only being monetized but could potentially be used against them. The increasingly poor perception of tech companies is also driven by the fact that some of them have become enormous and powerful. It wasn’t many years ago that the tech companies were viewed as underdogs against telephone and cable giants in policy fights such as the net neutrality debate. 

Now, it’s the tech firms that are seen as the overbearing corporate titans. The five largest companies in the country, by market cap, are all tech companies. (Not coincidentally, it's the same list of companies that are facing increased FTC scrutiny.) Everyone loves an underdog. No one likes a monopoly. 

Perhaps not too many people have real concerns about the vast majority of tech firms, even large ones such as Oracle or Hewlett-Packard. They are worried about companies that look like monopolies, notably Facebook, Google and Amazon.

“Over time, the populace has seen how much power Facebook has, and so they’re trusted less,” says Lee Tien, a senior staff attorney at Electronic Frontier Foundation, a nonprofit law firm advocating digital rights. “It is a part of American political and general commercial culture to really not like monopolies.”

More Regulation Is Coming

Hardly a week goes by without Congress holding a hearing on tech issues such as antitrust, privacy, misinformation and misuse of data. Members of Congress — buoyed by support from companies including Disney and IBM — are drafting bills that would increase the liability of content platforms for what’s posted on their sites.

“There’s been a lack of regulatory oversight for a long time,” says Calabrese, the interim co-CEO of the Center for Democracy and Technology. “For a long time, the attitude was, this Internet thing is great and we don’t want to kill it with undue regulation. That was the right decision, but it has let some problems grow unchecked.”

States are considering a slew of bills this year to address privacy concerns. How many will pass — or what they will look like — remains much in doubt. Getting the balance right between protecting consumers and not harming commerce will be difficult. Lawmakers remain wary of approaches that are aimed at the big boys but might harm smaller companies in the process.

But the tech giants themselves acknowledge that they’re entering into a new period where more regulation is to be expected. Last month, both the president of Microsoft and the CEO of Google called for some form of regulation of artificial intelligence. Microsoft has supported regulation of facial recognition for a couple of years now.

“You’re starting to see a recognition that some form of regulatory oversight is not just inevitable but actually welcome,” Calabrese says. “There’s a recognition that companies big and small benefit from some regulatory certainty: You can trust our data, because we wouldn’t break the law.”

If major tech companies recognize that they might need some seal of governmental approval to win back the public’s trust, it’s because they’ve done so much to earn the skepticism in the first place, suggests Rasiej, Civic Hall’s CEO.

“There used to be this idea in Silicon Valley that you should disrupt and break things,” he says. “It was done in such a way that the people who were most affected by those technologies were not able to voice their concerns.”

Alan Greenblatt is the editor of Governing. He can be found on Twitter at @AlanGreenblatt.
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