Co-Chairs Zimmer and Collins, members of the committee, thank you for the opportunity to address you today. My remarks will build on last night's presentations by Professor Zuboff, Professor Tworek, Ben Scott and today's by Jim.
For the 35 years I spent as an investor, I shared Silicon Valley's commitment to technology that empowers the people who use it. Beginning in 2004, however, I noticed a transformation in the culture of Silicon Valley, and over the course of a decade, customer-focused models were replaced by the relentless pursuit of global-scale monopoly and massive wealth.
As Professor Zuboff told you, Google was the first to see the economic opportunity from converting all human experience into data. Google wants to make the world more efficient. They want to eliminate user stress that results from too many choices. Now, Google knew that society would not permit a business model based on denying consumer choice and free will, so they covered their tracks. Beginning around 2012, Facebook adopted a similar strategy, later followed by Amazon, Microsoft and others.
For Google and Facebook, the business is behavioural prediction. They build a high-resolution data avatar of every consumer—a voodoo doll, if you will. They gather a tiny amount of data from user posts and queries, but the vast majority of their data comes from surveillance: web tracking, scanning emails and documents, data from apps and third parties, and ambient surveillance from such products as Alexa, Google Assistant, Sidewalk Labs and Pokémon GO.
Google and Facebook use data voodoo dolls to provide their customers, who are marketers, with perfect information about every consumer. They use the same data to manipulate consumer choices. Just as in China, behavioural manipulation is the goal.
The algorithms of Google and Facebook are tuned to keep users on site and active, preferably by pressing emotional buttons that reveal each user's true self. For most users, this means content that provokes fear or outrage. Hate speech, disinformation and conspiracy theories are catnip for these algorithms. The design of these platforms treats all content precisely the same, whether it be hard news from a reliable site, a warning about an emergency or a conspiracy theory. The platforms make no judgments: users choose, aided by algorithms that reinforce past behaviour. The result is 2.5 billion Truman Shows on Facebook, each a unique world with its own facts.
In the U.S., nearly 40% of the population identifies with at least one thing that is demonstrably false. This undermines democracy. The people at Google and Facebook are not evil. They are products of an American business culture with few rules, wherein misbehaviour seldom results in punishment. Smart people take what they can get and tell themselves they've earned it. They feel entitled. Consequences are someone else's problem.
Unlike industrial businesses, Internet platforms are highly adaptable, and this is the challenge. If you take away one opportunity, they will move on to the next one, and they are moving upmarket, getting rid of the middleman. Today they apply behavioural prediction to advertising, but they have already set their sights on transportation and financial services.
This is not an argument against undermining their advertising business, but rather a warning that it may be a Pyrrhic victory. If your goals are to protect democracy and personal liberty, you have to be bold. You have to force a radical transformation of the business model of Internet platforms. That would mean, at a minimum, banning web tracking, scanning of email and documents, third party commerce and data, and ambient surveillance. A second option would be to tax micro-targeted advertising to make it economically unattractive.
You also need to create space for alternative business models, using anti-trust law. Start-ups can happen anywhere. They can come from each of your countries.
At the end of the day, though, the most effective path to reform would be to shut down the platforms at least temporarily, as Sri Lanka did. Any country can go first. The platforms have left you no choice. The time has come to call their bluff. Companies with responsible business models will emerge overnight to fill the void.
Thank you very much.