There was barely a news bulletin last week that didn’t feature a report from the World Economic Forum at Davos, attended by many of the world’s leading and political leaders. The headlines were dominated by meetings between Prime Ministers and Presidents, including Trump and May, and there’s been near saturation coverage of a rare one-on-one TV interview with the Donald himself. It would’ve been great to have seen someone like Paxman give him a thorough going over, but sadly the oily Piers Morgan managed to get the gig from his ‘good friend’ leading to some fairly predictable gentle probing with a heavy dollop of sycophancy.

One of the more interesting speeches of the week came from George Soros, one of the world’s leading investors who made a billion when he predicted the black Wednesday crash in ’92. He has since become one of the world’s biggest philanthropists donating 18 Billion dollars, predominantly supporting liberal political causes. He expressed his views on the current state of the world, threats to democracy, his fears of where the power that Trump and Kim Jong Un wield might lead to given North Korea’s nuclear threat, extremism, and the implications of all of these for open society. Despite all these serious issues, the bulk of his speech focused what he considers another global problem - ‘the rise and monopolistic behaviour of the giant IT platform companies’.

He started by comparing Facebook and Google to oil and mining companies that exploit the physical environment and that social media companies exploit the social environment, and he warned about the risks of where this leads:

“This is particularly nefarious because social media companies influence how people think and behave without them even being aware of it. This has far-reaching adverse consequences on the functioning of democracy, particularly on the integrity of elections.”

Historically, social media companies haven’t taken responsibility for the content they publish as they claim they are just distributing information, but the near monopolistic control they have makes them public utilities, argues Soros, and should subject them to more regulatory  controls. Somewhat belatedly, and presumably to defer or dilute such measures and in response to criticisms from major advertisers, Zuckerberg has recently made changes to the way Facebook feeds news to users and promised to hire 10,000 people to monitor for dubious or dangerous content from the likes of extremists and peadophiles. Because they don’t pay for the content on their platforms it makes them exceptionally profitable, but their business models are based primarily on advertising - between them Google and Facebook effectively control half of all internet advertising. Soros contests that they’ve evolved into selling products and services directly to users:

“They exploit the data they control, bundle the services they offer and use discriminatory pricing to keep for themselves more of the benefits that otherwise they would have to share with consumers. This enhances their profitability even further – but the bundling of services and discriminatory pricing undermine the efficiency of the market economy. Social media companies deceive their users by manipulating their attention and directing it towards their own commercial purposes. They deliberately engineer addiction to the services they provide. This can be very harmful, particularly for adolescents. There is a similarity between internet platforms and gambling companies. Casinos have developed techniques to hook gamblers to the point where they gamble away all their money, even money they don’t have.”

He believes that this control is having an impact on society not just at a low level in terms of distraction, or even more significantly as a form of addiction, but that it’s actually affecting people’s freedom of thought and autonomy as the power to shape people’s attention is held in the hands of a few. Social media users are not getting a balance of opinions from other sources, indeed the rise of social media is seen as the major factor in the decline of journalism and all the editorial comment and opinion that goes with it. The effects of this can already be seen in the outcome of the 2016 US presidential elections.

Soros theorized on where this might lead if these large data-rich IT monopolies, which know so much about us and use that data to manipulate us, combined with state sponsored surveillance. He sees evidence of this in Russia and especially China where Alibaba and Renren are as large as their American counterparts but also enjoy the full support of their government. He believes that the likes of Facebook are being tempted to compromise themselves in order to enter these vast and growing markets and that the dictatorial regimes in these countries may choose to collaborate to further control their own populations and to expand their influence in the US. Whilst these predictions may sound positively Orwellian, it’s gradually emerging how big a role Russia played in getting Trump elected with its use of Facebook. The domination, power, wealth and - to some extent – arrogance of these monopolies is seeing a significant shift in attitudes at all levels and Soros believes that taxation, initially, and regulation, ultimately, will be their undoing.

“The internet monopolies have neither the will nor the inclination to protect society against the consequences of their actions. That turns them into a menace and it falls to the regulatory authorities to protect society against them.” Comments Soros.

 The EU has started to clampdown, largely because the platforms aren’t European owned and, in the US, they carry enormous political influence with Google alone spending $18 million lobbying politicians and Amazon buying the Washington Post to influence opinion. The European Union also uses a different definition of monopoly power. In the United States the focus is on monopolies created by acquisitions but EU law prohibits the abuse of monopoly power regardless of how it is achieved and Europe has much stronger privacy and data protection laws than America which it is currently enhancing with the new GDPR regulations. Soros is also critical of the attitude of law makers in America:

“US law has adopted a strange doctrine: it measures harm as an increase in the price paid by customers for services received – and that is almost impossible to prove when most services are provided for free. This leaves out of consideration the valuable data platform companies collect from their users. Commissioner Vestager is the champion of the European approach. It took the EU seven years to build a case against Google, but as a result of her success the process has been greatly accelerated. Due to her proselytizing, the European approach has begun to affect attitudes in the United States as well.”

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