Is Big Tech the New Big Tobacco?
In September of 1965, Elizabeth Drew wrote an article for The Atlantic entitled The Quiet Victory of the Cigarette Lobby. In it, Drew dismantles the hollow victory that was the Federal Cigarette Labeling and Advertising Act, a piece of legislation that had passed in July that same year, and whose regulatory impotence demonstrated the scope of Big Tobacco’s ability to influence the health policies of the United States’ government.
By requiring cigarette packages to display a warning on them, the act ostensibly helped protect the American people from the harms of cigarette smoking, for which the links to lung cancer, laryngeal cancer, bronchitis, emphysema, and more had been definitively proven by a report from the Surgeon General’s Office a year prior.
Text only cigarette warning labels, like their flashier, image-coupled cousins, are not particularly effective in getting people to stop smoking, something the tobacco lobby was well aware of at the time. What they were concerned with was advertising, and provisions for the act essentially neutered the Federal Trade Commission’s ability to regulate such advertising at the state level, blocking the body from enacting more restrictive policies of its own. The changes the law instated were literally cosmetic.
Congress’ passing of the act in such a manner gave Big Tobacco exactly what it wanted and had long been working towards through an extensive network of high-level legal, business, and political connections in Washington and elsewhere — a chance to point to the legislation as evidence it was concerned for its consumers’ health, while actually easing regulatory influence over its practices.
Decades of life-saving advocacy and awareness-raising later, smoking rates have fallen dramatically in the US. In 1965, nearly half of the adult population was lighting up — these days that number hovers around 14 percent. Those figures represent a hard-fought victory for health that saved countless lives.
That Big Tobacco played dirty in its attempts to promote its products is unsurprising. Giving her final opinion in the now-famous 2006 Department of Justice lawsuit of the United States, et al. v Philip Morris USA, Inc., et al, US District Judge Gladys Kessler elucidated matters with biting clarity: “In short, defendants have marketed and sold their lethal product with zeal, with deception, with a single-minded focus on their financial success, and without regard for the human tragedy or social costs that success exacted.”
It would take a gargantuan act of ignorance to read those words and not appreciate the history lesson on offer regarding the current state of Big Tech. The five titanic companies that comprise this group — Google (Alphabet), Microsoft, Apple, Amazon, and Facebook — at times seem set on doing their best impressions of Big Tobacco, and the resemblance is so far uncanny.
The ingredients are certainly all there. Wildly profitable and habit-forming products? Check. Smartphones and social media now dominate the lives of billions of people around the globe. Emerging evidence that shows how these products are causing measurable and not insignificant amounts of harm to society? Check. Misinformation spread on Facebook and WhatsApp, for example, has led to mob killings in India and landed the company in hot water regarding its role in the January 6th Capitol Hill riots.
Misinformation aside, apps like Instagram are known to lead to the degradation of the mental health of those who use them, particularly of teenage girls, something that Facebook both acknowledges internally and downplays publicly.
Hovering over these realities is a sense that these mega-rich tech giants are something approaching untouchable. But for many, it remains just that, a sense.
If you’ve followed the news coverage of tech giants like Facebook and Google being hit with billion-dollar antitrust fines over the past couple of years, you may have noticed a slight change in tone in recent months.
The headlines have gone from everyone’s favorite cliche, that these fines are just “the cost of doing business,” to something verging on the optimistic: Big Tech can be reined in. The fines are actually working.
Both claims hold a fair amount of water, but they likewise both keep springing leaks. As Google sends representatives to Europe to appeal three antitrust fines, totaling nearly $8 billion, dealt out by the European Commission, now is as good a time as any to try to answer a rather important question: Is Big Tech the new Big Tobacco?
Why Fines Alone Don’t Work on Big Tech
It’s easy to feel that Big Tech can brush off fines with ease. Back in 2019, the FTC hit Facebook with a $5 billion slap on the wrist, the largest ever at the time, for allowing Cambridge Analytica to gather information on 50 million user accounts to build software that could profile US voters. Facebook had learned about the abuse of its users’ privacy years before the scandal broke but denied it had discovered any evidence of wrongdoing until whistleblowers called them out on it.
Alongside the $5 billion, Facebook was forced to alter some of its practices, changing up its corporate structure to allow for executive accountability. While some pointed to the ruling as evidence that Big Tech would start taking privacy more seriously, then FTC Commissioner Rohit Chopra expressed a distinct lack of confidence in this idea.
“The proposed order places no meaningful restrictions on Facebook’s ability to collect, share, and use personal information,” he said in a dissenting statement on the FTC’s decision, going on to say that it “ imposes no meaningful changes to the company’s structure or financial incentives.”
In December of last year, competition law expert Michelle Meagher expressed similar dissatisfaction with the fine while speaking on the Pitchfork Economics podcast, saying the ruling was “hardly a deterrent.”
Facebook is not alone in facing these penalties. In June of this year, Amazon made headlines in a similar manner after Luxembourg’s Commission for Data Protection claimed that the company had violated EU law by processing its users’ personal data without their permission. The commission hit Amazon with a fine of $886 million. The basis of the decision is one that the company firmly rejects and intends to appeal.
Even if Amazon fails at overturning the decision, however, it can weather the sub-billion dollar fine with ease — The company’s e-commerce revenue rose by $109 billion last year alone.
Punishments levied at Google have had much the same reception in recent years.
Some have been laughably weak, like when the FTC ruled in 2019 that YouTube had collected children’s data without their parents’ consent and fined them an absurd $170 million. Alphabet covers that financial ground in a matter of days.
"The discovery of pretty clear cut wrong doing [...] really weakens the industry’s ability to resist legislation and settlements."
Not all punitive measures against Google have been so toothless. Since 2017, the European Commission has hit the company with three, billion-dollar fines, claiming the company both used its Android operating system to harm competitors and prevented competing companies from placing ads in the most advantageous spots of the results page.
The woman heading the European Commission’s efforts is Margrethe Vestager, who said in a statement regarding a March 2019 fine it levied at the company that, “between 2006 and 2016, Google's behavior was illegal under EU antitrust rules. It prevented its rivals from having the chance to innovate and compete on the merits. Advertisers and website owners had less choice and likely faced higher prices, that would be passed on to consumers.”
Vestager and her organization has come under criticism for being “anti-American” in doling out these fines, but that amounts to little more than a blunt and unconvincing reaction to Brussels showing signs that it takes these companies’ infringements seriously.
Privacy and antitrust fines do have a role to play
The discussion over keeping tech giants in line has almost comically evolved over the years, shifting from one fear to another. Years ago, it was common to hear concerns that punitive measures would stifle these companies’ ability to innovate. Today, few seem convinced that these fines will have any effect on their conduct at all.
But those voices are growing both in number and magnitude. One more prominent figure to express this optimism is Isabelle de Silva, president of the French Competition Authority. Speaking to the Financial Times in July, de Silva struck an almost indignant tone, saying, “Fines are an element of the indication of what is wrong with the conduct,” adding that the new rules “will not prevent companies from making a lot of money and being profitable. I don’t see it being a threat to business or prosperity.”
De Silva and her office have hit Google with nearly $840 million in fines in two separate cases just this summer, the second of which Google decided to pay in full with no appeal. That is uncommon behavior for the tech titan.
France isn’t alone in considering a new, sturdier stance toward Big Tech. In 2019, a 150-page report commissioned by Britain’s finance minister declared that tech giants are not only impeding innovation and reducing consumer choices in that country, but should be subject to new antitrust laws that update the UK’s competition law for the digital age.
Back in the States, former presidential candidate and US Senator Elizabeth Warren has taken this sentiment even further by advocating that Big Tech should be broken up in a way that allows for greater competition, transparency, and protection of consumer rights.
Building a new relationship with Big Tech
Despite the fact that punitive measures are beginning to assume something of an upright posture in their stand against harmful Big Tech practices, fines alone won’t be enough to establish a level playing field. If regulators, politicians, and the public want to worry less about these companies’ contributions to society, Congress needs to implement a robust legal framework that takes aim at structural, not behavioral solutions. Until these laws are established and properly enforced, it’s unlikely Big Tech will exhibit any real, substantive change in how they go about their business.
Is this possible? There is reason to think it can be done, not just because of the lessons that Big Tobacco — and more recently, Big Oil — provide us with. After all, some feel that Big Oil could face a reckoning for its contributions to climate change in a similar way that the tobacco lobby has.
"Fines are an element of the indication of what is wrong with the conduct."
House Oversight Committee members Carolyn Maloney and Ro Khanna recently called on the executives of BP, Chevron, ExxonMobil, and Shell to testify at a hearing this month on the assertion that these companies actions willfully misled the public about the harms of their business practices in ways not dissimilar to that of Big Tobacco.
In a joint statement, the two claimed that Big Oil companies, “have worked to prevent serious action on global warming by generating doubt about the documented dangers of fossil fuels and misrepresenting the scale of their efforts to develop alternative energy technologies.”
Dozens of states have opened up lawsuits against oil companies in recent years, most of them alleging the companies caused a public nuisance in making neighborhoods less livable as a direct result of their contributions to climate change.
Speaking with The Guardian in June, Daniel Farber, the Faculty Director of the Center of Law, Energy, and the Environment at the University of California, Berkeley, explains why these lawsuits matter, even if the corporations survive the litigation process.
“Even if they’ve got a pretty good chance of winning the litigation in places, the discovery of pretty clear cut wrongdoing — that they knew their product was bad and they were lying to the public — really weakens the industry’s ability to resist legislation and settlements.”
That rhetoric feels almost disconcertingly familiar, and it lends credence to the thought that, if Big Tobacco and Big Oil can be held accountable, perhaps the same can be said of Big Tech for engaging in tactics that copy-and-paste from those industries that came before it.
There’s a sense in Washington that Big Tech lobbyists may feel they may have misjudged how much sympathy regulators and politicians are willing to grant them, as evidenced by lawmakers proposing a set of bills in the House of Representatives over the summer and fall season that could result in some very big changes if they become law.
The bills aim to cement a new relationship with these companies in a few different ways. Some prevent companies like Amazon from favoring their own products and services over others, others provide more funding to government watchdog agencies to keep a better eye on these corporations. Others still streamline how antitrust cases are carried out, aiming to avoid lengthy, multidistrict litigation that takes years to mediate and settle.
One such bill, introduced to and passed by the Senate Judiciary Committee, would allow state attorneys general to decide which court hears antitrust cases, something that could possibly expedite the judicial process.
Bipartisan support for such bills also seems to be on the rise. Since the 2016 election, politicians, along with much of the populace, have felt especially and justifiably wary of Big Tech and its role in society and its political processes. The sense is that the government should perhaps be a little less hands-off when it comes to how these companies operate.
The argument that regulation and fines on Big Tech are “too little, too late” becomes less and less persuasive as time passes. It may be that the coming decade for Big Tech will resemble Big Tobacco in its regulatory evolution. Back in the 1960s, even the most optimistic anti-tobacco advocates couldn’t have predicted what the smoking landscape in the US would look like nearly six decades later.
With enough time and consistent financial and legislative pressure, however, we may end up interacting with Big Tech in a more balanced and transparent way. Given these companies' track record of privacy violations, market manipulation, and contributions to social strife, (alongside constant assurances that there's nothing to worry about), that could very well be for the best.
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