In a curious turnaround, Quartz reports that George Soros in a speech at Davos identified the “monolithic power” of Google and Facebook as threats to democracy as we know it. Considering that Soros typically puts his vast wealth behind his view of the world, this could get interesting. Here’s the nub of what Quartz reports he said:
Facebook and Google effectively control over half of all internet advertising revenue. To maintain their dominance, they need to expand their networks and increase their share of users’ attention. Currently they do this by providing users with a convenient platform. The more time users spend on the platform, the more valuable they become to the companies.
Content providers also contribute to the profitability of social media companies because they cannot avoid using the platforms and they have to accept whatever terms they are offered.
The exceptional profitability of these companies is largely a function of their avoiding responsibility for—and avoiding paying for—the content on their platforms.
Mr. Soros, come on down. We’ve only been saying this for about 10 years now. It is significant that someone like Soros has joined the value gap club and by the looks of it the SESTA club as well. For at the heart of the “avoiding responsiblity” functionality is the DMCA and Section 230 of the Communciations Decency Act (and soon the newest safe harbor in the Music Modernization Act).
While I doubt that Mr. Soros would have the uncouthness to stop payment on financial commitments he’s already made to fund groups he now disagrees with, it is remarkable to think that Soros might actually fund groups that support private property rights. He certainly sounds like he’s headed in that direction:
Social media companies deceive their users by manipulating their attention and directing it towards their own commercial purposes. They deliberately engineer addiction to the services they provide. This can be very harmful, particularly for adolescents. There is a similarity between internet platforms and gambling companies. Casinos have developed techniques to hook gamblers to the point where they gamble away all their money, even money they don’t have.
Something very harmful and maybe irreversible is happening to human attention in our digital age. Not just distraction or addiction; social media companies are inducing people to give up their autonomy. The power to shape people’s attention is increasingly concentrated in the hands of a few companies. It takes a real effort to assert and defend what John Stuart Mill called “the freedom of mind.” There is a possibility that once lost, people who grow up in the digital age will have difficulty in regaining it. This may have far-reaching political consequences. People without the freedom of mind can be easily manipulated. This danger does not loom only in the future; it already played an important role in the 2016 US presidential elections.
Mr. Soros goes on to put his finger on a topic that we discussed at the recent Artist Rights Symposium at the University of Georgia–the combination of tech companies and totalitarian states like China’s joint development efforts with Google for artificial intelligence and Tencent’s investment in Spotify that may give it a foothold in controlling popular culture.
[T]here is an even more alarming prospect on the horizon. There could be an alliance between authoritarian states and these large, data-rich IT monopolies that would bring together nascent systems of corporate surveillance with an already developed system of state-sponsored surveillance. This may well result in a web of totalitarian control the likes of which not even Aldous Huxley or George Orwell could have imagined.
The countries in which such unholy marriages are likely to occur first are Russia and China. The Chinese IT companies in particular are fully equal to the American ones. They also enjoy the full support and protection of the Xi Jingping regime. The government of China is strong enough to protect its national champions, at least within its borders.
US-based IT monopolies are already tempted to compromise themselves in order to gain entrance to these vast and fast growing markets. The dictatorial leaders in these countries may be only too happy to collaborate with them since they want to improve their methods of control over their own populations and expand their power and influence in the United States and the rest of the world.
The owners of the platform giants consider themselves the masters of the universe, but in fact they are slaves to preserving their dominant position. It is only a matter of time before the global dominance of the US IT monopolies is broken. Davos is a good place to announce that their days are numbered. Regulation and taxation will be their undoing and EU Competition Commissioner Vestager will be their nemesis.