The Laws of Big Technology

For a long time, the only law talked about in technology circles was Moore’s Law. Gordon Moore’s assertion in 1965, that the number of transistors on a microchip would double every 2 years or so, has held true for longer than anybody expected. Although not as widely quoted as Moore’s Law, Amara’s Law is one of my favorite ways of looking at the impact of technology on our world. It observes that we “tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run”.

Proclamations of a tech as the next big thing or panacea rarely turn out to be true, at least not at the rate promised by proponents. But eventually, technology tends to cause massive change and we’re rapidly reaching a point where the influence wielded by technology companies is attracting a lot of attention — much of it from Governments and regulators.

There isn’t a legal jurisdiction in the world equipped for the impact of technology. From commercial law to road traffic to encryption or data protection, legal systems are more closely aligned with the invention of the wheel than the self driving car. But tension between the law and technology is not new.

Revolutionary Scale

The original Industrial Revolution produced a vast number of new inventions, which in turn saw new fields of law come into being. From steam boiler regulations to patent law, there was a big effort to provide a normative framework for the opportunities and risks facing a newly industrialized society.

Fast forward more than two hundred years and there are strong parallels to the Luddite era as people fear new technology and its implications. This time, we aren’t talking about looms in a factory — but larger scale questions such as: does Facebook influence elections on behalf of outside actors, and does Google spread fake news promoted by algorithms? Compared to even 20 years, let alone 200+ ago, today’s dominant technology giants operate at a scale never seen before. The once dominant Microsoft/Intel alliance of the 1990s was a fraction of the size of today’s giants. The likes of Apple, Google and Facebook are richer than many countries and provide benefits for their employees better than any welfare state. The founders of Tesla and Amazon are involved in a space race previously reserved for nation super powers, not rich business people.

Conflict

With great scale comes great scrutiny and great complaints from aggrieved parties. Yet many in Silicon Valley seem to believe that disruption alone justifies circumventing laws — unicorns such as Uber and AirBnb may feel that over-protective laws in the way of their business ambitions can be ignored, even if the regulations are designed to protect the greater good rather than an incumbent.

The recent narrative casting the technology sector as the “bad guy” in need of more regulation — to stop job losses, stop housing crises and subversion of the democratic process — is usually devoid of an balance and at times seems more driven by commentators than public opinion. If we consider additional regulation (assuming it isn’t too late already) and we try to put the brakes on tech, what are the likely consequences?

“Now that Google, Facebook, Amazon have become world dominators, the questions of the hour are, can the public be convinced to see Silicon Valley as the wrecking ball that it is? And do we still have the regulatory tools and social cohesion to restrain the monopolists before they smash the foundations of our society? We need greater regulation, even if it impedes the introduction of new services. If we can’t stop their proposals — if we can’t say that driverless cars may not be a worthy goal, to give just one example — then are we in control of our society?”
New York Times

Challenging Law

Technology today moves at a faster pace than people are ready for — something Google’s CEO recently acknowledged. Not everyone can tolerate the collateral damage of a policy such as move fast and break things espoused by Facebook. Yet politicians and lawmakers are sometimes afraid of clampdowns for fear that the immensely valuable corporations will move to more permissive locations. It’s hard to regulate bravely when the companies are bigger than countries and location is far less important than it was in the days of worker immobility and physical resource requirements.

The concept of amendments and repeals does show that our early lawmakers knew they couldn’t tell the future and couldn’t legislate for it, and so required the ability to modernise our legal framework. Ironically though, those who decide on regulation are hearing of threats to their very existence — Artificial Intelligence capable of taking over many low-end legal tasks is developing rapidly, as are algorithms to help with policy decisions.

“I am not an advocate for frequent changes in laws and Constitutions. But laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times.”
Thomas Jefferson

Fighting Their Corner

The very smart people running the big firms are often accused of being out of touch, but one thing you can be sure of is that they are painfully aware of the threat posed by the distraction of legal challenges and the erosion of public trust. The current crop of dominant firms are all young enough to remember the effects on Microsoft of aggressive Government oversight.

The big firms try, with varying degrees of failure, to police themselves. New reporting processes instituted after sufficient levels of complaint have been reached — Facebook now include fact-checking that highlights contested posts, having already spent significant resources shoring up their privacy policies. Twitter seems to be endlessly trying to “do better” at controlling the trolls and bots that have stifled its growth.

To preempt or at least minimize unfavorable legislation, Apple, Amazon, Facebook and Google spent over $12m on political lobbying in the 2nd quarter of 2017 as they sought to influence US policy. Click here for an example of the topics covered.

Alongside congressional lobbying on self driving car regulations, Waymo has launched a Public Education ad campaign in Arizona to persuade the public of the benefits of this new technology that they’ve spent over $1 billion developing.

Who Guards the Guards?

Those in positions of regulatory power can’t see the future with any greater certainty than those in the technology companies trying to build it. The involvement of Government in technology is not simple — the internet itself is an outcome of government investment in innovation. So who is qualified to draw up the laws for the unclear future? Historically there has been a tendency for vested interests to be overly involved and an absence of impartiality. The Government councils of the 1920s on motor safety were dominated by auto industry execs with predictable results. But advisory councils on technology are by necessity heavily populated with industry experts likely in favour of loose regulation.

And then there’s public opinion. The growth of the dominant players by definition couldn’t happen without the public. The very network effect that makes people value Facebook means breaking it up would render it useless, not more attractive. As Professor Scott Galloway of NYU notes in his recent book The Four: The Hidden DNA of Amazon, Apple, Facebook and Google, people have willingly handed over their personal information in unprecedented volumes to Facebook and rely on Google for knowledge.

The New Law

“The saddest aspect of life right now is that science gathers knowledge faster than society gathers wisdom”
Isaac Asimov

There are those who believe that attempts to regulate dominant companies are unnecessary — history tells us that the dominance will come to a natural end. But that is to project the past onto the future as if nothing has changed. The dominance of the current giants and their associated cash, technology and talent resources means they have a better chance than any predecessors to identify and harness the next big thing that would in previous generations have been their undoing.

Whether it’s internal struggles around diversity or discrimination, sector litigation for Intellectual Property disputes or regulatory confrontations with Governments or the EU, the big tech players face increasing distractions from their core fight for world domination. Perhaps the replacement for Moore’s Law will be a prediction about the doubling of legal issues every 6 months.