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How to Rein In Powerful Companies Without Ruining the US Tech Industry

By Rob Enderle TechNewsWorld ECT News Network
Mar 18, 2019 10:40 AM PT
there are better ways to address abuse of power than breaking up tech companies

Elizabeth Warren's desire to curtail Facebook, Amazon and other companies that have misused their massive power -- or may do so in the future -- is well founded. The U.S. appears to be trending toward civil war, and I'd place social media in general on the wrong side of this trend. I do think most of us want to avoid that war.

However, just as you wouldn't hand a saw to a non-MD congressperson to deal with your broken leg, because it would end really badly (with you legless and dead), you shouldn't hand a virtual saw to any politician to cut up a company.

Doing a divestiture is tricky, particularly when you are dealing with a highly integrated company like Facebook. If you don't know what you're doing, you'll likely kill the firm. If that is the goal, there are far faster and less painful ways to do it. If that's not the desired outcome, then you might want to go back and study the problem you want to solve, and come up with a plan for a cure that doesn't involve killing the patent.

I'll focus this week on how to fix the problem Elizabeth Warren rightly is trying to fix without going about it wrongly. I'll end with my product of the week: a high-end mechanical keyboard targeted at developers, which could be a dream for those who need it.

Warren's Plan to Wipe Out the US Technology Market

Elizabeth Warren is running for the U.S. presidency, and one of her key campaign issues is to break up large technology companies to reduce their power. Don't get me wrong -- large powerful companies tend to misuse that power, which tends to end badly for us and them.

Still, a plan to break them up just because of their size would be like determining that large men were bullies and that to fix that problem all big muscular men should have their strength surgically removed. We wouldn't even do that to folks who made a mistake, but doing it because someone might make a mistake clearly would be not only inhumane but monumentally unfair.

Breaking up a company without destroying it, much like surgically dissecting a body without killing it, is extraordinarily difficult, even when done by experts, and the government is no expert.

If the US government controlled the world, such a plan at least might reduce the risk to consumers -- but it doesn't, and this won't. You see, when you cripple a large company, you create a vacuum in the market that then must be filled.

Given the chance of destruction would apply only to U.S. companies, that means the next too-large company abusing power likely would emerge overseas and generate taxes, revenue and jobs for that other country. The U.S. government would have even less control over it than it had over the firm it broke up.

Over time, Warren's plan would shift the technology market from the U.S. to someplace else. Given current trends, that someplace else likely would be China, which increasingly would control everything we see and hear. That may happen anyway, given current trends, but there is no benefit to speeding up that process.

The Solution Should Follow the Problem

The problem is an imbalance of power between large tech companies and the U.S. government, caused in large part by several things. The first was the combination of budget reductions for congressional research and an increased reliance on lobbyists funded by large companies with their own agendas.

In addition, the U.S. government has become so partisan and divided that it is unable to fulfill its primary function of protecting the nation.

At the same time, some companies have become so powerful that they effectively define their own reality. Facebook comes to mind, and there is credible evidence that its platform changed the outcome of the last presidential election.

Now the plan to fix the problem by crippling companies like Facebook seems to come with no cost, which likely is why it is favored but, the cost in jobs, income taxes, and particularly control should be absolutely unaffordable. That places anything else that would accomplish the same goal with less collateral damage in front of it.

A Better Plan

When you have an imbalance, you either can reduce strength on one side, or increase it on the other. A better plan would be to work on improving the effectiveness of the U.S. government in terms of doing its own research and law enforcement. Now technology can help.

Focused Deep Learning Artificial Intelligence: I personally think that at the heart of the problem with government is the massive amount of false information that surrounds every decision. The information that the government needs as a basis for making decisions is often so massively false that it is no wonder we can't get to consensus. Both sides are led to believe they are right, but neither side is working from the absolute truth.

Current deep learning systems are powerful, but the coming wave of hybrid quantum deep learning systems promise a level of unbiased accuracy that so far has been unachievable. Granted, this doesn't deal with corruption, but for those politicians who aren't corrupt -- who really care not only about doing the right thing but also about doing what is best for their constituents -- this could be a game changer.

Increased Investigative Resources for the FBI: We know power corrupts, so placing investigators inside large companies who would have a dual role of reporting to the firm's board and to the FBI would seem prudent. They wouldn't even need to be undercover, though that would be an option.

They could work for the internal audit department and be part of an assessment process that would ensure a firm wasn't acting against the best interests of the country or its own customers. I propose the formation of a number of specialized teams with the appropriate education and background, which could be called in if a credible threat emerged.

They would be given the goal of identifying and punishing the individuals who misbehaved, while protecting customers and investors who were innocent. Right now, it is often the customers and investors who pay the price for an executive's bad actions, and that needs to change.

Stronger Internal Audits: Internal audit largely has been gutted over the last several decades. The department in most firms lacks the skills, support, investigative power and ability to carry out the mission of enforcing both the firm's ethical rules and relevant local laws.

Ensuring that audit departments were properly staffed, supported and missioned to identify and correct injurious behavior at all levels of a company would go a long way toward preventing companies like Facebook from abusing their privilege.

This would need to be done carefully or it could damage a firm's ability to innovate. However, much of the problem stems from firms doing things like letting a foreign government dictate false news stories, which obviously should be wrong. That is where the focus should remain in terms of limiting behavior, as well as ensuring that punishments are applied to the wrongdoers, not just the subordinates selected as sacrificial goats.

Wrapping Up

I think Warren's heart is in the right place, but she has picked a path that appears inexpensive but actually would be unacceptably costly, because it likely would destroy U.S. dominance in the tech market if it were implemented.

You wouldn't use surgery to address problems humans might have after they abused power, let alone before, because it likely would kill them. The same holds true for companies. Forced divestitures tend to end badly. Look at the original AT&T, Standard Oil and RCA. All were forced to divest, and AT&T and RCA went under. Fossil fuel leadership largely went from the U.S. to OPEC, which, if you recall the fuel shortages of the 1970s, didn't exactly have the best interests of Americans at heart.

The solution should fit the problem, and Warren's plan does not. It should be revised so that it actually could accomplish what is intended -- restoring a balance of power -- and not eliminate U.S. market dominance unintentionally.

Rob Enderle's Product of the Week

I never understood why we ended up with really cheap keyboards. It used to be the things were built really well. Granted, they cost a ton more than the sub-$10 variety we mostly seem to get with a desktop system, but they contribute so much to the experience.

A mechanical keyboard just feels better, and I've often thought that rather than focusing on cost, firms instead should focus on adding functionality. Well, Das Keyboard contacted me about its keyboard, which is designed for people who write -- mostly code, but writing nonetheless.


Das Keyboard 5Q
Das Keyboard 5Q
- click image to enlarge -

The Das Keyboard has a nice weight to it, so you don't end up chasing it across your desk. The keys are mechanical, so they have a solid feel to them without creating too much noise. The keyboard comes with access to apps that can modify what the keyboard's keys do, easily creating hot keys for things like checking your email or the weather.

Das keyboards range from just over US$100 to just under $250. The company sent me the programmer-focused Gamma Zulu RGB LED Switch keyboard to review. The keyboard has a bunch of unique applets for everything from GitHub to Jara, Asana, and more. There is software to manage the keyboard's lighting (a feature common with Alienware notebooks, which I like a lot), as well as a number of other focused features.

This is the first keyboard in a long time that got me to consider replacing my Azio Onyx Retro Classic, which I love, so the Das Keyboard 5Q is my product of the week.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.


Rob Enderle has been an ECT News Network columnist since 2003. His areas of interest include AI, autonomous driving, drones, personal technology, emerging technology, regulation, litigation, M&E, and technology in politics. He has an MBA in human resources, marketing and computer science. He is also a certified management accountant. Enderle currently is president and principal analyst of the Enderle Group, a consultancy that serves the technology industry. He formerly served as a senior research fellow at Giga Information Group and Forrester. Email Rob.


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