‘We Can Pass Laws That Make Being Anti-Privacy Unprofitable’
By Jeff Benson
Second of three parts.
Technologist and author Cory Doctorow doesn’t buy the argument that we can’t regulate Big Tech because they’ll move overseas.
In today’s Digital Privacy News interview, the second of three parts, he said that U.S. laws allowed monopolies to expand across the globe, that changing those rules were “politically difficult” and that companies only cared about privacy if they could profit from it.
You mentioned AT&T being afraid of global competition. Now you have companies taking advantage of a globalized economy. They’re putting servers abroad and moving to other countries to avoid laws, avoid taxes.
Let’s just say legal or tax arbitrage. Yeah.
Your main plan of attack is breaking up monopolies. What would the strategy be for working with other countries to make sure that these companies can’t avoid regulation?
I think that, again, the frame is slightly off.
“The reality is (monopolies) cheated — and then they bribed someone to let them cheat. The person they bribed is a cheater — and the money they got from cheating is here.”
Monopolists get away with what they do because of the rules here, not because of the rules somewhere else.
The reason that we allow Apple to maintain the fiction that all of its money is orbiting the Irish Sea and never making contact with any tax jurisdictions is because Apple has — and other big companies engaged in these tactics have — lobbied for IRS rules that give that fiction the power of law.
The IRS could change those rules.
It’s not like Apple lacks assets. In fact, it’s not even like Apple lacks onshore assets.
You know what they do with that money that’s stashed offshore? Buy T-bills. That offshore money is T-bills.
It’s literally just in an account at the Treasury. At the Federal Reserve. All of that so-called offshore money, it’s ledger entries in the Federal Reserve.
So, it’s not even offshore money. It’s not like it’s really in the Irish Sea. It’s really in a database in Washington and in St. Louis.
The more important question is, why do we let them maintain this fiction? The answer is that they cash in some of those T-bills and give them to campaign finance. And lobbyists.
That’s why they get away with it.
There’s a lot of obfuscation when people talk about this. And that’s why it takes a long time.
Facebook can “resist a lot of legislation (because) it maintains the fiction that a lot of the things that we want them to do are just technologically impossible.”
Yes, they use a lot of funny words when they talk about their financial position, use financial jargon.
The reality is they cheated — and then they bribed someone to let them cheat. The person they bribed is a cheater — and the money they got from cheating is here.
So, the question of: “What do we do if we break up monopolists, and they decide that they’re going to move to Ireland? Or Liechtenstein? Or the Cayman Islands?”
It’s: “Oh, it’s easy what we do: We seize that billion-dollar headquarters they built in Cupertino — and we move all the money from their ledger at the Federal Reserve, from their account, to the people’s account. We invalidate all their patents and nationalize them. We issue subpoenas for the data on onshore servers — and we force them to turn it over and delete it. We issue injunctions regarding their conduct in the U.S.”
Now, those are all politically difficult to imagine.
They’re not logistically challenging. And so, again, the wrong frame is, “What do we do to avoid them playing arbitrage?”
There’s an iterative process, because the reality is going to be more like we pass some anti-monopoly laws, the firms do some stuff in response.
We pass more anti-monopoly laws — and, probably, we pass more anti-monopoly laws, because the public gets outraged.
Because the normative intervention that you and I are making now, where we are telling the story of why monopolies are wicked and should be controlled, outrages the public when monopolies evade those controls.
With Apple, “It’s true that they are pro-privacy, when it comes to marketing. It’s just not pro-privacy when it comes to keeping Uighurs out of concentration camps.”
And, so, the public makes demands. The politicians then have the political capital to put those demands into action.
That results in more anti-monopoly laws, which changes the range of tactics they can productively engage in, which makes the things they do much more egregious, which creates more space for public disapprobation — because the actions are much more obviously bad, because the rules are changed so that they have to do things that are much more obvious to get away with it.
Until, one piece at a time, we break it down.
It’s that whole thing from (President Franklin Delano Roosevelt), when the activists visited him on the eve of his inauguration and told them what they wanted, and he said: “I want to do it. Now, make me do it.”
We will make politicians do it by giving them the political capital. And the politicians will allow us to make them do it by creating policy.
And we will go back and forth in this iterative way. And, on the way, we’ll get other things — like people will start rival businesses, (small and micro enterprises), that have customers who love what they do — who will be really angry about monopolists, right, like the players of Fortnite were really angry about the App Store.
And they will involve the investors and other entrepreneurs to found businesses that, likewise, create these stakeholders for more pluralistic, less-monopolistic policies.
Technologists will make the tools that will change people’s perception about what is possible.
So, people will know that they can demand more.
People will make a Facebook that doesn’t violate your privacy. And it may not have that many users, because people are going to choose Facebook — because all their words are being held hostage there.
But once we see that it’s technologically possible, then you could imagine a law that says, “Facebook must behave in this way.”
Corporations “don’t have ethical positions. They just ascend a gradient towards higher profit.”
One of the things that allows Facebook to resist a lot of legislation is that it maintains the fiction that a lot of the things that we want them to do are just technologically impossible.
So, once we can see that they’re technologically possible, we open up the policy space and the virtual space — and we’ve changed the normative framework.
This is the iteration I imagine, this interplay between norms, and market, and law, and public that goes back and forth — each one opening a little space for the next.
Speaking of Facebook, you noted that Facebook started as a pro-privacy alternative for social networking. Was Facebook making a disingenuous pitch to consumers, or did the marketplace corrupt it?
Oh, I think Facebook’s pitch was: “We believe that the market demands privacy, so we will give privacy, but when commercial conditions change, we’ll take it away, that our commitment to privacy was genuine but not ethical.”
It actually was: “We will genuinely do the thing to the extent that we think you want us to, but if we think we can get away with not doing it, well, then we will.”
I think that’s exactly Apple’s position, too. Apple has this, “We are the pro-privacy alternative to Big Tech.”
It’s true that they are pro-privacy, when it comes to marketing. It’s just not pro-privacy when it comes to keeping Uighurs out of concentration camps.
“Where there’s higher profit to be had in being pro-privacy, they will be pro-privacy. And where there isn’t, they won’t.”
If you were ethically committed to privacy, right, if it was beyond the pale to endanger users’ privacy — and that’s why you didn’t do it — then it wouldn’t matter why you were being asked to invade your users’ privacy.
You just wouldn’t do it.
But for Apple, the cost of doing business in China, of manufacturing at Foxconn and selling to Chinese consumers, was to remove all of the working VPNs from its App Store so that the Chinese government could figure out who to put into concentration camps.
And it did it. Because it was a commercial calculation.
It was like: “We can differentiate ourselves in the market by not raiding your data for advertisement. So, we will. But not because we think privacy is something that’s important to preserve.”
So, privacy is a secondary consideration?
Companies don’t think of anything except they should have more money. That is the only imperative company problem. That’s the fiduciary duty of shareholder capital. Companies will or won’t take action based on that.
They’re immortal colony organisms that use humans as inconvenient gut flora, right?
They don’t have ethical positions. They just ascend a gradient towards higher profit — and where there’s higher profit to be had in being pro-privacy, they will be pro-privacy. And where there isn’t, they won’t.
That’s why it’s important to have an environment in which we have enough democratic, regulatory control over firms that we can pass laws that make being anti-privacy unprofitable.
That’s the only way we’re going to get firms to respect our privacy: If it’s not profitable to be a spying company.
Friday: What consumers can (and can’t) do to fight back.
Jeff Benson is a Nevada writer.
Sources (external links):