This article is an excerpt from the Shortform book guide to "The Four" by Scott Galloway. Shortform has the world's best summaries and analyses of books you should be reading.
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Why is Big Tech bad? How, exactly, do these companies harm society?
Scott Galloway identifies five ways in which the Four (Amazon, Apple, Facebook, and Google) have negatively impacted society. He discusses job destruction; prioritizing profit over privacy, national security, and democracy; tax avoidance; elimination of competition; and contributing to the decline of the middle class.
Read more to learn how Big Tech companies inflict damage in their fight for market dominance.
The 5 Ways Big Tech Harms Society
Why is Big Tech bad? Galloway explains this in his book The Four. Here’s a synopsis.
#1: Job Destruction
While the Four’s products and services fulfill some of our deepest human needs, they’re also taking away our livelihoods, says Galloway. The Four destroy more jobs than they create. In particular, he notes, Amazon’s emphasis on automation and Facebook and Google’s massive advertising capabilities are eliminating jobs in their own and their competitors’ workplaces.
For example, Amazon eliminates jobs by automating its warehouses. In addition, Amazon Go, a cashier-less store, has pushed other retailers to work on eliminating their checkout process. This could ultimately lead to the loss of 3.4 million more jobs.
Just as Amazon is eliminating jobs through automation, Facebook and Google are eliminating jobs in the advertising industry. Because advertising is a low-growth industry, Galloway says it’s essentially zero-sum: Facebook and Google can’t grow without taking money and jobs away from other advertising firms. In addition to destroying jobs in the advertising industry, Facebook and Google’s digital advertising capabilities are also hastening the decline of print media such as newspapers and magazines, which rely on advertising to survive.
#2: Prioritizing Profit Over Privacy, National Security, and Democracy
The Four also prioritize profit over privacy, national security, and democracy in improper and even nefarious ways, argues Galloway. For example, Amazon infringes on our privacy by listening in on our conversations via Alexa and mining all of our consumer data.
(Shortform note: Not only is the Amazon algorithm “listening” to our conversations, but actual humans are as well: In order to improve Alexa’s performance, Amazon employees transcribe and annotate the device’s recordings. Google and Apple do the same with Google Assistant and Siri, respectively.)
Meanwhile, Galloway says, Apple endangered our national security by refusing to comply with a court order requiring it to unlock the iPhone of a domestic terrorist who killed 14 people in a 2015 mass shooting in San Bernardino.
(Shortform note: Apple’s refusal to comply with the court’s order resulted in a legal and media battle in which law enforcement argued that Apple’s encryption was making iPhones “warrant-proof.” In response, Apple argued that creating software to unlock iPhones would compromise the security of its customers’ personal information and encourage countries like China or Russia to infringe on the privacy of its citizens. The FBI ultimately paid a third party to unlock the terrorist’s phone.)
But, according to Galloway, Facebook is perhaps the worst offender, engaging in actions that threaten our very democracy. He discusses the scandals involving the improper use of Facebook customers’ personal data and the allowance of Russian ads that influenced the outcome of the 2016 election. Galloway explains how the platform’s ad policy contributes to political polarization. He also claims that Facebook’s refusal to take responsibility for fake news on its platform is undermining American democracy.
| Tech Platforms’ Responsibility for User Content While Galloway points out generally that the US government has shown reluctance to regulate the Four, he doesn’t mention the primary reason why Facebook has been able to avoid responsibility for the truth of its content: The government has passed laws that actually make it easier for Facebook to escape such liability. In particular, Section 230 of the Communications Decency Act gives computer service providers immunity from liability for any harmful third-party content posted on their platforms. Section 230 permitted the Four and other Big Tech companies to grow rapidly without having to invest in content moderation or police potentially harmful content. Given how much technology has advanced since the law was passed in 1996, and the evidence that’s accumulated about the harm social media content can cause, many experts now advocate for updating Section 230 to make platforms like Facebook more responsible for user content. |
#3: Tax Avoidance
Furthermore, the Four actively avoid paying taxes. Galloway says the Four have the resources and political clout to take advantage of the complex tax code, finding legal loopholes that allow them to pay much less in taxes than other companies.
For example, Apple uses an accounting trick to hold $250 billion in tax havens overseas. While the average tax rate for S&P 500 companies between 2007 and 2015 was 27%, the Four paid significantly less than that: Amazon paid 13% of its profits, Apple 17%, Google 16%, and Facebook only 4%.
(Shortform note: Since The Four was published, governments have become increasingly critical of the Four’s tax avoidance tactics. A 2019 report found a gap of $155.3 billion between the expected taxes and the taxes actually paid by the Four, along with Netflix and Microsoft, over the preceding nine years. As of 2020, 137 countries were working with the European Union and the Organization for Economic Cooperation and Development to find a solution to the problem of how to more fairly tax Big Tech.)
#4: Elimination of Competition
Galloway reserves some of his harshest criticism for the Four’s efforts to eliminate their competition. While large, powerful companies always have a competitive edge, Galloway argues that the Four wield their size and power unfairly to purposefully eliminate competitors from the market. As we’ll explore in this section, they do this in three ways: by purchasing competitors; by forcing competitors out of business; and by engaging in underhanded tactics such as breaking promises, borrowing, and stealing.
Purchasing Competitors
The Four are so massive and have so much capital that they can simply acquire any competitor that poses a threat to them, at prices smaller companies could never afford. A striking example of this is Facebook’s purchase of WhatsApp, a five-year-old instant messenger company with only 50 employees, for $20 billion.
Forcing Competitors Out of Business
The Four can also afford to lose money in the process of forcing their competitors out of business, argues Galloway. In addition, the Four use their money and power to prevent competitors from entering the market in the first place by constructing infrastructure so massive that smaller companies can’t compete.
Breaking Promises, Borrowing, and Stealing
Galloway says that the Four have managed to grow quickly in part by engaging in questionable tactics such as breaking promises, as well as borrowing and even stealing ideas from other companies or from users themselves.
#5: Contributing to the Decline of the Middle Class
People blame globalization and immigrants for the death of the middle class, says Galloway, but Big Tech is also responsible: The Four concentrate wealth in a small group of workers and investors and leave others behind. They create an elite tech workforce where there’s no place for the average worker.
For example, Facebook only employs about 25,000 people and pays them handsomely. In contrast, in the industrial age, companies like GM and IBM employed hundreds of thousands of workers and spread the wealth out more evenly.
(Shortform note: While Big Tech alone might not be responsible for the decline of the middle class, research supports Galloway’s more general conclusion that when the rich get richer, the middle class suffers—even if the size of the middle class remains the same. Studies show that when the gap between the wealthiest Americans and the middle class grows too large, the institutions required for a strong and stable middle class begin to deteriorate. The most affluent Americans often reduce their participation in public institutions and infrastructure that the middle class relies on—such as public schools, health insurance, security, transportation, and the energy grid—thus depriving these institutions of a key part of their financial base.)
Exercise: Consider How the Four Have Affected Your Life
Galloway argues that the Four have had an outsized influence on our personal lives as well as on society at large. Consider how the Four have affected your own life, either directly or indirectly.
- Galloway claims that the Four have eroded our privacy and undermined our opportunities for career advancement. Do you believe that these practices have affected you personally? If so, explain how.
- Galloway claims that the Four have used their size and power to engage in myriad unfair and harmful practices, such as destroying jobs, avoiding taxes, eliminating competitors, undermining democracy, and contributing to the decline of the middle class. Do you believe that any of these practices have affected your life, either directly or indirectly? If so, identify the practice and explain how it’s affected your life.
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Like what you just read? Read the rest of the world's best book summary and analysis of Scott Galloway's "The Four" at Shortform.
Here's what you'll find in our full The Four summary:
- A hard look at the success of Amazon, Apple, Facebook, and Google
- How The Four have had a profound and negative impact on our society
- How to make it in the cutthroat economy created by The Four
