Big Tech Has Exerted Its Power. Now What?: The Information's Weekly Newsletter

Happy 2021. It was not the start to the year that any of us would have hoped for, but I hope that you all found ways to reflect on what the new year could mean for you and your families and that it brings you all good health and happiness.

I’m beginning the year grateful for the health of my family and excited for The Information’s goals in the months ahead. As a startup founder on a constant journey of learning, I feel just a little more prepared for each and every year. And while I’m sure I will be inevitably blindsided by many things in 2021, our road map for new features and new content has never been more robust or ambitious. I’m excited to bring it to you all.

We have continued to add speakers to our amazing lineup at our Future of Startups conference February 4th. I am very excited to hear from the co-founders of Substack, the CEOs of Cameo, Carta, OpenAI, Mirror, Expensify and many others, including preeminent and prescient investors like Forerunner’s Kirsten Green.

This week, I particularly enjoyed Kate Clark’s profile of Chime, including an interview with the CEO. These days in fintech Stripe gets a lot of love and buzz. That’s a function of its incredible business growth and the fact that many tech companies use it to accept payments. Chime became the most valuable U.S. digital bank by targeting users who felt duped by the existing financial system, offering them a no-fee debit card. And now, valued at nearly $15 billion, it’s ready to do even more ahead of a potential IPO, as the piece reveals.

Speaking of IPOs, don’t miss the latest on how BuzzFeed could hit the public markets from Ross and Jessica.

What Will and Won’t Destroy Big Tech

The horrific events at the U.S. Capitol this week represented a tragic low point in our nation’s history—and the high point of the power of technology platforms over speech. On Friday, Twitter banned President Donald Trump from using the service and wiped away his Twitter history. Facebook earlier indefinitely banned him, and Snap locked his account. As our Nick Wingfield tweeted, “Does he still have two-day shipping?”

All joking aside, this is a significant moment. After many have called for the platforms to rein in or remove Trump for years, most have finally decided to, and I share the widespread view that these steps were necessary to protect democracy.

I’m also stuck thinking about the incredible power these companies exerted in censoring the President. And while many are cheering this power now, as it was necessary, it is clear these moves will reignite calls for that power to be checked.

Some may think that a slapdown is in sight. After all, the Senate has swung to effective Democratic control. Some of the most vocal critics of the tech companies in that party may feel they have an opening to legislate meaningful change, perhaps by wiping out these companies’ immunity for content on their services, limiting how they can use customer data and rewriting antitrust laws.

I’m all for new regulation on tech, especially when it comes to content moderation, which is too important to be left to an uneven set of rules across the various companies. When it comes to antitrust matters, I think it is very important that the markets remain competitive enough to allow for new entrants, but I don’t yet have a clear opinion on what remedies might be necessary.

But in both instances—new laws and legal cases—I think the most likely outcomes will be incremental.

Whether through the Justice Department or Congress, the government’s paths to regulation are very slow and incremental. The government’s big antitrust case against Google isn’t likely to go to trial until 2023. Facebook’s fight with the Federal Trade Commission, which sued it late last year, will be similarly prolonged. I think a breakup in either case is highly unlikely. What’s more likely is that these companies will have to jump through new hoops that do little to actually change their role in society and how they see that role.

Silicon Valley Hates Silicon Valley

Outside Washington, D.C., and Brussels, there’s another front of big tech criticism that it is important to watch: Silicon Valley itself. A growing hotbed of anti-tech sentiment in the region easily rivals or eclipses Washington’s animosity.

You see it in the Alphabet employees who announced a union this week, demanding a say in the company they work for. You see it in the Facebook employees’ repeated questioning of their leaders’ decisions, the latest example of which Alex reported this week.

You see it in the exodus of technology executives to other parts of the country; they are fleeing California’s high taxes but also the sense that everyone who works in tech hates them.

You see it in the attacks the most powerful people in tech are making against each other, from Elon Musk’s digs at Facebook to the war raging between Facebook and Apple—nominally over privacy, but really about power.

Where this anti-tech movement will go is unclear. In some ways, it is still marginal. As of earlier this week, the new Alphabet union had signed up 400 employees and contractors out of hundreds of thousands total. Yet I can’t shake the idea that it could do as much to change the direction of these companies as regulation could—or even more. Tech companies are their talent, plain and simple.

Beyond the possibility of regulation or defections of employees, I think the most likely thing to truly upend current tech power structures is competition.

Last year, I finally finished reading Ron Chernow’s great book “Titan” about the life of Standard Oil founder John D. Rockefeller Sr. It seemed there was no better time to freshen up on the fate of business empires of the past and what ultimately contributed to their downfall. As we all know, the government ultimately broke up Standard Oil. It’s a case study no shortage of tech critics like to refer to today.

But Chernow also clearly highlighted the true culprit of the oil and gas empire’s downfall: electricity. In other words, it was competition.

For those worried about tech power, I do believe brighter days will come, but not if people don’t go and build them.

Upcoming Events

*Updated*: February 4, 2021: The Information’s Future of Startups: Lessons for Next-Gen Disruptors (daylong virtual conference)

September 22 and 23, 2021: The Information’s 2021 WTF: Women in Tech Media and Finance Conference

This Week's The Information Articles:

• The Information’s Tech IPO Lockup Calendar by Ross Matican
• Why TV Advertising Won’t Recover What It Lost in 2020 by Tom Dotan
• How a Google Deal Put a Small Security Company on the Map by Kevin McLaughlin
• Cameo to Seek Funding as CEO Eyes Expansion by Alex Heath
• Hinge Health Valued at $3 Billion by Tiger Global, Coatue by Kate Clark
• Alphabet Union Sparks Interest From Workers Across Tech in Organizing by Tom Dotan
• Grab’s Fintech Unit Raises $300 Million As Asia’s Tech Wars Intensify by Juro Osawa
• After Capitol Violence, Some Facebook Employees Call For Ban of Trump by Alex Heath
• How $14.5 Billion Chime Proved Silicon Valley Investors Wrong by Kate Clark
• Pay Equity Startup Raises $17.1 Million in Round Led by Bessemer by Nick Wingfield
• Hipcamp, ‘Airbnb of the Outdoors,’ Raises $57 Million by Cory Weinberg
• Big Tech, Already in the Hot Seat, Faces New Threats From Democratic Senate by Christopher Stern
• BuzzFeed Has Held Discussions With Rascoff’s SPAC by Ross Matican and Jessica Toonkel
• WarnerMedia Extended AWS Deal to Win Key HBO Max Concession by Jessica Toonkel
• The Information’s 411 — Googlers of the World, Unite! by Tom Dotan
• Big Tech Has Exerted Its Power. Now What? by Jessica E. Lessin