America’s tech behemoths are facing a reckoning that, most recently, spurred new antitrust probes by a bipartisan group of state attorneys general into Facebook (FB) and Google (GOOG, GOOGL).
In a newly released interview recorded before that news came out, Yahoo Finance Editor-in-Chief Andy Serwer asked PayPal Co-Founder Max Levchin whether he believes tech giants like Google and Facebook have become “too powerful.”
“They're certainly extremely powerful in the absolute sense,” said Levchin, a computer scientist by training who went on to become a serial entrepreneur. “Like, yes, Facebook probably knows far more about me than I think I know about me — and that I think anybody should know about me, really because they're an amalgamation of all my friends' knowledge of — of me.”
Levchin made the comments during a conversation that aired in an episode of Yahoo Finance’s “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment. His observations about Facebook and Google come as big tech faces unprecedented scrutiny and fines that some say still don’t go far enough.
In July, the Federal Trade Commission (FTC) smacked Facebook with a record-breaking $5 billion fine over its collection of user data. The FTC probe was prompted by reports in March 2018 that Facebook had allowed a consulting firm with ties to the Donald Trump presidential campaign to harvest users’ data without their consent — a scandal now known simply as “Cambridge Analytica.”
For its part, Google was hit with its third billion-dollar antitrust fine in Europe in March. And just this week, the FTC hit Google with a $170 million fine for violating kids’ privacy on Google-owned YouTube.
‘You’re playing with the human condition’
In his interview with Yahoo Finance, Levchin said Facebook and Google have “enormous” responsibility because of the vast amounts of user data at their fingertips. Levchin, who previously worked at Google as vice president of engineering, said the search giant knows even more about users than Facebook.
As Yahoo Finance’s tech editor, Dan Howley, has noted, Google knows every place you’ve been if you have location history turned on. It also knows everything you’ve searched on YouTube and likely everything you’ve searched online — which, as Levchin pointed out, often sheds light on the person searching for that information.
“During my time at Google, I met an executive who likened Google search box to an ear, where it's the world's giantest ear,” said Levchin, who is 44 years old and currently CEO of fintch company Affirm. “And billions of people come in and whisper into its ear, you know, amazing things, like where do I buy an engagement ring? And, also, do I have cancer? And will I die?”
The first thing tech companies should do, Levchin said, is to recognize the human beings on the other side of the services they provide.
“You're playing with the human condition more than you're playing with the balance sheet,” Levchin said. “So my guess is the first thing they need to do is probably recognize internally, and sort of take very, very seriously, that what they're playing with is a lot more than their profit and loss and features. And ... that's a weighty, weighty set of responsibilities.”
The responsibilities of tech companies may grow as regulators continue to crack down on them. Facebook is facing yet another FTC probe, and the Justice Department is looking into possible antitrust violations at online platforms that likely include Apple (AAPL), Amazon (AMZN), Twitter (TWTR), Facebook, and Google.
“My guess is they're going to end up facing a lot of regulatory scrutiny, because our lawmakers — and others — are pretty good at dealing with the human condition and thinking in terms of the human condition,” Levchin said, “while tech companies are actually much better at thinking in terms of growth and features, and kind of detaching themselves a little bit from what people really experience when they use their product.”
Erin Fuchs is deputy managing editor at Yahoo Finance.
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