Fair or Foul? Trust in Tech Reaches Alarming Levels
The Verge just reported something that got my attention…
“Big tech companies have turned the corner from friendly giants to insidious monopolies.”
The monopoly thesis is based on the $2.7 billion EU anti-trust ruling against Google and the possibility of similar legal action here in the United States.
But a fascinating survey was also published alongside the article. It took the temperature of 1,520 people and how they view Amazon (AMZN), Google (GOOG), Apple (AAPL), Microsoft (MSFT), Facebook (FB) and Twitter (TWTR).
Overwhelmingly, the respondents trust Amazon almost as much as their own bank. Google was a close second to Amazon in trustworthiness.
Microsoft and Apple fell into the middle.
And America doesn’t trust Twitter or Facebook.
So this got me thinking…
When people trust a corporate juggernaut as much as their own bank, is that signaling a problem?
I’ll bet many of you have granted your favorite tech company a “free pass” to construct a monopoly — just because you love their products.
Fair or foul?
Here’s what you need to know now.
A Shocking Imbalance of Trust
We entrust technology companies with an alarming amount of information. Much more so than banks.
But based on the survey, I’m convinced that consumers rate their level of trust based on what these companies do with this information.
Banks, for instance, make little use of data beyond assessing your creditworthiness.
So using this logic, it makes sense that consumers rank Amazon the highest (even if the trust is misplaced). Similar to banks — it does nothing with our information that consumers deem threatening.
The company has oodles of information about you. But it doesn’t use that data beyond leading you to products that you may find interesting.
It also makes sense that Facebook and Twitter rank at the bottom.
These companies know all about your embarrassing moments.
They have a library of your unguarded remarks. And if you’re a heavy user of their services, their AI has a pretty good idea of what kind of person you are.
Now, this was mildly creepy when this information was only used to target you with appropriate advertisements.
However, it has been well publicized that Twitter and Facebook are increasingly seeking to censor the items and tweets on their systems. In other words, they can ban you for any reason.
For most people, that is a step too far in the direction of Big Brother. So the low position on the survey is appropriate.
What’s unsettling about the survey is the amount of trust people have in Google.
With its monopoly on search — along with its operating system and Gmail — it has gigantic amounts of information on its customers. And like Facebook and Twitter, it has a nasty tendency to censor and ban.
So what gives?
It’s possible that consumers are fooled by Google’s “Don’t Be Evil” slogan. (Honestly, that alone has always made me deeply suspicious of the company’s services.)
It’s also possible that people realize they cannot escape its reach. And they’re simply equating dominance with trustworthiness.
Either way, the privacy issue is becoming increasingly salient as the Facebooks of the world expand their reach.
If we’re scared of Big Brother — and someone we get to vote into office every four years — we should certainly be wary of unelected heads of mega-corporations that possess infinite data about us. (Speaking of the president… Trump’s policies are unleashing a tidal wave of cash worth $11.7 quadrillion. Here’s how to get in on the action.)
Even Amazon shouldn’t be safe from skepticism. Be warned!
What Amazon Can Teach Our Government
I’m an Amazon junkie.
I won’t throw any numbers out there. But let’s just say — with a newborn and little patience for long lines at brick-and-mortar shops — my wife and I do a lot of business with Amazon.
And frankly, I don’t know many people who don’t.
The fact is… Amazon makes life a whole lot easier for its customers — from ecommerce to video streaming to hosting web data for other businesses.
And when things go wrong, they’re quick and relentless in their pursuit of righting their mistakes.
Sure, the company is shockingly big and powerful. And they’ve got their flaws like any other company. (AmazonFresh, I’m looking at you!)
But they do a better job of taking care of their customers than, say, the U.S. federal government does.
It’s not rocket science: The better you take care of your customers, the more they will trust you.
Amazon has been accused of annihilating some of America’s strongest retailers and killing the economy by cheapening goods across the board.
Spare us the bull, will ya…
Amazon is giving the people what they want: cheap stuff, delivered right to their doorstep in two days or less.
Man, if that’s a crime… throw the 85 million happy Prime subscribers in jail along with Amazon.
If more businesses — and governments — operated the way Amazon does, imagine how bright our world would be.
Technology runs our lives. From smartphones, laptops and apps… to social media, streaming video and cloud computing — the list is endless.
Amazingly, most of these vital services are provided by only a handful of companies. Like Alphabet, Apple, Facebook, Amazon and Microsoft.
So it’s a fair assessment to say we unknowingly trust them to a large extent. But it’s a foul proposition.
They’re not set up to look after us. Yet they have more intimate details about our everyday lives than some of our closest human relationships.
While some companies like Apple have a strong track record of respecting our privacy, it’s not guaranteed to continue.
And then there are companies like Facebook. It’s notorious for amassing and violating users’ privacy in legal (but nonetheless unsavory) ways.
CEO Mark Zuckerberg has endured multiple public dustups because of the company’s questionable practices with user data.
This isn’t surprising, nor is it likely to end. Why? Because Facebook generates 97% of its revenue from serving ads.
In other words, Facebook’s user is the product! Scary but true. Which is why I’ve never joined the social network.
The more we use various technologies, the more valuable our user data is destined to become.
At some point, it’s going to be too tempting to not violate our trust to generate revenue. Sadly, Facebook’s practices won’t be the exception; they’ll become the norm.
Bottom line: Tech giants provide tremendous utility. There’s no denying it. Over 70% of Americans believe their services have had a positive (or at least somewhat positive) effect on society, according to a recent Axios/SurveyMonkey poll. But utility isn’t the basis for trust. Blindly trusting tech behemoths is a risky proposition. So don’t do it.
Ahead of the tape,
Chief Investment Strategist, Wall Street Daily
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