The political storm over the Googleplex

April 27, 2015 4:01 pm

The political storm over the Googleplex

By Gideon Rachman

Concern about government snooping is mixed with anxiety about commercial use of data

Google regularly tops the list of companies that students want to work for and, visiting its Silicon Valley campus last week, I could see why. The skies were blue, the temperature was perfect. A group of employees was playing volleyball, while out in the car-park somebody was demonstrating a prototype of a self-driving Google car.

Amid all the fun, Google has emerged as one of the five largest companies in the world, measured by market capitalisation. The largest, Apple, is about 20 minutes drive down the road. Facebook, another giant, is in a nearby suburb.

Yet the Silicon Valley idyll is increasingly being disturbed by political storms blowing in from foreign lands. The world’s students may aspire to work for Google. But the world’s politicians seem to want to bring the company to heel.

This month saw the announcement that the European Commission in Brussels is charging Google with violations of competition law. Potentially, the charges threaten the company with a choice between massive fines or costly modifications to its business model.

Europe is not the only source of trouble. Most western multinationals see the Chinese market as crucial to their futures. But Google, along with Facebook and Twitter, is effectively shut out by the country’s “Great Firewall” that blocks internet access.

Meanwhile, Silicon Valley’s close relations with the Obama administration have got a lot tenser since Edward Snowden’s revelations about the extent of US government snooping on the internet.

The Snowden affair seems to have galvanised those who believe there is something sinister about the power of Silicon Valley. French critics came up with the acronym, “Gafa” (Google, Apple, Facebook, Amazon), to encapsulate America’s evil internet empire. As the acronym suggests, it is often Google that is placed first in the firing line. Company executives were aghast when the British government decided to crack down on alleged tax avoidance by multinationals and the new measures were dubbed the “Google tax”.

One theory is that Google has attracted particular attention simply because it is the most ubiquitous name in Silicon Valley. (Not everybody can afford an iPhone, but Google is free to anyone with internet access). Another argument is that the breadth of Google’s activities means it is upsetting incumbents all over the world — whether it is newspapers angered by Google News; media companies threatened by YouTube (owned by Google); publishers that hate Google books; or car manufacturers who see driverless cars on the roads and worry that even their industry is vulnerable to the Valley.

Some European politicians have been explicit in their concerns that the success of the US internet giants poses a direct threat to Europe. Sigmar Gabriel, Germany’s vice-chancellor, worried aloud last year that “this (digital) infrastructure will be controlled by a handful of American internet concerns, which could dominate the economic life of the 21st century.”

One of the most vociferous corporate critics of Google is the Axel Springer publishing group in Germany, a powerful voice in Berlin and Brussels, and which provided crucial support for the election of Jean-Claude Juncker as the head of the European Commission.

President Obama seemed to buy the idea that US internet companies are the victims of European protectionism, when he argued recently that — “We (America) have owned the internet. Our companies have created it, expanded it, perfected it, in ways they can’t compete.” What Mr Obama did not add is that the US government itself has done much to damage Silicon Valley. The Snowden affair has firmly established the idea that any internet search, email or post is open to surveillance, either by the government or by the likes of Google and Facebook.

Google and other internet giants vehemently deny that they ever gave governments the keys to a secret back door into their data. Indeed, they complain that they were themselves the victims of snooping. In an effort to regain consumer trust, the Silicon Valley firms are emphasizing their new encryption technologies and privacy safeguards. But the damage is done. Concern about government snooping has become intertwined with anxiety about the commercial use of data by firms such as Google. That, in turn, has fed the appetite for the regulation of the internet.

All of this political heat appears to have come as an unpleasant surprise to the company, which seems genuinely to believe that it lives by the motto of its founders: “Don’t be evil.” Yet the real surprise is that the political backlash did not come sooner. Google proclaims its mission is “to organize the world’s information”. But, as the saying goes, “information is power”. And power has traditionally been the province of politicians.

Some argue that it is better that “elected politicians”, not business people, should take decisions about the flow of information and data. But some of the political figures most eager to take on Google — like the Chinese government and even the European Commission — are not, in fact, elected. And while nobody voted for the engineers and entrepreneurs of Silicon Valley, more than a billion customers have voted with their fingers by clicking on Google products. That is the kind of vote of confidence that most politicians can only dream of.

Copyright The Financial Times Limited 2015.


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