A brutal year: how the ‘techlash’ caught up with Facebook, Google and Amazon

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A brutal year: how the ‘techlash’ caught up with Facebook, Google and Amazon

December 28, 2019 Syndicated 0

What goes up must come down, and in 2019, gravity reasserted itself for the tech industry.

After years of relatively unchecked growth, the tech industry found itself on the receiving end of increased scrutiny from lawmakers and the public and attacks from its own employees.

“The whole year has been brutal for tech companies,” said Peter Yared, chief executive officer and founder of data compliance firm InCountry. “The techlash we have seen in the rest of the world is just now catching up in the US – it’s been a long time coming.”

From new privacy legislation to internal strife, here are some of the major hurdles the tech industry has faced in the past year.

Elections intensify scrutiny

As the 2020 presidential race intensified, tech companies faced a growing backlash over the campaign-related content they allow on their platforms.

In October, Facebook quietly revised its policy banning false claims in advertising to exempt politicians, drawing fierce criticism from users, misinformation watchdogs, and politicians. Following the change in policy, presidential candidate Elizabeth Warren took out advertisements on Facebook purposely making false statements to draw attention to the policy.

Democratic lawmaker Alexandria Ocasio-Cortez grilled Facebook’s chief executive, Mark Zuckerberg, over the policy change in a congressional hearing in October. “Do you see a potential problem here with a complete lack of factchecking on political advertisements?” Ocasio-Cortez asked, as Zuckerberg struggled to answer. “So, you won’t take down lies or you will take down lies?”

Meanwhile, other tech companies took the opposite stance. TikTok, whose reported 500 million users makes it one of Facebook’s largest rivals, made clear in a blogpost in October it would not be hosting any political advertisements.

And Facebook rival Twitter banned almost all political advertising in October. Google stated in November it would no longer allow political advertisers to target voters based on their political affiliations.

Investigations threaten big tech

At one time, tech giant acquisitions were shrugged at. But the instant skepticism that met Google’s acquisition of Fitbit represented a shift in how regulatory agencies are looking at big tech: investigations are coming.

Throughout the year, tech giants faced congressional hearings on issues such as privacy, antitrust and misinformation. The US Congress announced in June it would investigate tech firms over anti-competitive behavior. In July, Facebook, Google, and Amazon faced a grilling before the House subcommittee regarding antitrust. A week later, the US justice department announced it was opening a broad antitrust review into Facebook, Alphabet’s Google, Amazon and Apple.

Shortly after, Facebook said it had agreed to pay a record $5bn penalty in the US for mishandling user data in the Cambridge Analytica breach.

Later in 2019, Facebook’s Zuckerberg spent hours in the hot seat as Congress members grilled him over the social media giant’s privacy practices and its plans to launch a digital currency.

While the hearings did not immediately result in legislative action, the tone of questioning underscored growing bipartisan animosity against tech executives.

Senator Sherrod Brown of Ohio said Facebook showed “breathtaking arrogance” in attempting to launch a digital financial service after a number of major privacy scandals and called Facebook “dangerous”.

New privacy laws loom

In 2019, US lawmakers and regulatory agencies began to direct at tech firms the kind of criticism that has been advancing in the European Union for years. In the year since the the General Data Protection Regulation (GDPR) went into effect in May 2018, the US has started to look at its own regulation addressing what data is collected on its citizens.

“Throughout the world, you see that people are fed up and you see more and more laws popping up,” Yared said. “And it’s coming to the US now.”

As the average American became more aware of the privacy issues and the magnitude of data collection, calls for legislation intensified, said Hayley Tsukayama, a legislative activist at the not-for-profit Electronic Frontier Foundation. Major scandals such as Cambridge Analytica and Amazon’s growing network of Ring doorbells have caused voters to request more action from their lawmakers.

“We have heard from many lawmakers saying they introduced legislation due to calls they were getting from constituents,” she said. “In a lot of cases, people will say they do not like what Google or Facebook is doing, they find an ad creepy or are upset about an invasion of privacy.”

The calls for better privacy protections have grown steadily each year and show no sign of slowing down, said Chris Babel, chief executive officer of privacy compliance firm TrustArc. Consumers are increasingly aware of privacy violations after their own data was mishandled by Equifax, Facebook and in other massive breaches.

“Privacy has become an even bigger theme in 2019,” Babel said. “Things have fundamentally changed – consumers care more about their personal information than they did in the past, and businesses do, too.”

In 2019, over 150 pieces of legislation on consumer data were considered in the US on the state and federal level as criticism over the companies’ growing reach and power intensifies.

Nevada, Maine, Washington, New York, Texas, Oregon and Maryland all passed laws related to data breach notification requirements, privacy and cybersecurity in 2019.

The California Consumer Privacy Act, which was passed in 2018, was finalized in 2019 and is set to go into effect on 1 January 2020. It is set to enact privacy regulations similar to Europe’s GDPR, giving consumers the right to know what data is kept on them and request it be deleted.

AB5 comes for the gig economy

Among consumers and legislators alike, 2019 brought a growing awareness that the explosion of the gig economy has come with huge challenges for workers.

California attempted to address that in September 2019 when it passed a landmark workers’ rights bill threatening to upend the gig economy. The bill, known as AB5, will change the way contract workers are classified. With tech giants including Uber and Lyft headquartered in California, the bill is likely to resonate far beyond state lines.

When the law goes into effect in January 2020, it will implement a three-part standard for determining whether workers are properly classified as independent contractors, requiring that (a) they are free from the company’s control, (b) they are doing work that isn’t central to the company’s business and (c) they have an independent business in that industry.

Gig economy startups, including Uber, Lyft and DoorDash have pledged millions of dollars against the bill, threatening to fund a ballot initiative to counteract it in 2020.

A year of organizing

Tech companies also faced intense backlash from within – the year of 2019 was “pivotal for worker organizing”, said Shona Clarkson, an organizer at Gig Workers Rising said.

The rise in activism marked a breaking point for the gig economy, Clarkson noted, with workers increasingly uniting to address workplace issues affecting employees at all levels.

“This was a year we saw workers rising up across the board,” Clarkson said. “It is long overdue – workers have been suffering within tech since the industry began, and now we are seeing the rising up of workers who are building the power necessary to win.”

At Google, repercussions from internal protests over sexual harassment policies that began in November 2018 continued into 2019. Workers at fundraising startup Kickstarter organized to fight for workers rights. Gig workers at Instacart and Uber also organized strikes to fight for better pay and benefits.

Companies have responded by allegedly cracking down on worker activists. Google hired an anti-union security firm and fired at least five employees involved in organizing. Two Kickstarter employees allege they were fired over their activism.

The protests were not only over worker treatment, but technology’s responsibility to larger political issues. In June, workers at online furnishings retailer Wayfair walked out of the job to protest the company’s contracts with detention centers for immigrants. In July, Amazon workers and activists protested the company’s contracts with government agencies.

 

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