Facebook, Google, and Twitter have faced withering questions and remarks this week on Capitol Hill over Russia. The gauntlet isn't over and, even when it is, there's a good chance the companies will face enough bipartisan political will to impose regulations on how they operate.
The trio of Internet giants -- and many others in tech -- have tried putting off this day. They have upped their lobbying in D.C. Whether looking for increased immigration for technical talent, controls through net neutrality on telecom carriers, or regulations favorable to the gig economy, they've all been looking for favorable treatment of their business interests, which is hardly unusual. But between trying to force the limits on regulatory restrictions or just operate as though general laissez-faire capitalism actually existed, the newcomers are finding what some older companies like Microsoft and IBM learned long ago: eventually government might say enough is enough and slap a company down.
Regulators and government officials have been wary of technology for years. They generally don't understand it but have a sense that someone is getting away with something at their expense. The distrust can turn ugly. Microsoft found itself on the wrong end of an antitrust action that badly shook up the company back in the 1990s. In 1998, IBM faced its first ever criminal conviction over unauthorized computer sales overseas.
The destination was Russia.
Business doesn't operate in a vacuum. The long history between the U.S. and Russia (back when it was the head of the Soviet Union) -- one-time enemies during the Second World War and then allies, and then enemies, each seeking geopolitical power at the other's expense -- is not something that can be ignored. Beyond the rivalry, domestic fears of communism and their coldly political manipulation -- a driver of many disasters including the McCarthy era and involvement in Vietnam --added a sense of existential threat to that part of international relations.
That's a long way of saying that companies can't blithely do business with Russian entities and assume it's all a part of globalization. But Google, Facebook, and Twitter -- which are really media companies, no matter how often they say they're purely tech firms (because the latter get higher valuations from Wall Street) -- have failed to appreciate the nuance. They still do, sending corporate lawyers and not their CEOs to testify before Congress. Even big banks have recognized that sometimes you send in the chief executives to be roasted over the coals because then officials have a sense that you take them seriously. The comments from some powerful senators, as reported by Variety (not media companies, eh?) should have made that clear even to the frequently tone-deaf tech community:
Sen. Dianne Feinstein (D-Calif.), a member of the Senate Intelligence Committee, told the companies, "I don't think you get it."
"You have a huge problem on your hands. ... You bear the responsibility. You created these platforms and now they are being misused."
She added, "You have to be the ones to do something about it, or we will."
Even some Republicans, who want to avoid appearing to say that Russian influence was thrown to Donald Trump, found ways to drive home the problem the companies had. Senator Richard Burr (R-NC) pointed to Russian-connected accounts that promoted two sides of a potential conflict, one saying that Texas should secede from the Union and that the "Islamization of Texas" should end, and the other calling to "save Islamic knowledge" in the state.
The trio of companies appearing before Congress has said, under a brief respite of relatively friendly questioning, that there are limitations to what they know about the companies advertising on their platforms.
And yet, the protestations ring hollow. Even as nearly 150 million Americans were exposed to material from the so-called Internet Research Agency, a reportedly Russian-backed trolling operation, extensive details of each of the 150 million, and many more, were known to the companies. They make their money by having so much data on individuals and companies that they can offer specific targeting by many characteristics. Capabilities that the Russian trolls used in placing their ads.
So, was it that they couldn't tell something was odd about these "advertisers? Or that they didn't care because it was more money brought in by the automated systems that allow them to operate at low cost, driving profits? They certainly seemed able to come up with lists of ads and questionable accounts when they had to.
The Internet-based sub-sector has yet to learn the hard lessons older tech companies have. There's a real gap between regulation and technology, given the different rates of speed at which both operate, certainly. But tech companies often want to ignore regulations and do whatever they want, all while claiming that they support diversity (although not so much when it comes to hiring and promoting, as statistics over the years show) or that they wish to avoid doing evil (other than allowing fictitious figures to place ads for questionable ends).
Companies can't operate forever as though they were robber barons of the Industrial Age -- particularly as they see record revenues as Facebook just did. Eventually you step over a line that you've ignored, one that others with considerable power can't, and the industry has talked of largely empty self-regulation on one front or another for years. Politicians are unable to say that surreptitious Russian influence in the U.S. is acceptable. Doing so would kill their careers.
By acting as though they're not media companies and that the issues aren't perceived as serious enough to warrant the appearance of their CEOs, these three companies have opened a door that they and other tech companies have tried to keep blocked. The question of regulation is on the table in a way that it never had been before. In the current political climate, it will take an intense effort, and lots of spending, to provide something that seems like a fix. And if that doesn't happen quickly enough, there will be immense pressure to put legal requirements into place (especially with another election year coming around). What are the companies going to do, say no and wait to be branded as un-American?
Once that is put into place, the way has been cleared for more regulation covering many things that tech companies swear will undermine their businesses. But if the protestations have seemed overblown and even without basis in one case, they probably will in the others.