Soros Says Google, Facebook Are Near-Monopolies That Spur AddictionBy
Billionaire calls for stringent regulation of tech giants
Social media risks empowering corporate, state surveillance
“They deliberately engineer addiction to the services they provide,” Soros said in a speech in Davos, Switzerland on Thursday. “This can be very harmful, particularly for adolescents.”
Soros compared the internet platforms to gambling companies, and said they may be permanently damaging human attention. Soros also said he’s extremely concerned that some social media and technology companies may fall into “unholy marriages” with regimes in Russia and China, creating a "web of totalitarian control.”
Facebook and companies from Twitter Inc. to Apple Inc. have been confronting a mounting backlash against technology and social media, as the public grapples with a constantly connected life in which they are exposed to fake or biased news and cyber-bullying.
Soros said the "network effect" that has propelled companies such as Facebook to dominance is "unsustainable," and predicted that Facebook will "run out of people to convert in less than three years.”
Soros Fund Management, his family office, owned some shares of Facebook and Google parent Alphabet Inc. as of Sept. 30. George Soros isn’t involved in the day-to-day management of that organization.
As the industry changes, a new business model at social media companies is emerging based not only on advertising revenue but on selling products to users, Soros said. The money manager warned that they exploit the data they control, bundle services and use "discriminatory pricing," which enhances their profitability but undermines “the efficiency of the market economy," he said.
A representative from Facebook had no comment on the remarks. A Google representative didn’t immediately return a request for comment.
Soros believes the monopolistic dominance of these companies will soon be broken by regulation and taxation, and that European Union competition chief Margrethe Vestager “will be their nemesis.”
Vestager said in an interview earlier this month that allowing advertisers to tailor political content to personal tastes on social media such as Facebook is a danger to democracy, according to interview in Vienna’s Der Standard newspaper.
"The fact that they are near-monopoly distributors makes them public utilities and should subject them to more stringent regulations, aimed at preserving competition, innovation, and fair and open universal access," Soros said.
It’s only a matter of time before the global dominance of these monopolies is broken and “Davos is a good place to announce that their days are numbered,” he said.
— With assistance by Sarah Frier, and Mark Bergen