Google, Facebook, Amazon - The rise of the mega-corporations | DW Documentary

Silicon Valley in California from here companies like Apple and Google have conquered the world but their success has come at a price yes, there is not much to see, it's just people, oh, you are one of the high ones, oh, you must be very rich, well, I was living. in los altos before it became a very exclusive area to live david is a merchant the

rise

of technology companies has made it impossible to pay rent for three years he has been living in a van right next to the

google

campus i lived in a house It was a two-bedroom house.

I was paying around 2,400 a month. I was doing well. Well, the guy realizes that he can get 5,000 a month for this place, so he tells me you have to leave when the contract is up. Leave. to remodel and then people like me, like I've been here my whole life, I have nowhere to go Silicon Valley in San Francisco belongs to the bay area in 2021, there are about 35,000 homeless people here along with the highest density of billionaires of the world and the pandemic has only exacerbated that inequality, it really excludes any possibility of us having meaningful democracy when some people in our community are not only assured of their basic needs but also every imaginable object of opulence and other people cannot even survive , I think it exposes that our pretense of democracy in this country is some kind of farce

facebook

google

amazon

and apple have changed the global economy they have become too big in the process politicians seem to want to limit the power of the company the purpose of the audience today is to examine the dominance of

amazon

apple

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and google in fact tech chiefs have been called to testify before congress the tech industry is an american success story the products we build to change the world and improve people's lives google aims to create products that increase access to opportunity for everyone.

No matter where you live, what you create, or how much money you make. Technology companies do not see their power in the market as a problem. One of the biggest problems Silicon Valley leaders have is that they believe that because their intentions are good, the results will be good. be good and that they find it very difficult to imagine that despite their good efforts some things have gone completely down the drain davos switzerland this is where the most powerful people in the world gather for the world economic forum in january 2019 the pandemic coronavirus was still long Far away, a Dutch historian pointed out the problem. 1,500 private planes flew here and I want to say that I hear people talk in the language of participation, fairness, equality and transparency, but I want to say that almost no one raises the real issue of tax evasion. come on we have to be talking about taxes yes that's all taxes taxes taxes everything else in my opinion the fact is that more and more of our world belongs to a few super rich people one of the reasons is tax evasion among 2014 and 2018, billionaire.

Amazon CEO Jeff Bezos paid an effective tax rate of 0.98 compared to the highest US tax rate of nearly 40 percent for economic historian Adam Twos. The problem is systemic. They are also drivers of inequality at the top if you look at income. The distribution in American society, a very key element of the increase in wealth and income of the former, is not only the people of Wall Street, but also the managerial elites and their technicians in these companies, who have very big, very attractive compensation and then get bonuses on top of that for these successful companies to distort and drive increasing polarization in American society the coronavirus has exacerbated the trend between 2020 and 2022 while many Americans lost their jobs jeff bezos' fortune grew by over $80 billion the standard story that we've always been told that wealth creation is created at the top right by these brilliant entrepreneurs and innovators and then that trickles down to the rest of us and sure we can tax them, but we have to be too. grateful and we should not attack them too much because, perhaps, that discourages all their great work.

What we have realized, perhaps especially due to the pandemic, is that it is actually the other way around, the true wealth creators that we really are. Plumbers, teachers, nurses, sanitation workers, whatever, depend on them if they stop working. Society is falling apart. Tax evasion has driven tech companies to rural areas far from big cities in remote Prineville, Oregon. Facebook has invested two billion dollars in a data center. It was a very quiet city before the technology companies arrived. This is the county seat. It's also the oldest county seat, but was economically pretty stagnant before the data companies arrived in 2009.

Facebook was lured here with the promise of tax breaks starting in 2021, the city lost a potential $130 million. dollars in taxes. In 2020 alone, Facebook generated almost $30 billion in profits. If they didn't appear here, we wouldn't have much of the infrastructure we have. We don't have a lot of cool programs that you know have helped with schools. We would still be that small town struggling to find an industry to come here after the lumber industry closed the sawmills in the early 90's and saw Prineville's unemployment rate. increased to about 20 then came Facebook, but in 2022 the data center employed only about 350 people instead of taxes.

Facebook donates to the city for things like school renovations, coding courses, and infrastructure, which makes Prineville politicians susceptible to influence, I think because they know. They will receive money from them. They know they will help support some of the projects and things that the economy itself can't afford to do. They are more powerful than the government, I mean they really are and I don't know where. or how from a legislative point of view you can interact with something that cannot be anticipated and that is a problem. Facebook will open its 11th data center at the site in 2023.

The facility will soon have an area of ​​4 million square meters, the company confirms. which has given three million dollars in voluntary grants, yes, Facebook has a big presence here and yes, a lot of people work there, but I don't think we are a Facebook city and the fact that we are one of their partners and we have worked closely with them to build like them, but I believe that our identity continues to be a logging city. Facebook's tax break in Prineville won't end until 2027, only then will the city find out if the deal with the company was a good one, it's not just small towns that have to negotiate with the tech giants.

Entire countries depend on them. How did individual companies get so big? One answer takes us to 2007, the beginning of the financial crisis and the skyrocket. Financial services company Blackrock's fortunes as the banking sector faltered, so Federal Reserve Chairman Timothy Geithner allowed Blackrock to oversee the liquidation and restructuring of the banks. So, when the financial crisis hits, you have to, for example, quickly dismantle a bank like Bear Stearns. Who is asked to do it? Do it for you, well, you really don't want the experience at the New York Fed to get too messy. You'd rather outsource this and find people who really know this, like Blackrock for example, at the time. a relatively unknown company but with a wealth of experience, Blackrock closed banks and purchased distressed financial institutions.

It became the first big winner of the crisis in 2020. The group managed assets worth nine trillion US dollars and then, crucially, becomes a predator and becomes an entity. which has money available to buy other people's assets while they look for capital blackrock also appeared in europe advising the european central bank and buying a share of the major british bank barclays in 2009. and blackrock takes advantage of barclays' embarrassment to attack this portfolio and dismantle and incorporate it to blackrock's business and distances blackrock from its main competitors at the time, schwab and vanguard, and pushes blackrock into a much bigger league, so help me, God, help me in an effort to prop up the failing banks, the American presidents, bush. and Obama injected massive amounts of cheap money into the system by buying shares in state-owned banks.

If you delay acting in an economy of this severity, then you potentially create a negative spiral that will make it much more difficult for us to exit the entire strategy. in early 2009 is to prevent the avalanche from happening again, that's the key, right, you can create jobs, you can do stimulus, you can start to repair American society with a health care program, but that can only be done if you stop the fall of the banks. the financial system did not collapse the american economy began to recover in part because investment capital was very cheap one man especially intelligently took advantage of that fact jeff bezos economics professor scott galloway has analyzed the

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of amazon people forget a lot at the beginning of the In the 2000s, smart analysts thought Amazon was going to face a liquidity crisis and might go out of business, and its stock underperformed for the better part of a decade.

Bezos focused on spending revenue and easily raised capital on optimizing a supply chain. The goal was to make products reach the customer faster. It's easy to create a website but it's hard to make it really good and it's hard to make sure the product arrives in good condition on time. Which is unusual for Amazon. It's not a marketing victory. It's a supply chain victory. Innovation really is a supply chain victory. They have managed to bring more products to more people faster than anyone else in the world. Amazon is one of the most valuable companies in the world along with Apple, Google and Facebook.

As of September 2021, they are worth it. Together around seven trillion dollars, if you put up more capital than your competitors, chances are you will win, so access to cheap capital is important and has become a key strategy for winners on Amazon. Growth is all employees are monitored forming a Union is difficult, there are two million Amazon retailers who depend on the giant for their survival, just like Yerghu Baka. Amazon takes care of storage, shipping and returns for one year. In exchange, it charges a commission for each euro of sales. Hoobacher has to give 30 cents to Amazon in 2019 he made almost 60 billion dollars from these commissions alone.

The problem is that people will say, well it's a two-way trade, retailers don't have to work with amazon and I agree that's not really true. Amazon is now 50th of all e-commerce, so not being on Amazon actually means not having an e-commerce offering and that's simply not an option for most people. Germany's online trade association has surveyed almost 1,000 retailers about their experience with Amazon. Nearly 80 percent of respondents viewed Amazon as a difficult partner that dictated pricing and encouraged reliance on the platform. In May 2021, Amazon cut Huber's inventory and half of its products were removed, resulting in a loss of business. six-figure turnover you don't sleep very well when suddenly the foundation of your business is taken away from you and you have to put all your employees on reduced hours overnight without warning, that's not something you can prepare for, the switch and suddenly you are practically out of business responding to a query that Amazon gave the pandemic as the reason for its actions the warehouses were overcrowded and hygiene measures had changed its logistics procedures if these inventory limits continue for another two months I will have to close I would not survive because the overhead costs continue to increase I have 35 employees here who Amazon had to pay did not pay compensation Hubacher had to bear the loss of turnover alone while Amazon founder Jeff Bezos flew into space in his own rocket The market power of big technology companies also comes from buying other companies both inside and outside their own sector, they buy hundreds of competitors and then use the newly acquired technology or bury it Apple Park in Silicon Valley the headquarters of Another technology giant Apple was founded in 1976 with an initial capital of only 1,300 US dollars.

In 2022 it is the most valuable company in the world with a stock market value of around 3 trillion dollars, much of its profits come from the app store. Founder Steve Jobs introduced it in 2008 as a platform for selling software. Apple has sold almost 2 billion iPhones worldwide. The success of the software may depend on itspresence in the app store for which Apple charges between 15 and 30 percent of revenue David Heinemeyer Hanson cannot accept that the entrepreneur lives in Malibu, California, he became famous in technology circles with his base camp software and essentially tell us if you don't like the deal you can get out of here, you can just go out of business.

How is that a choice? It just felt like a mafia tactic, even the way they showed up to demand the money was just despicable. Heinemeier Hanson wanted to distribute their new email software without paying huge commissions and very soon it will be 30% of the entire economy and very soon I will be wondering why it is 30 and not 40, maybe we should just increase our prices, anyway this is It's a captive audience, which is exactly the essence of the monopoly power that other companies have. also took action against Apple's commission in 2019, Spotify was sued in Europe, prompting the European Commission to launch antitrust proceedings in the US.

Game developer Epic Games also filed an antitrust complaint in 2020. The director Apple executive Tim Cook had to defend himself in court. It's about destroying Apple, it's not about destroying anyone, it's about giving us all a chance and access to the market, technology companies decide under what conditions others can enter their system in the process they collect oceans of data . The Facebook holding company Meta alone has a total of 3 billion users thanks to its WhatsApp and Instagram acquisitions. Shoshana Zuboff, author and professor emeritus at Harvard, calls it surveillance capitalism. They invade our private lives through surveillance. They mine our lives by converting what they mine into behavioral data and then claim that behavioral data as their private property.

This is how surveillance capitalism works. This is a fundamentally illegitimate operation. The data is used. to advertise products and for political campaigns surveillance capitalism became the dominant economic paradigm and moved from google to facebook to facebook it became the default option in the technology sector it reset the bar for investors because with the surveillance dividend there are more income faster than you know, doing capitalism the old-fashioned way, which is really creating products and services that meet people's real needs. Maritia from the Netherlands is a former member of the European Parliament and is now director of international policy at Stanford University's Cyber ​​Policy Center.

My feeling is that one of the biggest problems that Silicon Valley leaders have is that they believe that because their intentions are good, the results will be good and that it is really difficult for them to imagine that despite their good efforts some things will turn out. They have completely gone down the drain. Shaka and Zuboff are part of a panel of experts who want to monitor Facebook, meanwhile activists have placed body bags outside Facebook's Washington office. They consider the company's role in election interference and misinformation to be deadly, especially during the pandemic, even if you might think that selling ads well is not.

You know, endangering life, it can lead to life-threatening dynamics with microtargeting, with the viralization of hate, with people taking to the streets because they really believe that the elections were stolen if the architecture is designed to data and information with profit objectives becoming dominant that have been out of sight even if society pays the price. Facebook founder Mark Zuckerberg has testified before investigative committees several times, including here in the US Senate in 2018. My top priority has always been our social mission of connecting people. build community and bring the world closer the us government has been pursuing several cases against tech giants in the early 2020s the federal trade commission is suing facebook for creating a monopoly the justice department is suing google the house of representatives is even considering breaking up so far without much success so I think things have changed and now our innovators and our tech companies believe that in fact they have the advantage and more resources and that they are more powerful than the The government that is supposed to regulate them are the big tech

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. more powerful than nations for ramesh srinivasan of the university of california that is a crucial question who is influencing how we feel what we believe what we think with whom we connect with what we know there is no doubt that this is happening in a much more intense way and ubiquitous governance of our lives by you know a private technology company a google google search results facebook feeds etc. true and I think the awareness of the harms of putting so much trust and responsibility in the hands of retail and advertising companies was a mistake, it really was a big mistake and I think it is important that democratic governments start using technology to promote their own democratic agendas and that technology companies do not use them to promote their own corporate agendas.

Many critics are hopeful that the EU will curb the power of the tech giants. Two new directives from 2020 expected to kick things off The Digital Services Act or DSA aims to ensure that platforms like Facebook and Twitter take more responsibility when it comes to things like removing illegal content and maintaining transparency and rights. fundamental the digital markets act dma defines fair competition rules simply allowing competition and sharing data amazon apple and google would be affected by the directives the european competition commissioner magreta vestaya is criticizing companies with that size also carries responsibility and then align what you have to do and what you can't do Facebook and its fellow rivals are fighting planned regulations with the help of lobbyists in 2020 alone American tech companies spent around €100 million on political influence in Brussels hired former politicians with the best connections facebook even employs a former British deputy prime minister, Nick Clegg, there is definitely an imbalance big tech companies have a lot of resources as members of the European parliament we have very small teams with three or four employees in Brussels who write policies, it is Of course, as an individual MEP you cannot compete with the lobbying power of Big Tech.

Companies have their resources. Rasmus Anderson represents the Greens in the European Parliament. He receives weekly requests for talks from lobbyists. This time he is a representative of Amazon. Amazon alone. wants to promote their interests I think they will try to give us suggestions on how to dilute the law so that it does not affect them or does not change anything in the core of their business model lobbying is not illegal but it is legitimate andrea schwab represents the center-right cdu in the european parliament as well as under their own names, large

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covertly exert influence through trade associations, they come to you as the first European association of American companies, then they come as the European association of digital companies, then the European association of technology companies , then the American Business Association and the American Business Association. for tech companies come and come and come at some point as a member of parliament you have to ask yourself how much time you can spend on their concerns, shouldn't we spend a lot more time on the concerns of other citizens and companies lobbying?

It is used to pressure unwanted regulations and if that doesn't work there is a longer legal route the European commission proposes creating 80 positions to enforce the rules but Apple's legal department alone has a total of 900 employees, of course we can't compete When it comes to lobbying funding, we can't compete when it comes to the number of lawyers, so you know, what we have to put into the process is, of course, a dedication to achieving it. Google, Facebook and Apple also invested large sums in lobbying in the US. When software developer David Heinemeyer Hansen decided to fight Apple's market power in 2021, he discovered how strong that pressure is in several US states.

U.S. when I testified in front of the Arizona House of Representatives and the chairwoman of that committee said as her opening statement. the procedure in which Apple had bought out all the lobbyists in the city and that before the hearing had had a chance to take place, Apple had tried to crush him to do this, the company hired lobbyist Kirk Adams, former chief of staff Arizona Governor Doug Ducey's planned law. would have allowed app providers to avoid Apple's high commissions. Arizona would have been the first state to crack down on the monopoly. I was actually sitting on a Zoom call for that final um meeting and we were waiting to give our testimony and then in the middle.

During the process, they just said, "Oh, actually we're not even going to hear this bill. Something has come up, it's no longer on the agenda and you witness it and you think it's a movie, there was no vote, in Instead, an agreement was reached behind closed doors." doors, the law that would have jeopardized Apple's market power was thwarted, a similar regulation also failed in North Dakota in 2021, so it was really scary to see from the beginning that the power conjured by this monopoly success gives him the resources to crush democratic accountability than when sovereign states like North Dakota and Arizona aren't even powerful enough to hear a bill take it to a final vote.

When asked what happened, Apple admitted to exerting influence but defended its actions by saying that this legislation threatens to destroy this very successful model as well. such as the privacy and security mechanisms that our clients expect is the power of global

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corporations a danger to democracy one of the steps towards tyranny was when private power overtook the government the government is supposed to represent our best interests and is a counterweight or a burden on the private sector power that will always seek profits and ignore externalities, whether it's teenage depression or misinformation or weaponizing our elections, and there are more full-time lobbyists working for Amazon who live in Washington DC, then there are us full time and then there are US senators sitting facebook's public relations and communications department spinning its image is now bigger than the washington post newsroom relations between silicon valley and washington are close we are in the middle of the worst google was one of the major donors to Barack Obama's 2012 election campaign American corporations can essentially buy elections the system is corrupt so the system itself must also be transformed at the level of who influences our publicly elected politicians belgium alibaba china The response to Amazon plans to open a distribution center here in November 2021, but the project faces resistance from some locals.

It defends its interests on a global scale, including through companies like Alibaba. In strategic sectors we are facing an expansion project. chinese here the liege expansion project is a stop on the new silk road china's main 21st century infrastructure project the agreement was negotiated in 2018 by king philip of belgium seen here with jack ma founder of alibaba the closeness between the state and the company is typical of china says digital expert kai fun kanop has increased significantly in the last year due to the expansion of the so-called party cells. The party cells are effectively representatives of the communist party installed in various private sector corporations, but especially in the technology sector.

Party officials also work at Alibaba. Profits and politics combine to serve the party. The former Finance Minister of Wallonia does not see any danger in this situation. I do not want to be a defender of authoritarian states, global trade is a reality and I prefer that exchange be carried out between democratic countries, but I am not naive, I do not believe that we live in a world in which we are essentially good and the only good thing would be wonderful , but it is not reality, it is simply online commerce or Chinese imperialism after the decline of the steel industry in the 2010s, Liege's unemployment rate was high.

Is Belgium happy to pay any price for economic growth for 30 or 40 years? I have been scammed by multinationals so far it was mainly American companies, now let's try the Chinese, they are taking advantage of the fact that we have high unemployment and are desperate for foreign investors in 2021, two of the main ones. Ten technology companieswere Chinese, another might soon join them. With a much better understanding of our online behavior, China has an incredibly large online community and low digital privacy, which has led to an algorithm that is significantly better at recognizing what we want. It has only been on the global market since 2018, but it has already been downloaded more than twice. a billion times more frequently than Facebook and what happens, the Chinese state also has its place at the head of the parent company, bit dance, data control and content censorship, omitted catalog, there is a catalog of sensitive issues around issues Internal affairs, Tiananmen Square, Xinjiang, Hong Kong and Taiwan are all sensitive topics that are not allowed to be disseminated through Tic Tac or the Chinese equivalent.

I skipped this. These policies exist in Europe and the United States as well. A few months ago there was an example in which a user tried to criticize human rights violations in Xinjiang under the premise of a makeup video how much influence does the communist party have on tic tac the company highlights that it complies with local laws but when asked about it the chinese government does not respond if it has access to the data of tic tac users fear is growing in beijing about the power of chinese technology companies themselves in april 2021 alibaba had to pay 2.3 billion euros in fines After an antitrust case in Mordida Danza, the state bought shares in companies.

The regime has been tightening the screws in the technology market since the end of 2020 and is looking to ban certain business models. I think China looks at the United States and Europe and says that these governments have been overrun by big tech and we're not going to get to this point and they have taken some very quick aggressive actions against big tech, saying when big tech overtakes the government, as it has done in the US and Europe, they lead to very bad places, meanwhile, in Nevada, a company is working to make business completely independent of local laws.

Here in the desert near Reno, technology companies hope to found their own city. The model comes courtesy of cryptocurrency company blockchains llc, CEO Jeffrey Burns wants to create so-called innovation zones that act like completely independent local governments. Burns donated money to Nevada Gov. Steve Sisilak and hired influential lobbyists a few months after secret talks in early 2021, the governor announced. A Bill journalist, Sam Metz, has been covering the story under innovation zones, as it was proposed that any technology company with a certain amount of land that promised a certain amount of investment could apply to the state to create a zone of innovation that would give them similar powers to local government.

The condition is that technology companies invest at least 1.25 billion US dollars. In return, they are allowed to introduce their own local tax, judicial and school systems, so sovereignty is on sale. I think the history of Nevada is really the history. of politicians trying to diversify a single industry economy, first it was mining, gambling and tourism, and now I think the pandemic has really made the state aware that it is difficult to depend on just one industry, the pandemic has hit nevada hard, the governor expects a cash infusion from blockchain's llc, i think in nevada, critics are worried about actors with enough resources to buy land, hired lobbyists and get an audience with the governor.

Why does Jeffrey Burns want to eliminate local governments? Our interview requests went unanswered, only his security advisor was available, I believe. that there are ways to incentivize places that have suffered a lot to be investment centers for companies, but I don't think that has to mean that they are given all this power to basically become their own states, that is a violation on many levels different from sovereignty similar to state sovereignty, I mean that to me sounds like some kind of district 9 or something like robocop, some kind of dystopian science fiction after heavy criticism, the bill was withdrawn in August 2021.

Governor Steve Sisilak and Blockchain's LLC are sticking to their idea, however, of selling the powers of the state to tech corporations. Meanwhile, in Washington, the fight against market dominance by Google, Apple, Facebook and others continues, the Congress relies primarily on antitrust laws, in short, they have done it too. A lot of power, this power, but how promising are these procedures. Legal expert Chris Sagers is personally skeptical. I think the risk even with a very aggressive antitrust system is not so much that it will ruin anything, it's just that any good it does will not be permanent and What I fear is that you know we can have this period of a few years of very aggressive intervention and Although it seems unlikely, you know that maybe the government will manage to break up Google or Facebook or some other company and then it will only be a matter of a few years before someone figures out how to turn it into a new monopoly.

President Joe Biden has shown a willingness to fight, but he has had to give in. You know, Democrats have control of both houses of Congress and the White House. but in the Senate it will be very difficult to adopt any legislation that does not have some Republican support and Republicans will be very against any very serious changes. Sages estimates the proceedings in the US will take years. Cyber ​​expert Maritia Shaka prefers action. On a global scale, she begins with awareness of the extent to which the enormous power of technology companies, whether large or small, throughout the ecosystem, damages democracy;

It's something that really needs to be understood, so it's going to have to be a combination of mechanisms to make sure that that's rebalanced to put democracy first and not technology first. shashana zuban is calling for a ban on the business model of Facebook and others that collects and sells user data, so we target and extract, make those operations illegal. amplification of divisive content for profit amplification of hate for profit amplification of lies for profit that kills we make it illegal zuroff believes that the relevant laws already exist, they just need to adapt to the digital age that we have also pursued markets are right and we have said um, we have said that in democracies we have said for a long time that you cannot trade in human beings, you cannot trade in human organs, you cannot trade in babies, you cannot trade in illicit drugs. .

You cannot trade things that make people sick or products that are dangerous. We have done it countless times. Now it's just applying it to our reality in our era in our time in our digital century. The uncontrolled power of the

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. Corporations and the growing gap between rich and poor go hand in hand, according to historian Rutger Brechman, when did capitalism work? You know, for most people in the best way, in the '50s and '60s they had taxes up to 80 90 for the richest. people worked perfectly well, you know, we have the highest economic growth we've ever seen, the highest rates of innovation, you know, for a lot of people who are like you know, I don't know, 50 or 60 years old, they think that Communism will never Can work.

If you study history, you'll see that it can actually work. Greed for profits. New technology and big politics together create an opaque world that each new generation will likely struggle to control. A unanimous objection to the consent application was heard.