What’s Missing from The ‘Tech-Lash’: Consumers!
This week, the Justice Department announced that it is opening a broad antitrust probe into whether tech giants are unlawfully crowding out competition. This is another front in the “tech-lash” that has been building for a couple of years. The tech-lash includes concerns about a number of issues, including anti-competitive practices, widespread data breaches, illegal use of customer data, and other examples of poor practices and poor judgment. The tech industry, historically revered, and a symbol of U.S. economic leadership, is now increasingly vilified, and even blamed for increasing income inequality, housing prices, traffic congestion, and yet another poor season for the Mets. Telling friends at a cocktail party you work at Google or Facebook used to bring nods of admiration and some envy…now you’re sometimes put on the defensive.
But this so-called tech-lash still seems to be a largely internecine, intra-industry affair. The bulk of the criticism is coming from those in the game and in the know: regulators, media, analysts, advocacy organizations, and some companies looking to profit from the misdeeds and misfortunes of their competitors.
But what about consumers? It seems to me they are largely missing from the tech-lash. They are not leaving Facebook in droves, crying out for an alternative to Google search, or shopping less on Amazon. They’re not protesting in the streets, writing their Congressperson, or mounting e-mail campaigns. There aren’t emails coming from employers or being circulated among friend groups urging people to change their Facebook or Google privacy settings. In a year where Uber had numerous headline stories about poor executive/corporate behavior, some customers might have switched their loyalties over to LYFT, but the company still grew like a weed.
Ask ten (non-techy) friends whether they’ve changed any of their privacy settings in the past year and I’d bet eight say they haven’t. If you’re at a dinner party, talk might inevitably turn to our fraught political times, the crisis at the border, or how bad the traffic has become. But it’s unlikely anyone will spend much time opining on Facebook’s role in the 2016 election, complain about the duopoly in digital advertising, or express lament that Amazon has disrupted numerous sectors of retail.
Why is this? To begin with, most consumers like these services, despite the repercussions. They might think that the targeted advertising or fake news is annoying, but I’d wager a relatively small percentage believe that it has negatively affected their daily lives in a serious way. A second aspect, and this is certainly true among younger people, is that they understand the tradeoffs. They know that if Facebook, Google, and the like are going to be free, that they gotta make their money from somewhere.
And then, there’s sheer laziness and convenience. Here’s a personal example: it used to be that if I needed to buy new tennis balls, there were three sporting goods stores within three miles of my home in a close-in suburb of Boston. I could bike or take a quick drive over there, supporting a bricks and mortar retailer instead of ordering the new balls on-line. But as a result of Amazon, e-commerce, and the general problems affecting retail, all these stores have closed within the past three years. Now, my choices are to drive out to a strip mall seven miles away, fighting traffic, or to order the same product on-line, through Amazon or Tennis Warehouse, free shipping included – a process that takes about a minute.
I’ll add a final, perhaps less tangible factor. Many of these companies being examined by the DOJ are among the biggest success stories in American innovation in this generation. They’re all U.S.-based. They’re all companies whose products are used, in some shape or form, by a majority of the population. And many of us have profited from these companies’ rising stock prices, whether as direct investments or through index funds or retirement plans. So even though we might get obtrusive ads, read about the horrors of working in an Amazon warehouse, see Apple apps always show up at the top in search, or see a lot of junk stories on our social media news feeds, these companies and their products are intertwined in our daily lives. And most people would argue that these companies’ products and services have made their lives better, in some way.
Believe me, if regulators were going after Ticketmaster for outrageous ‘convenience’ fees, hotels for usurious ‘resort’ fees, or one of the big banks for predatory loan practices, there would be a lot more people jumping on the bandwagon.