Silicon Valley will be a target from left, right and center in 2019

There's no sugarcoating it: Big Tech has had a tough 2018. Reports of malign activity on tech platforms and ...

Posted: Dec 27, 2018 9:15 PM
Updated: Dec 27, 2018 9:15 PM

There's no sugarcoating it: Big Tech has had a tough 2018. Reports of malign activity on tech platforms and user data being shared inappropriately have emerged almost daily over the past 12 months.

We started the year with new indictments by the Justice Department's special counsel Robert Mueller, who charged Russian affiliates of the Kremlin with interfering with the 2016 US presidential election through social media platforms.

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That was swiftly followed by revelations that Cambridge Analytica, a digital-political consulting firm engaged by the Trump campaign, had gained access to Facebook data associated with 87 million users, most of them American voters. Since then, there has been an avalanche of news of privacy incidents, security breaches, governmental inquiries and corporate missteps on a near-weekly basis.

There are no signs of it letting up as we head into 2019. In fact, if anything, things are only heating up. It's a reality that does not bode well for the industry; the very future of the companies and their leaders are at stake as they play whack-a-mole just to keep their corporate reputations -- and stock prices -- afloat. So, what will be the top five tech challenges to emerge in the coming year? Here are the ones we anticipate being top of mind in 2019:

1. Newly empowered House Democrats will focus on the disinformation threat.

The first challenge begins on Capitol Hill: Concerns about hostile actors using modern communications platforms -- and about tech companies' inadequate and at times shameless responses -- shouldn't be defined by partisan politics. But this year has made it resoundingly clear that key Republican decision-makers in the House -- most notably outgoing Intelligence Committee Chairman Devin Nunes -- have avoided pressing on these issues, lest doing so call into question the validity of Donald Trump's presidency. And they've been increasingly reticent to dig as it has become even clearer that Russia's internet-based disinformation campaigns were designed to boost Trump's chances of winning the 2016 presidential election and diminish Hillary Clinton's.

But in January Democrats will become the new majority in the House, giving them critical oversight authority including the capacity to call hearings and issue subpoenas. Democrats won't be dissuaded by the same partisan concerns illustrated by their Republican counterparts. We can expect -- and indeed should hope -- that the incoming chairs of the House Intelligence, Homeland Security and Commerce committees, among others, begin to press seriously on the technology industry's failure to address the disinformation threat.

2. Trump and his supporters will renew their attacks on tech companies for purported political bias.

The second major policy challenge the tech industry will face comes from the other side of the aisle in Washington -- from Trump and his administration, who have consistently voiced their claims about purported anti-conservative bias from leading internet platforms. The groundwork was laid with a recent attack by congressional Republicans on Google's CEO during his testimony on the Hill, and the assault on the supposed anti-conservative bias has become an escalating theme of Trump's tweets.

Now, with added impetus to find his own angle of attack against tech companies and to stir up portions of his base that resent tech companies' suspending the likes of Alex Jones, Trump seems likely to escalate his attacks on those companies for what he insists is their anti-conservative orientation. Do Republicans have a valid point? Likely not, as one of us recently made clear. But the consistent, passionate diatribes coming from the GOP over such purported bias -- in combination with Democrats' nascent interest in considering regulation to protect consumers and electoral integrity, among other vulnerabilities -- suggest strongly that Silicon Valley will come under fire from policymakers of various stripes in Washington in 2019.

3. The media will keep hunting for stories on Big Tech and its missteps.

Dangers lurk for Big Tech not just on the Hill and in the White House but also in the fourth estate. The third anticipated challenge stems from how swiftly mainstream media has warmed to a new genre of journalism that might be called "tech exposé."

Major journalistic outlets such as The Washington Post, The New York Times, CNN and Bloomberg have demonstrated their investment in journalists with the expertise, sources and time to uncover various concerning developments in and around Silicon Valley. And now a new nonprofit called The Markup is launching, dedicated exclusively to unearthing stories about the tech sector.

All told, there's a tremendous appetite and an increasingly robust infrastructure for strong investigative journalism that ferrets out the most salacious secrets of Silicon Valley, from its invisible algorithms to its data-sharing partnerships to its cutthroat personalities to its backroom politics. That's sure to yield continuing -- and likely escalating -- media inspection in the year to come.

4. Tech stock prices may stay down.

A fourth major challenge for the sector -- and perhaps the one that will directly affect Americans the most in 2019 -- will come from Wall Street: Tech stock prices have been falling, and falling hard. It's not clear that they'll regain their losses any time soon.

At least for the most profitable tech companies such as Alphabet, the parent company of Google, worth three-quarters of $1 trillion and Facebook, worth nearly $400 billion, dealing with angry members of Congress, a ranting President and a hostile press has been easier when investors are reaping rewards in the form of higher stock prices.

That helps to satisfy shareholders and board members, and also allows the companies to deal with persistent complaints by throwing resources at the problem, such as by announcing thousands of new jobs to be filled by content reviewers. But if stock prices stay down or, worse, continue to fall, the pressure from boards, shareholders, the investor community and the public will mount. At that stage, attempting to address the harms to the American public facilitated by modern communications platforms by simply allocating more resources will no longer be feasible, and these companies may have to experiment with the types of bolder approaches to which they've often proven reluctant thus far.

5. Users will continue wising up.

Fifth, there's a broader constituency that may pose an escalating challenge to Big Tech in 2019: its user base, in America and globally. Internet users are increasingly aware of what's being done with their personal information, including it being sold, either directly or indirectly, for purposes of microtargeting by advertisers and political campaigns. They're also increasingly aware that the privacy protections offered by tech companies aren't always proving reliable, even if others' malfeasance is technically the most direct target to blame, as in the Cambridge Analytica scandal.

This growing awareness may explain the signs that, at least for some platforms, the number of users has stopped growing and may even be diminishing. And it surely explains Europe's political will in passing a landmark privacy law. Even if similar legislative will may not yet be found in Washington, users are nonetheless likely to be more and more vocal about the handling of their personal information. And that may ultimately affect how many use leading platforms, how much they use them and for what -- all with potential consequences for tech companies' bottom lines.

So, stay tuned for what awaits Big Tech -- and all of us -- in 2019. From Congress, the White House, the press, Wall Street and the global internet-using public, there may be some challenging days ahead.

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