ALEX BRUMMER: Big firms like Amazon and Facebook need to be tamed
Mark Zuckerberg appeared two weeks ago before the US Congress
Just two short weeks have passed since Facebook founder and boss Mark Zuckerberg, trussed up in a blue suit and tie, was hauled before the U.S. Congress.
His appearance followed the disclosure that his company had handed the private data of 87 million of its users to UK-based political data-crunching firm Cambridge Analytica.
The billionaire boss apologised several times for the frequent privacy breaches and pledged to put matters right.
Yet he resolutely declined to support new legislation to curb abuses. But then, why should we be surprised?
The Silicon Valley giants Facebook, Amazon, Netflix and Google — known by the vampirish acronym FANGs —steadfastly refuse to be bound by moral scruples.
They can’t be doing with the rules and conventions to tame the wildest extremes of capitalism which, for decades, have been accepted by enterprises across the globe.
In the name of progress and freedom of access to their global community of users, the digital behemoths demand the right to flout every rule. In pursuit of profit and global domination, they show a reckless disregard for systems designed to prevent criminality and unethical business practices, while avoiding paying taxes.
Only this week, a Mail investigation revealed that Amazon and eBay brazenly allow the sale of gadgets which enable car thieves to silently break into sophisticated vehicles by hacking into their electronic locking systems and driving off.
The availability of such devices has eliminated the need to break a window, drill through a lock or bypass the ignition using hot-wiring. And police believe car thefts have soared — up 30 per cent in three years.
Almost as shocking is another story that emerged this week of how Martin Lewis — founder of the advice website MoneySavingExpert and one of the country’s top finance advisers — claims Facebook published fake adverts seeking to cash in on his good name.
Facebook handed over private data of 87 million of its users to UK-based Cambridge Analytica
In his case the social media company may have made an enemy it could do without. The pugnacious entrepreneur has helped consumers in Britain and across the world save millions of pounds in excessive charges on financial products and household utilities.
He is now suing Facebook for publishing dozens of adverts using his image to promote scams designed, he says, to ‘rip off vulnerable people’.
He discovered individuals were targeted with commercials for bogus get-rich-quick schemes which he supposedly endorsed. Lewis says he knows of one woman who lost £100,000 in a scam which temporarily had attached his name to the product to give it credibility.
Facebook’s failure to banish such adverts highlights its ‘unending greed’, he says.
He repeatedly asked Facebook to remove the adverts, he claims, but they were left online for days or weeks. And when they were taken down, another one, almost identical, would appear in its place.
And this, surely is the point. Time and again, individuals, politicians, business leaders and the police have asked the web giants to mend their ways. But they are ignored.
Martin Lewis, pictured, is suing Facebook for defamation after it published adverts which used his image on commercials for bogus get-rich-quick scheme
David Jamieson, police and crime commissioner of the West Midlands, where car theft has soared by 80 per cent, wrote to eBay and Amazon asking them to remove the sale of car-hacking devices from their websites. Nothing happened.
‘The fact that they have yet to respond or take them down means they’re helping criminals,’ he surmised.
The trouble is that, at every turn, the web giants seem to prefer to help criminals rather than inconvenience themselves by limiting untrammelled access on the web.
It required years of enormous media and political pressure to persuade the digital giants and computer manufacturers to make even the slightest concessions towards blocking access to the most vile forms of online child pornography.
Despite incessant demands from the police and politicians to prevent terrorist recruitment online, Islamic State and other militant groups around the world are still connecting with each other, accessing bomb-making advice or buying detonators and other equipment to commit acts of violence.
And, of course, the abuse is not confined to crime.
Many of us have suspected it for years, but the Cambridge Analytica scandal exposed how cynically and blatantly our personal data is harvested for commercial purposes without permission.
Facebook and other social media sites such as WhatsApp (bought by Facebook for £11 billion in 2014) ruthlessly pillage our communications with friends and family to understand our likes and dislikes and pass data to advertisers.
What is so amoral about the behaviour of the web giants is that, despite their endless protestations that they cannot control activity on the web, the reverse is the case.
The same technological brainpower the FANGs use to take personal data and make us fodder for their greed could be directed towards curbing the criminal and intrusive behaviour they facilitate.
The trouble is that these Silicon Valley giants are now so unimaginably wealthy, have such clout and so much job-creating capacity, that they can ignore the demands of politicians and policy-makers all over the world.
Twenty North American cities — from Toronto in Canada to Austin, Texas — are currently engaged, for example, in a tawdry battle to be home to a second vast technological headquarters for Amazon.
With the promise of $5 billion of investment to create 50,000 jobs, local politicians are falling over themselves to woo the web giant — and in such circumstances, who would dare raise the issues of tighter regulation or stricter taxation rules? Likewise, in Britain an open-door policy for Google at No 10 when David Cameron was Prime Minister almost certainly helped persuade the company to build magnificent European offices at King’s Cross in London which will eventually employ up to 9,000 people.
Is it any wonder, therefore, that it has taken HMRC so long to get its teeth into alleged tax avoidance by the company and others like it?
The extraordinary economic firepower which makes each of the digital giants unassailable has just been quantified by the International Monetary Fund.
In 2017, sales of smartphones, the device of choice for online access, reached 1.5 billion units or one for every fifth person on Earth. Indeed, smartphones accounted for one-sixth of total world trade last year.
Amazingly in Ireland, where Apple houses its intellectual property (the patents and know-how behind the iPhone), exports related to the phone accounted for one-quarter of the country’s economic expansion last year.
That is why the Irish government objected when the European Commission — one of the few institutions trying to take on the web giants — gave Apple a £11.2 billion tax bill.
So far, American politicians, like our own, have failed to show steel in the face of companies which, in their search for profits, have gone rogue, abandoning any pretence at ethical business practices.
But there is a precedent for doing so.
In the late 19th century, there was a giant company which the whole world thought was unassailable, so big and powerful was its size, scope and virtual monopoly. At the time, J. D. Rockefeller’s Standard Oil controlled 90 per cent of the U.S. oil market.
Critics accused Rockefeller of engaging in unethical practices, such as predatory pricing and colluding with railroads to eliminate his competitors.
But the U.S. President Teddy Roosevelt had the resolve to take it on. He used legislation to break it up into 34 separate companies and reduce its monopoly power.
If only today’s policy-makers had the same gumption.