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Data Sheet—America’s Tech Behemoths Face a Reckoning

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The technology industry is one of the least regulated collection of businesses in the world, especially given its impact on society.

That’s about to change, as I report in an article in the new issue of Fortune, published online this morning. Big Tech, aptly dubbed “the behemoths” by new (and old) Attorney General William Barr, are under attack on multiple fronts by regulators, legislators, antitrust watchdogs, consumer advocates, journalists, and assorted others creeped out by the power Silicon Valley has amassed.

Until recently regulating the biggest technology companies was more of an abstraction—or the purview of regulation-loving European bureaucrats. Now an assortment of measures has begun to move through Washington as well as multiple state and international capitals.

At the heart of the efforts is the realization that while preaching the virtues of connecting with one’s friends (Facebook), making the world’s information easily accessible (Google), and making everything cheaper for consumers (Amazon), these and other behemoths have done considerable harm. They have trafficked in the personal data of their users, cheapened the value of intellectual property they didn’t create, and crushed the businesses of competitors near and far.

The regulation of the tech industry will take several forms. Privacy legislation has a real chance of passing in politically divided Washington this year, if for no other reason than industry wants to pre-empt a hated privacy law set to take effect next year in California. Antitrust action is slower but becoming a real possibility. It’s also possible, if not likely, that Congress will remove the exception Internet “platforms” enjoy from being liable for the information they publish. That last change would inflict real damage on companies like Facebook and Google—and might be the only way to truly rein them in.

***

I was off last week and return with three recommendations of outstanding articles to read, all from The New Yorker:

* Ian Frazier’s masterful profile of the oil-field “pumper” Rachael Van Horn is many things. It is a work of social commentary, a window into the life of an emotionally scarred veteran, a subtle and tasteful work of political theory, and more. At its heart, this divinely written article is about the critical job one woman performs, a task—caring for temperamental oil wells—that will never be replaced by artificial intelligence.

* “Deception, Inc.” by Adam Entous and Ronan Farrow is a harrowing tell of disgusting, unscrupulous, former intelligence agents who use social media and other under-regulated tools (see above) to lie, cheat, and confuse on behalf of their clients.

* Sheelah Kolhatkar’s compelling account of a whistleblower’s quixotic effort to expose Medicare fraud at an insurance company will make you angry, shocked, and inspired all at once. The article is both specific about a single case and general in its condemnation of fraud across the healthcare industry. I plan to ask industry executives their thoughts on the subject at Fortune’s Brainstorm Health conference in San Diego in early April.

Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com

NEWSWORTHY

Why Apple chose Goldman: Apple prefers to go its own way in most things but, when it came to expanding its financial footprint, the iPhone maker realized it needed a big time partner. As the WSJ explains, the Goldman-Apple tie-up is part of a larger phenomenon in which big banks and tech giants (including Amazon) realize they need each other to crack the consumer market.

Make stupidity less contagious: Amid a measles outbreak in American cities, YouTube moved to deprive anti-vax videos of ad revenue, including those with titles like “Mom Researches Vaccines, Discovers Vaccination Horrors and Goes Vaccine Free.” The move comes after Pinterest and Facebook took similar measures.

If you can’t beat ’em, sue ’em: As Adam notes above, regulators are finally getting serious about bringing tech behemoths to heel. They may have an important ally in class action lawyers, especially Chicago-based Edelson PC, which are finding new ways to work with state attorneys general to punish tech firms over privacy transgressions.

Cracked out: Tales of smart phone addiction are nothing new but this personal account by a Times tech columnist is better than most. After his screen-time showed he had picked up his phone more than 100 times one day, he took dramatic steps to cut back and rediscovered books and the world around him.

Burnt out: Would you be okay making $28,000 a year to spend your days watching snuff videos and racist, sexist rants? That’s what Facebook moderators in America make. The most chilling part of a new exposé on the company’s content serfs is that some of them start believing the conspiracy videos they’re supposed to be policing.

Creepy even for Facebook: The social network’s latest privacy horror story turns on revelations that personal health apps are sending data about everything from ovulation, periods and heart rates to Facebook, by means of a standard SDK tool. The app makers and Facebook have now pledged to cut off the data flow.

FOOD FOR THOUGHT

Airbnb likes to talk about “home sharing” and how it helps locals make ends meet, but if you look under the hood of the company’s operations, it can look more like a corporate hotel. A new exposé describes a scheme in Manhattan where a self-described “disruptive entrepreneur” netted $20 million a year by renting 130 separate Airbnb apartments, and creating a significant nuisance. The city is suing to recover some of the ill-gotten gains.

In just a few months, Mr. Beckman had booked more than 500 guests and generated about $84,000 from the building at 78 East 119th Street, according to the city’s lawsuit.

Some residents in the 10-unit building grew annoyed by strangers constantly showing up with luggage.

“It’s been 3 a.m. and I’ve had people ringing my buzzer to get in,” said Ziograin Correa, 40, who lives in the building with his wife and six children. “They don’t have a key, so they ring my buzzer.”

IN CASE YOU MISSED IT

Microsoft Unveils New HoloLens 2 Augmented Reality Headset By Aaron Pressman

Net Neutrality Vet Marvin Ammori on Blockchain—and Why the Internet Is Still Great By Jeff John Roberts

Vodafone CEO Calls on U.S. To Show Evidence of Huawei Threat By David Meyer

Fortnite’s First World Cup Will Have a $30 Million Prize Pool. The Competition Kicks Off in April By Alyssa Newcomb

Charting the Rise of Surveillance Capitalism By Robert Hackett

BEFORE YOU GO

Where are the worms? A study in England revealed that worms are rare or absent in 20% of farmers’ fields. Meanwhile, the average field had “nine earthworms in every spadeful of soil, with top fields having three times that number.” Worms, of course, are important for soil health and water absorption and, in response to the study, farmers are pledging to change their cultivation practices in the low-worm fields.

This edition of Data Sheet was curated by Jeff John Roberts. Find past issues, and sign up for other Fortune newsletters.