The Techlash After COVID-19

FILE PHOTO: An Amazon worker delivers packages amid the coronavirus outbreak in Denver, Colo., April 22, 2020. (Kevin Mohatt/Reuters)
It is likely to continue despite the tech industry’s admirable performance.

NRPLUS MEMBER ARTICLE T he technology industry’s rapid response to the COVID-19 pandemic has renewed appreciation for platforms and tools like Facebook and Zoom and given advocates a triumphant narrative to trumpet. But the “techlash” is far from over. COVID-19 and its long-term fallout may mark only the beginning, not the end, of heightened scrutiny of tech.

The techlash comes in many forms. The industry has been operating under the gimlet eye of politicians, regulators, and the media since the 2016 election. Social-media companies face charges that they amplify disinformation or censor marginal opinions, and their executives are hauled before congressional committees. Elsewhere, critics argue that the U.S. is in the middle of a long-term technological stagnation — that despite game-changing inventions like the Internet or smartphones, the industry has failed to deliver meaningful benefits to ordinary people. The brightest minds of the Gen-X and Millennial cohorts, these critics say, are addicting children to mental-health-threatening social-media platforms and creating increasingly derivative and frivolous applications.

Criticism has been bipartisan. Some on the right say that tech companies systematically discriminate against them. Others on the left say that the leading companies have become monopolies, using their power to subvert reform, subsume and destroy the competition, violate privacy, exploit gig-economy workers, and “move fast and break things” without consequence. Gone are the days when President Obama described the U.S. as “the nation of Google and Facebook” in his 2011 State of the Union address.

But the techlash, and in particular the argument that the tech industry cannot deliver tangible innovations, is momentarily on pause. During the current COVID-19 shutdown, tech companies big and small have made it possible for a considerable portion of the workforce to become fully-remote in a way unimaginable even 15 years ago, let alone during the 1960s. Gig-economy jobs are the only lifeline serving the skeletal remains of the restaurant and broader service industry. For many locked-in city-dwellers, an Amazon Prime membership, Netflix subscription, and the local Amazon-owned Whole Foods are the only stable features of their lives.

Those hit hardest, including shuttered small businesses fighting for PPP loan scraps and the millions of workers filing for unemployment, are struggling precisely because they cannot avail themselves of digital tools to weather the lockdown. Neither a flying car nor a more dispersed tech industry would change that. My organization has created a Wiki highlighting the ways that the industry has mobilized to confront the virus. Initiatives vary from Apple and Google’s contract-tracing project to Discord’s offer of free, invite-only class space for educators, and Facebook’s $100 million commitment to support the news industry as it suffers from the collapse of advertising during the pandemic. Likely a result of these initiatives, polling indicates that Americans are beginning to hold more positive views of the tech industry since the start of the crisis.

This warm reaction by the market combined with the early polls illustrates an important truth: the techlash was never about mass-consumer or voter rebellion against tech companies. Instead, it was an elite-level conflict between competing industries, governments, regulators, and the media.

Indeed, politicians who framed their campaigns around confronting the tech industry, like Massachusetts Senator Elizabeth Warren and Andrew Yang, failed to catch on with voters. To be sure, polls often demonstrate frustration with privacy issues and a lack of trust in the leading tech companies. But there is no evidence that such beliefs affected consumer behavior or are especially salient to American voters.

Which means that ordinary Americans’ gratitude for the tech industry is unlikely to assuage elite concerns. The current COVID-19 shutdown and forthcoming recovery will deepen, not arrest, the trends driving the techlash.

First consider the fallout from the economic crisis. Small and medium-sized businesses have been devastated, furthering the anti-consolidation arguments of antitrust advocates. Right on cue, Senator Warren and New York Representative Alexandria Ocasio-Cortez proposed legislation to prevent major mergers and acquisitions during COVID-19. In a turn from recent history and legal precedent, 21st century antitrust arguments are focusing less on consumer welfare and more on the power wielded by tech companies over industries and American society. No one is accusing Jeff Bezos and Mark Zuckerberg of price-gouging consumers. Amazon has not used its market position and the literally captive at-home audience to hike the price of Amazon Prime. As Zuckerberg has pointed out, Facebook makes money through advertising, not by charging its users. But, as critics have noted, duopoly dominance of the advertising market with Google has made it difficult for news publishers to compete for revenue. All of this occurs against the background of local, state, and federal government incompetence in the face of COVID-19. Consumers and voters may benefit from the status-quo, but tech’s elite-level critics and competition will be even more inflamed than before.

Meanwhile, the virus’s geopolitical consequences will intensify the terms of the conflict over tech. The Chinese Communist Party’s obfuscation about COVID-19’s origin and spread combined with its influence over the supposedly neutral World Health Organization makes U.S.–China great-power competition all the more relevant. As the new bipartisan consensus hostile to China emerges, tech companies whose workforces refused to work with the U.S. military yet held no qualms about entering the Chinese market will be unprepared to confront this dynamic. Consider Zoom, whose meteoric rise was hampered by the revelation of its ties to China. Tech companies unable to make the mental shift from the post–Cold War era of globalization and stability to one of zero-sum competition will find themselves in the crosshairs of government and public scrutiny.

The tech industry has performed admirably over the past few months. For the moment, even the industry’s critics acknowledge the importance of its products. However, it would be a mistake to conclude such sentiments neutralize the broader dynamics that have challenged tech since 2016. Rather than alleviate the pressure, this may usher in a heightened phase of the techlash.

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