Roger McNamee: “Why is it legal to collect data on kids, let alone sell it?”

Who owns your data?

It’s a question that is quickly becoming a political one, with legislators in California and Vermont passing data privacy laws that aim to establish individual rights around data and federal lawmakers discussing what a national privacy law would look like. For Roger McNamee, a storied Silicon Valley investor and early Mark Zuckerberg mentor who has recently become one of the company’s most outspoken critics, it’s a question that 2020 election candidates need to debate at the national level.

McNamee believes the most important question around data privacy is about determining when it’s legal for companies to share and sell data without customers’ knowledge or consent.

“Why is it okay for credit card companies to sell financial records?” McNamee said at the South by Southwest conference in Austin over the weekend. “Why is it legal for cell companies to sell location data? Why is it legal for companies that make apps for health and wellness to sell or trade our data? Why is it legal for anybody on the web to transact in our web history? Why is it legal to collect data on kids under 18, much less sell it?”

McNamee doesn’t have the answer to these questions, but he insists it’s important that we start asking them to determine where we as a society think the boundaries should be drawn around personal data. For instance, you might be fine with your credit card company recording your financial transactions, but not with the company selling your private information to someone else for their own profit. “It’s obviously okay to give your location to Uber,” he says. “It’s not okay for Uber to then take the location history and trade it to somebody else.”

In his effort to provoke a national conversation around data privacy and legality, McNamee offers a solution: employ antitrust law to jump-start competition and provide alternatives to giants like Facebook, Google, and Amazon. He’s not alone. Democratic presidential candidate Elizabeth Warren announced last week that she wants to use antitrust law to break up the tech giants, including Amazon, because of its practices of privileging its own products on its marketplace, and Facebook for its acquisition of competitors (Whatsapp, Instagram) and habit of crushing any others (Snapchat). Prominent legal scholar Tim Wu recently published a book focused on using antitrust law as the antidote to the mass corporate consolidations happening across industries and has written eloquently about why in the New York Times. In February, the FTC announced it will investigate how Big Tech is acting in an anticompetitive manner with a new task force.

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What GDPR misses

Europe has already taken aim at curbing tech companies’ power through measures like the General Data Protection Regulation, which is the strongest international law aimed at protecting users’ privacy. Interestingly, McNamee doesn’t advocate for more laws like GDPR, which he says take “[aim] at the wrong problem”: the data itself.

GDPR sets all kinds of restrictions around how companies can collect data, like ensuring that a user can be wiped from a system completely, rather than changing the incentive structure for businesses so they can make money without relying on personal data in the first place. Instead, he thinks regulators need to provide more incentives for different kinds of business models that could compete against Google and Facebook.

For instance, the tech giants track as much data as possible to feed algorithms that encourage people to modify their behavior in ways that are lucrative for the company–Facebook’s News Feed in particular encourages you to keep scrolling for more and more sensationalist content rather than engaging deeply with things that interest you, because the more time you spend on the platform, the better it is for Facebook. But a business model that doesn’t rely on data surveillance and instead is subscription-based could provide a healthy alternative. “The issue here isn’t that your data is out here,” McNamee says. “The issue is [companies like Google are] getting data that’s public, that should be protected for everybody. It’s like they put a fence around the park and now they’re charging admission.”

The promise of antitrust law

McNamee believes that proposals to break up the Big Tech companies using antitrust law, like Elizabeth Warren’s plan, are the ideal way to incentivize business models that aren’t based on surveillance and surreptitious data sharing and create more competition. Look to antitrust history. In 1956, AT&T settled with the Department of Justice, which limited the company from expanding beyond the telecom market–a move that effectively created the computer industry and Silicon Valley itself because it gave IBM the space to develop computing by licensing AT&T’s patent for the transistor. A second antitrust case against AT&T resulted in the DOJ breaking up the company in 1984, a move that “brought cell [technology] forward 10 years,” McNamee says. The 2001 case against a monopolistic Microsoft helped create the internet as we know it today because it forced the company to separate its Internet Explorer browser from its operating system and allowed room for competition.

McNamee thinks that antitrust is the right tool to use when tech companies get too much power because it encourages upstarts. “If you want to create a new tech industry, the best thing to do is create a fence around the monopolist,” McNamee says, using the same basic competition tests that President Teddy Roosevelt used for Standard Oil and other monopolies of the last Gilded Age.

He thinks those upstarts will be based on distributed, as opposed to centralized technology. One example? Cloud computing currently is based on giant companies like Amazon and Google that own and operate vast server farms that the rest of us use to power the internet. But McNamee would like to see similar storage and computing services that instead leverage the distributed network of smartphones, where each phone does a little bit of computing. Theoretically, more of your data could be kept locally on your phone that way, rather than zipping away back to the cloud so it can communicate with the mothership.

Of course, today’s tech giants don’t want any antitrust action that would directly break up their businesses, as Warren has threatened to do with Facebook. But it’s a mistake to think antitrust regulation would mean the end of these companies. Instead, it would just curb their growth and power so that the next line of companies has a chance to build and sell the next wave of groundbreaking technology and compete with them.

Antitrust law and the 2020 election

All of this depends on the government, which makes the upcoming 2020 election key. Which of the Democratic candidates has the best antitrust plan? According to McNamee, it’s Warren. He supports Warren’s proposal to break apart the Big Tech giants that have engaged in anticompetitive practices (something European commissioner for competition and tech watchdog Margrethe Vestager says is a last resort kind of measure in her book). McNamee has also met with 2020 candidate Amy Klobuchar’s staff and 2020 candidate Cory Booker. He says he is happy to help anyone else who is interested in advancing this kind of antitrust policy–including the Trump Department of Justice. Based on conversations he has had with officials in the administration, the DOJ is taking tech’s power seriously (though Trump’s administration has also been instrumental in gutting net neutrality, which is a key element of maintaining competition).

What’s at stake here? Avoiding a surveillance society where these corporations wield too much power over our lives, McNamee says. “I don’t want to live in a totalitarian country. I think that should apply to corporations as well as the government,” McNamee says. “My life is way more regulated by the codes and algorithms of these companies than it is by the law. There has to be a limit.”