Tech

Shira Ovide is a Bloomberg Gadfly columnist covering technology. She previously was a reporter for the Wall Street Journal.

What do Democratic Senator Cory Booker, White House strategist Steve Bannon and the successor to the Ma Bell telephone monopoly have in common? They all think America's technology titans are too big and powerful.

The growing might of Google parent Alphabet, Apple Inc., Facebook and Amazon has been a recurring theme, particularly since last year when America's five tech kings became the five most valuable public companies in the world.  The companies themselves haven't quite figured out how to deal with the hand-wringing over their power coming from politicians, regulators, academics and corporate enemies.

This backlash is one of the most serious business risks for America's tech superpowers, and they need to develop a coherent message fast. 

Bow to the Tech Overlords
The five biggest companies in the world by stock market value -- and 7 of the top 10 -- are tech companies
Source: Bloomberg

I was surprised this week when Google executives seemed awkward addressing analysts' questions about regulatory investigations and data-privacy policies. At one point, Google CEO Sundar Pichai sounded as if he would have preferred to be trapped in Antarctic ice rather than tackle a query that touched on the company's move to combine data from several of its web services to improve ad targeting.

Mind you, the company first announced in 2012 that it was starting to share user information among Google services such as search and YouTube, and privacy watchdogs have howled about all subsequent policy changes that further mingle its troves of user data. When Pichai was asked whether Google's ads are more effective because of this data sharing, he vaguely talked about respecting users' privacy and being "thoughtful."

It's also possible European antitrust czars might eventually force Google to change its popular shopping ads in search results or how it distributes apps on Android phones. These changes could hurt Google financially, but Pichai and Alphabet Inc. Chief Financial Officer Ruth Porat either deflected questions on this or said Google would be fine if had to stop bundling many of its apps on Android smartphones. (If that's true, then why does it strike deals to ensure a number of its apps are pre-installed on Android smartphones?) 

I don't want to overplay a few moments on an earnings conference call. But Google and the rest of the world's biggest tech companies now have problems everywhere. Thailand's king cracked down on Facebook Inc. because he was unhappy with images of himself. Canada's top court wants to change how Google search results are displayed globally. The U.S. Treasury Secretary hinted on Wednesday that the administration might target how Amazon.com Inc. handles sales taxes on products sold by independent merchants through its website.

Monopolized
Google and Facebook's combined revenue from advertising is equivalent to more than one-fifth of all worldwide spending on ads
Sources: Google, Facebook and industry estimates from Magna Global
Note: These figures use Google's total reported advertising revenue, which includes the cut of ad sales it distributes to its partners.

Big Tech needs to learn how to competently discuss these issues with investors and the public. Somehow even the experience of the Edward Snowden intelligence leaks -- to which the tech giants were slow to respond -- didn't teach them a lesson.

The tricky thing is that discomfort about the tech superpowers is amorphous. There's no single policy issue or piece of legislation for the tech companies to rally around. It's all fragmented global issues stemming from general mistrust of companies that touch so many aspects of people's lives. 

It's hard to have a coherent message about such hard-to-grasp concepts. Nevertheless, tech companies need to do better. Backlash is the cost of being successful. Figure it out.

A version of this column originally appeared in Bloomberg's Fully Charged technology newsletter. You can sign up here.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Shira Ovide in New York at sovide@bloomberg.net

To contact the editor responsible for this story:
Daniel Niemi at dniemi1@bloomberg.net