The Rising Political Power of Silicon Valley
Introduction
In 2017, Denmark became the first nation to appoint an ambassador to Silicon Valley, mandated to represent and advocate for the country’s technology interests at corporations like Facebook and Google.1 Jeppe Kofod, Denmark’s Minister of Foreign Affairs, said that the position was an effort to ensure that governments “set the boundaries for the tech industry and not the other way around.”2 Since then, many European nations followed suit: Austria announced a technology ambassadorship, the United Kingdom appointed a former Silicon Valley entrepreneur to the position of tech envoy and consul-general in San Francisco, and Estonia officially assigned a top diplomat to focus on cybersecurity.3
This should not be viewed as an unexpected development within the international diplomatic scene. In the past decade especially, social media platforms have become prominent spheres where geopolitical conflicts develop and unfold.4 Concerns around the spread of false and divisive content on the internet, the lack of regulation for privacy policies and data collection practices, and the heightened awareness surrounding the cybersecurity of nation-states and multilateral organizations have all brought the rising political power of social media platforms to the forefront of global debates. Additionally, big tech companies hold massive economic power, rivaling a number of nations in this regard. In January 2022, for example, Apple Inc. became the first company in history to reach a $3 trillion market value – greater than the GDP of the United Kingdom.5 Likewise, in the summer of 2020, the Bank of America calculated that the U.S. tech stocks were more valuable than the entire European market. Thirteen years ago, the European market was four times larger than the U.S. tech industry,6 illustrating the rapid growth Silicon Valley companies witnessed since their emergence in the late 1990s and early 2000s.
This issue brief explores the nuanced implications of holding social media platforms to equal political standing as sovereign states. Investigating big tech companies’ increasing lobbying efforts in Washington, their unregulated ability to influence public opinion, and their opaque soft power practices, it argues that their foreign policy influence should be examined and dissected more closely by government actors, both within the United States, where most of these companies are based, and outside of it. Tailored regulations should be enacted to address key social and political considerations, while still creating and enabling opportunities for technological advancement on a global scale.
Background
The start of Silicon Valley’s influence on American political practices dates back to a landmark lawsuit between the federal government of the United States and Microsoft in 1998.7 Already on its way to become a software monopoly, Microsoft grew rapidly in the 1990s with the introduction of an updated version of the Microsoft Windows operating system, accumulating incredible wealth and market share almost entirely without any government interference.8 In the early days of the dotcom era, this sense of techno-libertarianism that allowed technology companies like Microsoft to flourish in Silicon Valley stemmed from the belief that the digital realm and the physical realm were separate, and were therefore subject to different rules.9 Supported by the Clinton administration’s free-market ideology, the U.S. government assumed a “hands-off” approach towards tech companies, loosening tax return requirements for internet companies and creating a “digital free zone.”10
By the end of the decade, however, the company’s size and alleged anticompetitive business practices attracted the attention of regulators within the Clinton administration, who were being encouraged by lobbyists from Microsoft’s competitors, like IBM, to investigate its practices more thoroughly.11 In 1998, the United States’ Department of Justice sued Microsoft, claiming the company was using the Windows operating system’s monopoly on computer software to push its Internet Explorer browser, therefore disadvantaging rivals.12 After a years-long battle, Microsoft lost the case. The judge found that Microsoft’s position in the market did constitute a monopoly, which threatened both competition and innovation in the industry.13 Microsoft was ordered to break into two separate entities, one for operating systems and one for software. After appealing the decision, Microsoft instead reached a settlement with the Department of Justice in 2001, preventing a break-up.14 Nevertheless, the landmark lawsuit made one thing clear for Silicon Valley tech giants: you have to play the political game if you do not want federal interference in day-to-day business.15
Since the mid-2000s, the economic growth of big tech has been accompanied by the growth of their political influence, both domestically and globally. Often utilizing their say over federal policy to protect their market interests across borders, big tech pours immense resources to circumventing the threat of action over anti-competitive practices, the possibility of higher taxation, and regulations around net neutrality, data collection practices, and privacy. The political rise of big tech companies, however, came to prominence in the public sphere only recently, especially with reports of Russia carrying out social media campaigns to aid the election of former President Donald Trump. The specifics of Russian interference came in bits, with claims of the country hacking the Hillary Clinton campaign. 16 Most importantly, however, it was revealed that Russia had released politically damaging misinformation on the internet, and used social media platforms to spread propaganda, support the Trump bid, and increase distrust in the American electoral system.17 The realization that social media platforms can become sites for political manipulation encouraged both state and civil actors to question how much big tech knows about average individuals, and how that information can be used for unethical purposes.18
The debate surrounding Silicon Valley’s data practices was compounded in 2018, when an investigation launched by the Observer, the Guardian, and the New York Times revealed that Cambridge Analytica, a London-based digital firm and consultancy, had used illegally obtained data from Facebook to build “voter profiles.”19 Stephen Bannon, former President Trump’s Chief White House Strategist, was a board member of the firm.20 The firm had gained access to the data of 50 million users in 2014, which was utilized to persuade American voters to support the Trump campaign through targeted advertisements during the 2016 presidential election.21 In this way, data collected by big tech was clearly used to both distort and manipulate political discourse in the United States.22
One month after the Cambridge Analytica scandal came to light, Mark Zuckerberg, Chief Executive Officer of Meta Platforms (formerly Facebook, Inc.), appeared before the U.S. Senate’s Commerce and Judiciary committees to discuss Facebook’s data protection practices and the disinformation campaign carried out by Russia on the platform.23 During the hearing, he said, “It is clear now that we did not do enough to prevent these tools from being used for harm. That goes for fake news, foreign interference in elections, and hate speech, as well as developers and data privacy.”24 When asked if regulations around big tech’s practices should be increased, however, he stated, “The real question, as the internet becomes more important in people’s lives, is what is the right regulation, not whether there should be or not.”25 He did not make it clear, however, how a debate around appropriate regulations could begin before the question of whether or not there should be regulations has been answered.
Zuckerberg once again appeared before the Senate Judiciary Committee in November 2020, this time joined by Jack Dorsey, the former Chief Executive Officer of Twitter, for a session surrounding big tech’s content moderation practices. During the hearing, Republican senators posited that content moderation policies were being used to silence conservative voices, while Democrats were in support of more moderation to help prevent the spread of hate speech and violence.26 The lack of a united approach on the topic has only made matters worse, with critical issues left unresolved and unchecked to this day.
Big tech’s de facto role as the arbiter of public political discourse came to light once again last year, when multiple social media platforms banned former President Trump following the Capitol insurrection of January 2021.27 Although the former president’s ban on Facebook was set to last only one year, Twitter maintains that the ban is permanent, even if he decides to run for president once again.28 This has raised legitimate concerns on the lack of clear and consistent criteria for political censorship on these sites. Multiple terrorist organizations, for example, famously retain access to the very same social media platforms.29 Notably, ISIS had announced its 2014 invasion of northern Iraq with the #AllEyesonISIS hashtag on Twitter, and used social media platforms for its recruitment practices, attracting around 30,000 foreign fighters from around 100 countries to Syria and Iraq.30
Cybersecurity and data privacy concerns also persist. In October 2019, Facebook announced that people linked to the Internet Research Agency, the group responsible for Russia’s interference in 2016 elections, were laying the groundwork to continue their efforts during the 2020 election through Facebook and Instagram.31 Furthermore, documents declassified last year confirm the continuation of Russian efforts to meddle in future American elections.32 The persistence of such efforts by foreign actors on social media platforms indicate that despite the promises made by big tech between 2018 and 2020, their internal efforts to end disinformation and political manipulation on their platforms have not been sufficient.
As such, the political influence of big tech companies, either through their own practices or the third-party use of their platforms, remains as poignant as ever. With increased digitization around the world due to the COVID-19 pandemic, allowing big tech access to immense ability for political manipulation without fully understanding and regulating this capacity is concerning for both domestic and international contexts.
Discussion
When asked on a way forward to resolving these pressing challenges, Microsoft’s chief executive Satya Nadella said, “It cannot be left to the CEOs of tech companies to arbirtrate policies for the world. It’s a strange position to put four or five of us in. Nobody elected us.”33 And yet, big tech companies, including Microsoft, have continuously worked to increase their influence on American politics.
It is important to note that Silicon Valley’s political influence did not develop organically. Instead, it has been cultivated by big tech companies deliberately, and at times, dubiously. In the two decades since the dotcom boom, companies such as Amazon, Meta Platforms, Microsoft, and Apple have poured enormous resources into developing a say over government policies, especially through their increasing lobbying efforts in Washington, access to opaque avenues for political influence online, and their unregulated, and not fully understood, ability to shape public opinion.
Washington lobbyists actively work to sway legislators to enact political and economic policies that support Silicon Valley’s interests. In 2021 alone, Facebook, Google, Amazon, Microsoft, Apple, Uber, and Twitter spent nearly 70 million dollars lobbying the U.S. government, exceeding the 65 million dollars they had collectively spent in 2020.34 Unilaterally, Meta Platforms spent 20 million dollars, and Amazon spent 19 million in 2021 – the most either company has ever spent on lobbying.35 The increasing funds point to these companies’ mounting efforts to influence policy decisions. For comparison, big tech spent in the past year three times of what they had spent a decade ago.36 Silicon Valley has also pressured the U.S. goverment to limit the role of the International Telecommunication Union, a United Nations body that sets technical internet standards, so that tech companies could operate with as little regulation as possible.37 Additionally, the United States Mission to the European Union in Brussles even lobbied on behalf of Silicon Valley against Europe’s privacy laws.38 Both the Obama and Trump administrations also worked against European efforts to implement higher taxes on big tech companies.39
Most recently, the lobbying reports, which are required by law to be disclosed publicly, demonstrate that these companies’ main concern has been the bipartisan support for antitrust regulations,40 which are state and federal laws that are designed to ensure fair competition and prevent the monopolization or overconcentration of market power.41 The U.S. Department of Justice’s landmark case against Microsoft in 1998, for example, was an antitrust lawsuit. Companies like Google, Amazon, and Facebook insist there is no monopolization, despite the companies’ domination of search engines, online retail, and social media, respectively, because customers are free to use or not use the platforms.42 However, considering the entrenched use of these platforms in daily life, this freedom of choice is merely an illusion; as these companies dominate the digital sphere, they are impossible to avoid.43
In recognition of this, there have been proposals last year in the United States’ House Judiciary Committee, which oversees the administration of justice within federal entities, to make mergers more difficult and force big tech companies to leave certain lines of business.44 Big tech lobbyists, however, argue that such legislations would destroy popular products and benefit foreign competitors.45 With big tech’s lobbying efforts still increasing, it is too soon to predict if any of those proposals will materialize into actual legislations. One thing, however, is clear: Silicon Valley companies have devoted immense resources to influence both federal and foreign policymaking to fit their business interests, especially when it comes to limiting governmental regulations. In addition to the tangible resources devoted to lobbying efforts, big tech companies also have access to opaque avenues for socio-political influence through their platforms. Big tech’s lack of transparency on matters such as their content and user algorithms emphasizes the concerns that digital platforms have, in recent years, become new spheres for geopolitical disputes. Facebook’s use by Russia’s Internet Research Agency to carry out misinformation campaigns against Hillary Clinton in 2016, and against Joe Biden in 2020,46 for example, indicates the ease with which the American electoral process can be influenced through social media. Even though big tech companies claim that they do not actively seek out political influence, they also do not actively regulate unethical uses of their platforms, with content moderation policies often being compromised for high online traffic. Most notably, Facebook’s algorithm is optimized to boost what brings most “clicks,” which are often radical voices promoting xenophobia, separatism, and racism.47 In a senate hearing, Mark Zuckerberg even admitted “it is true that partisan content” attracts more likes, shares, and views.48 Political polarization and divisive rhetoric generate greater income for big tech companies, and their platforms’ algorithms are designed to boost online engagement, regardless of the negative sociopolitical implications of the content itself.
Big tech’s soft power capabilities also extend beyond the strategic use of their platforms by third-party actors. As private corporations that monopolize the public sphere, they also have the capacity to regulate who is allowed to use their platforms and who is not. The most prominent example of this is Twitter’s permanent ban of former President Trump.49 He had famously used controversial tweets to dominate the news cycle, tweeting as much as 20,000 times during his time in office.50 Regardless of whether one supports Twitter’s decision or not, the ban indicates the potential of big tech’s influence over who can access the public sphere, especially when we consider that such decisions do not abide by objective standards. In this regard, big tech companies harbor immense political power. They have the ability to determine whose voice is heard and whose is not. No government or civil agency, however, has the current capacity to ensure that private corporations exercise this power objectively, apolitically, and responsibly.
One of the most poignant examples of this capacity played out in Myanmar in 2017. The Myanmar military, the Tatmadaw, carried out a months-long campaign against the Rohingya minority, which has been deemed a genocide by the United Nations.51 The UN discovered that at least 10,000 were killed in “clearance operations”, and 727,000 were displaced from the Rakhine State.52 The atrocities have been labelled a “genocide incited on Facebook,”53 pointing to the power big tech platforms hold in shaping public discourse and opinion. The New York Times reported that the Myanmar military carried out a systematic campaign on the social media site that stretched back five years, and targeted the country’s Rohingya population.54 Burmese military agents had used Facebook as a tool for ethnic cleansing by posing as fans of pop stars and national heroes and flooding the site with anti-Rohingya propaganda that included false news stories and hate speech.55
In March 2018, United Nations officials and experts investigating the violence confirmed that Facebook played a significant role in spreading hate speech against the Rohingya minority.56 Despite Facebook’s role in the incitement of atrocities, however, the company was guarded from federal legal action by Section 230 of the Communications Decency Act, which is the main legislative text in U.S. law regarding internet regulation.57 It acts as a legal shield against companies like Meta to be responsible for what is shared on their platforms, as it denotes that an “interactive computer service” cannot be treated as a publisher or speaker of third-party content.58 The Communications Decency Act was devised in 1996, long before tech corporations’ operational and influential potential was recognized. Despite its outdatedness, big tech companies avoid any liability for uses of their platforms for nefarious causes and violent political mobilization. Tech corporations have the capability to detect and remove dangerous content on their platforms, and if they do not, then they have the economic resources to develop such capabilities. Their reluctance to stop disinformation campaigns, especially against a specific population, therefore, is not a question of if they can, but if they are willing to in the first place.
Recommendations
It is crucial that governments accept the growing political influence of Silicon Valley, and not only in the sense of treating these corporations as sovereign states by appointing ambassadors to establish official relations with them. Instead, governments must recognize that with immense resources poured into lobbying practices, their access to political manipulation mechanisms, and their ability to shape public opinion, big tech’s influence on policymaking must be more heavily scrutinized and debated. The last couple of years have made it clear that both big tech companies and third-party actors use these platforms for political manipulation, disinformation, illegal data collection, incitement of violence, and cross-border political interference. As such, bilateral and multilateral cooperation networks should be developed to regulate big tech interests and practices in line with ethical and political standards, and there are a number of ways to do so.
First, governments can launch dedicated working groups to study the nuances of big tech companies’ status as sovereign state-adjacent political actors. These conclusions should then be used as a framework both for regulatory action and for engagement between sovereign states and private sector companies. An operational framework around Silicon Valley’s positionality is critical as big tech companies regularly argue that a non-libertarian approach by governmental actors would lead to a decrease in innovation and technological advancement. To what extent this is true, however, has not been investigated enough by objective state actors. The dedicated team’s findings can support the development of more balanced and tailored regulations that stand in the way of the misuse of big tech’s political influence, while supporting further technological advancement.
Secondly, an annual international convention can be organized, possibly by the United Nations’ International Telecommunication Union, to bring together executives of tech companies, notable stakeholders, investors, and government actors to address the most prominent issues in the tech sphere. This convention would be similar to the UN Climate Change Conference, where multilateral agreements are forged and commitments refreshed, but for the use of digital spaces instead. Questions around the positionality of big tech companies and sovereign states can also be addressed on an annual basis, thus encouraging cooperation and open dialogue between them.
Thirdly, an international court could also be established to specifically focus on cybersecurity violations with cross-border dimensions. One of the main problems ahead of holding actors accountable for digital violations, for example Russia’s interference in U.S. elections and Facebook’s role in the Rohingya genocide, is the question of jurisdiction regarding which laws and which courts to use. Cybersecurity is a growing concern on the international stage, yet there is not an adequate legal framework at the moment for proper judicial action. The establishment of an international court can address questions around accountability and enforcement mechanisms, as well as contributing to the development of an international legal framework for crimes that occur in the cyber space.
Conclusion
The international community would be well advised to remember that big tech companies are private sector actors, with the primary goal of increasing their market value, not civil society actors who strive for the common good. Neither global nor national policymaking must be guided by the assumption that what is good for Silicon Valley is always good for the state. Incentives and interests of big tech companies do not necessarily overlap with what is in the best interest of a given country, or the greater good of society. Despite the fact that these platforms nearly match sovereign states in terms of political influence and economic might, it is still up to national governments and supranational organizations to better monitor and regulate some of their questionable practices and unethical actions – while they still can.
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The statements made and views expressed are solely the responsibility of the author, and do not represent Fiker Institute.
