Competition: Another Big DC Week for Tech (Where Do We Go From Here?)

When the leaders of Amazon, Apple, Facebook, and Google come to Washington, you know there’s going to be a lot of posturing – and it’s usually not (just) from the witnesses.

The focus this past week was the House Judiciary Subcommittee on Antitrust Law rather than privacy, security, and foreign influence – topics of previous high-profile hearings. Yet the out-sized attention on these leading executives and companies – all of them U.S.-based – is actually a testament, in my humble opinion, to the power of data, information, and innovation at work advancing the American and global economy. Has this exercise and accumulation of power been benign, beneficial… or harmful?

I’ve not been shy to tout the conveniences and benefits that we’ve accrued and enjoyed as a result of responsible data use. Yet I do not dismiss an investigation of harm, unintended or otherwise. Simply, I ask that in our zeal to rein in questionable practices, let’s flash a sign to policymakers: “Handle with Care.”

The world has embraced the Information Economy. It just so happens, not by accident, that the United States has both many global leaders (four of them visiting DC) and – it must be said – a long tail of innovative companies that want to grow, prosper, and potentially join the ranks of the next big, successful data-driven entities.

As Americans, we should do all we can to recognize our own advantage, and to encourage such business ingenuity – for a better world.  Transparency, control, and civil liberties must be protected… that’s all.

There’s a part of me – with my direct marketing heritage – that’s utterly in awe of what these companies have achieved, each of them forging their own paths to business success, and doing so in a way that has cultivated and curated data – marketing and otherwise – to create in each a global powerhouse. Digital has always been “direct marketing on steroids” (please let me know who coined this phrase), and many of these companies achieved their success through a fervor for measurability and accountability.

But the question of the day – antitrust – is a very serious charge. 

Practically every business revolution in the age of capitalism – oil, banking, computing, communications, digital, among others – have had to grapple with the question, how much power is too much? What constitutes “too big” in the Information Economy? Though no one has gone there yet, could there ever be a concept in the digital world as Wall Street’s “too big to fail” – in reference to our banking giants?

I myself don’t have these answers, but I do think it’s worth looking (again) to our digital and direct marketing heritage for some guidance. Certainly any new federal laws and regulation, such as for privacy, ought to be pragmatic in their approach – rather than overly prescriptive. We have a blueprint for a federal privacy law in Privacy for America, for example, which seeks to discern reasonable from unreasonable data uses.

Some consideration, please.

  • What if we held out that data collected for marketing use should be used for marketing purposes only? What non-marketing uses – product development and design possibly – might also be acceptable?
  • Should personally identifiable data collected for marketing use ever or always be anonymized for non-marketing use? Certainly, let’s make sure we can recognize consumers as they jump from device to device and across digital and offline platforms, if for no other reason than marketing or fraud prevention purposes. These aims grow the economy, serve consumers, and finance vital social aims such as news reporting.
  • Under what circumstances should private-sector data be handed over to government sources? What legal protections should govern such handovers – subpoenas and otherwise? It’s a borderless world. What access should foreign governments have to such data, about U.S. citizens or from other jurisdictions? It’s a fine line – or even a fuzzy blur – between anti-terrorism and unwanted surveillance of ordinary people.
  • And of course, there’s anti-competition. Data enablement and data sharing should grow the economy, foster competition, and serve consumers. Laws – whether anti-competition or privacy – should seek the same, and not undermine innovation. For example, the current demonization of third-party data feeds a frenzy that concentrates first-party data collection and power in “walled gardens” – where knowledge about customers’ marketing preferences often becomes incomplete and clouded. Could policymakers use their pen unwittingly to diminish the long tail of ad tech to detrimental effects? Even (some) Europeans have questioned what they’ve done.

As far as bias is concerned, add my voice to those who wish to do our utmost to minimize and eliminate protected-class discrimination in our algorithms and artificial intelligence – gender, race, religion, sexual preference – as we practice the art and science of commerce.

All the same, I have deep sympathy for this same task regarding political free speech: when and how we would ever attempt to define and remove political bias is dangerous territory. What is a lie? What is hate speech? What is a conservative or liberal bias?

There are no easy answers here. But I look forward to this public investigation, all the same. We need to understand fully where the Information Economy may overstep, overreach, restrict free speech, or undermine competition – even if these grievances are found to be remote.

Goodbye, Amazon HQ2 — But With Luck, Not So Many Tech Jobs

As a taxpayer and resident of New York City, it was hard to see Amazon reverse its decision to locate in Long Island City — the part of Queens that sits opposite Manhattan, across the East River.

As a taxpayer and resident of New York City, it was hard to see Amazon reverse its decision to locate Amazon HQ2 in Long Island City — the part of Queens that sits opposite Manhattan, across the East River.

I mean what city (and state) would say “no” to 25,000 to 40,000 middle-class jobs?

Well, apparently some loud mouths — elected and otherwise — in New York City.

Which is kind of a cruel joke, knowing that Amazon was only taking advantage of existing tax incentives offered to any enterprise that might want to locate there — the world’s new leading tech hub. Sure, the company may have wanted to add a helipad, but that’s not such an unusual request for celebrity CEOs. Its future tax incentives would be earned — with the city and state likely to collect 10 times the return in various revenue.

Credit: Office of Comptroller of the State of New York | “The Technology Sector in New York City”

Only Fools Would Say ‘No’ to That

Indeed, lots of industries — including another one from the West Coast, Hollywood — get loads of incentives to locate work there (and elsewhere). No one carries on much about the film industry. New York or Virginia had hardly landed — and in New York’s case, ultimately lost — an exclusive on Amazon HQ2. Cities and states across the country cut deals for jobs all of the time, including those that passed on the Amazon dog-and-pony show. Common sense says bring these jobs home.

Now, 25,000 to 40,000 New Yorkers have missed out on good-paying positions in a 21st century economy. Remember this blunder next election. Perhaps other companies — by the dozens — will generate and compete for these livelihoods in this dynamic local economy. Still, Amazon’s new managers will go elsewhere, undoubtedly benefiting other cities.

Someone has to answer for this.

It didn’t help, perhaps, that Amazon fashioned itself as some golden calf — a national prize. I mean, other tech giants — Google, for one — have brought thousands of jobs into the city. Google works with neighborhoods and the city to improve credentials. Google has its detractors, but it works from within and reaches out, and is growing outside the city’s more tax-friendly enterprise zones.

Perhaps, then, Amazon has to take some of the blame.

Bezos & Company could have done the same — invest in the community, build local coalitions — and weathered the initial resentments … all very successfully. But it made a decision to quit the city too quickly, and it’s not sitting well with me. I mean, Bezos bought The Washington Post to build a global brand, make more money and save democracy — yet, the company undermined democracy in its decision here (and so did elected officials who assailed the company).

According to the governor, eight in 10 New Yorkers backed Amazon’s expansion in New York State. The company still walked away because of a cabal of activist “Progressive Democrats”— many of whom never have built a business — who don’t seem to care for profits and future tax revenue, or see any reason to use incentives to attract jobs.

That’s not democracy — that’s Venezuela.

A business is a business — and whether old economy or new economy — it must answer to shareholders, investors, owners, and to customers and employees, too. It has a fiduciary responsibility to do so. Some socialists simply hate that, and chose to demonize the world’s richest man and his company — just as some demonize the collection of data that makes Amazon, and so many other disruptive innovators, so successful.

Profit Under Fire — What Does This Portend?

We need to repel these no-growth influences that now have a voice seemingly in all levels of government.

Regarding Amazon, in Albany (New York’s capital) and New York City, these activists won the day. They’d rather have a city and state go wanting — than to have a tax base that might begin to fund at least some of their generous schemes. The Economist calls this “Millennial Socialism” — though no insult intended to the former. (Bernie Sanders wasn’t born in 1990.)

The incentive-for-job-growth debate is not unlike the data-for-value concept. Both require trust, transparency, local control, self-regulation and willing partners. When in sync, wow – look at the undeniable dividends. When out of step, what a blunder.

Now, Long Island City and Queens may never know the opportunity they had. Let’s hope better for the rest of New York City, and of the country, before we, too, fall out of step.