Google and Facebook Can’t Count on Consumers Saving Them
But truly, Monday was a noteworthy day. The attorneys general of 48 U.S. states, the District of Columbia and Puerto Rico announced an antitrust investigation into Google parent company Alphabet Inc. For those in need of a civics lesson, that is nearly every possible top lawyer from a U.S. state. The lone exceptions are those from California and Alabama.
The substance of their investigation is not surprising, but when a red-state attorney general from Texas and his blue-state counterpart from the District join forces, you know something weird is happening. Antipathy about giant tech companies may be the single bipartisan issue that can unite people like President Donald Trump and Elizabeth Warren, the Democratic presidential candidate.
Already, the U.S. Department of Justice, the Federal Trade Commission, U.S. congressional committees, Europe’s anti-monopoly authority and a different batch of state watchdogs are looking into whether Alphabet, Facebook Inc. and other tech superpowers are using their influence to unfairly advantage themselves over competitors and give people worse products and services or fewer alternatives. I would call this a laundry list of government investigations into the American tech giants, but no one’s wardrobe is this big.
It’s easy to brush off the announcement by the attorneys general as just another version of the semi-permanent regulatory background noise that won’t materially hurt the tech companies. Google has been through the antitrust investigations merry-go-round for the better part of the last decade, including a long federal antitrust inquiry that ended in 2013 without significant adverse findings.
It’s hard to prove that Google’s mixed track record in state, federal and international legal investigations has hurt its standing with the public or significantly dented a company with an $830 billion stock market value.
What’s different this time is the persistence and volume of these various government inquiries combined with the tech giants’ huge size and the public’s souring feelings about them. That stew of forces could make these fresh investigations sting even if no one finds a smoking gun.
Regulators and particularly elected officials are divining rods of the public mood. Their willingness to poke and prod the tech giants shows they think it’s not just policy makers who wonder whether big tech is too powerful and too unaccountable. The existence of the investigations is another sign that public trust in tech giants isn’t ironclad, and headlines about the investigations or subsequent revelations from them could form a feedback loop that further contributes to the erosion of consumer trust.
That matters for Silicon Valley and beyond because tech companies can thrive only if people trust them. The more people think twice and ask themselves why they’re getting a particular answer from Google, why Facebook thinks they should join a specific online group, why Amazon suggests they buy a certain bath towel, or why they should track health information with the Apple app, the worse it is for tech companies. Those rapidly firing human neurons are not good.
Those kinds of hesitations may happen only on the margins, but the world’s biggest tech companies rely on thousands of seemingly inconsequential choices by their customers. If a small share of people takes a break from Instagram, believes without evidence that Google is squashing the circulation of conservative news or rethinks that once-reflexive weekly Amazon purchase, it could have ripple effects.
It’s both good and bad for Google, Facebook and the others that government investigations can drag on and on. Political winds can shift, and outrage may move to other areas.
More likely, though, America’s tech superpowers will need to figure out how to survive now that they’re regarded not with a special affection by the public but with the same kind of lukewarm-at-best feelings they have about more conventional companies. Big tech, in short, needs to learn to live with the same level of public affection as airlines or banks.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.
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