It is insufficiently recognised just how much the pendulum has swung against Silicon Valley in recent years. A couple of years ago, it was widely seen as heralding a glorious new technological era that would be a great boon for humanity. Today it is often viewed as a purveyor of fake news, an infringer of privacy and a destroyer of traditional business models.
Of course the shift is not absolute. New technology still has its fans and in the past it had its critics. But the balance of the argument has moved in the opposite direction.
Internet platforms such as Facebook and Google (now Alphabet) are the targets of particular ire. Influential figures from across the political spectrum accuse them of disseminating hateful ideas and blatant untruths. The charge is not that they are the ultimate source of such malign information but that they should take more responsibility for regulating it.
Such discussions lead inexorably to calls for greater external control. Many argue they should be treated more like a publisher (with some responsibility for the content) rather than a phone company (which is not responsible for the content of conversations on its network).
Internet companies are also accused of directly infringing on individual privacy. The huge amount of information they collect on users is widely seen as a cause for concern.
The EU’s response to such concerns includes the General Data Protection Regulation, which will come into force next year. This is an update on the previous regulatory framework and focuses on the regulation of data held on individuals.
Outside of search engines and social media there are concerns that companies in the gig economy are undermining traditional businesses. Uber, for example, offers good value for passengers but its critics argue that it exploits its drivers and puts its passengers at risk. Transport for London, the body responsible for the UK capital’s transport system, has informed Uber that it will withdraw the firm’s operating licence. The taxi operator is appealing the decision.
No doubt some of the charges against Silicon Valley have some basis to them while others are more questionable. But the drive to tighten regulation should be treated warily. Measures that are not thought through could easily have the unintended consequences of stifling innovation and damaging the public interest.
In the context of FANG stocks (Facebook, Amazon, Netflix and Google) making up such a large proportion of US stockmarket capitalisation this could hurt financial markets. The pendulum swinging against Silicon Valley could prick what looks like a new market bubble.
Daniel Ben-Ami, Deputy Editor