Matt Perault ‘02 is the director of the Center for Science & Technology Policy at Duke University and an Associate Professor of the Practice at Duke’s Sanford School of Public Policy. He served as a director of public policy at Facebook, where he led the company’s global public policy planning efforts on issues like competition, human rights, and law enforcement. Prior to Facebook, Matt was Counsel at the Congressional Oversight Panel, a consultant at the World Bank, and a law clerk for the U.S. District Court for the District of Columbia.
Neil Sehgal: You led Facebook’s global public policy planning efforts on issues ranging from law enforcement to human rights, and oversaw public policy for WhatsApp, Oculus, and Facebook Artificial Intelligence Research. What would you say was the toughest issue you dealt with during your time at Facebook?
Matt Perault: I don’t know if it was the toughest, but the seminal issue for me was dealing with the Edward Snowden disclosures. When that story broke in the Washington Post, there were some fundamental factual inaccuracies in the way it was framed. It stated that the NSA had direct access to tech company data, which wasn’t accurate. It made it sound like there was a pipe going through tech companies to the US government, funneling user data to them. And that’s not correct. There were individualized requests from the NSA to tech companies, and tech companies complied with lawful requests as required under US law. So, we had to set the record straight on what was and was not accurate. We had to look for ways to reassure our user base that we protected the information that they shared with us.
We also wanted to make a push for sensible legal reforms that would help reassure people about the relationship they had with their tech companies. That was really challenging and interesting work, and it was very fulfilling. We ended up developing a set of principles in partnership with nonprofit organizations, academics, other companies, and government representatives around how to approach requests for information. Those principles ended up being enacted in legislation called the Cloud Act.
Neil: What was most effective in helping reassure the user base?
Matt: The core strategy was to focus on legal reforms and to push the government to narrow the scope of government surveillance. So we created, along with other companies, the Reform Government Surveillance Coalition, a coalition that worked on surveillance reform.
Neil: Elizabeth Warren has said that, if elected in 2020, she would break up the giants of the tech industry including Facebook. Warren says she wants to “restore the balance of power in our democracy, to promote competition, and to ensure that the next generation of technology innovation is as vibrant as the last.” Would you say she’s misdiagnosing the problem?
Matt: I think there’s far more competitiveness in the tech sector than many people seem to believe. For instance, people allege that Facebook is dominant in the market for social networks, and Google is dominant in the market for search, but they seem to fail to recognize that Google and Facebook compete. There are few people in Silicon Valley — few engineers who build products — and few salespeople who work on selling digital advertising — who would say that Facebook and Google don’t compete with each other. In addition, the data that I’ve seen shows Facebook’s and Google’s share of the digital advertising market is actually falling. A lot of people throw around numbers that 80% of the digital ad market is Facebook and Google, and I haven’t seen data to suggest that that’s the case. The numbers that I’ve seen show that Google and Facebook combined have about 61% share of the digital advertising market. And it’s important to note that Google and Facebook are two separate companies. Google is somewhere around 35% and Facebook is somewhere around 25%. So that’s not a level of concentration that I think justifies breaking up large companies. There’s active competition.
A second question is whether the remedy of breakup is a good one. In terms of addressing concerns that people have about social media, it doesn’t seem like the right remedy. People are concerned about things like privacy, harmful content, and whether companies are protecting their platforms against potential security breaches during an election. All of those things are things that larger companies likely are able to do more effectively than smaller ones. Facebook has about 30,000 employees devoted to safety and security issues. There are very few companies that can devote that many resources to safety and security issues. So if you’re concerned about issues like safety and security, it’s not clear to me that breaking up companies is going to result in better products.
There are also questions about whether smaller companies are better at protecting privacy. I’ve seen statistics that show that a significant percentage of small businesses aren’t in compliance with GDPR, for instance. There’s also active competition in terms of providing products that are less private. One good example is TikTok, which is made by a Chinese company. It was the most popular app in the iOS app store in 2018 and in the first quarter of 2019. And TikTok is focused on public sharing, not private sharing. It seems to me it’s possible that if the government breaks up tech platforms, then the innovation may actually be in the direction of less privacy, not more.
Neil: If the market really isn’t as concentrated as people are saying if Google and Facebook really aren’t dominant in the advertising industry, why are politicians and the press focusing on the issue to this extent?
Matt: There are strong political incentives to be critical of the tech industry, and when you put Facebook and Google in a headline, people click on the headline and that’s good for the press. But I think that if you were to take really aggressive action against tech companies, there would be lots of people who would be frustrated with the results. It’s not clear to me that people want to pay for Gmail or want to see less relevant ads in their search results or on a social media platform. The policy proposals to me that are on the table now seem like they may very well constitute good politics, but I’m not sure that they’re good policy.
Neil: Do you think there is a presidential candidate that gets regulation around big tech ‘right’?
Matt: I think there is a lot of room right now for stronger policy proposals regulating tech companies, and I haven’t seen a lot of those in the current political climate. I think there is definitely an opportunity to come up with what those policy proposals might look like and to figure out if there are ways to get those ideas into the political debate. It’s what I am most interested in doing at Duke.
Neil: One area you focused on at Facebook was competition. The tech companies that seem to be getting the worst rap for anti-competitive behavior are Apple, Google, Amazon, and Facebook. Noticeably absent is Microsoft. Right now, Microsoft is waging a campaign with Teams against Slack and Zoom and Asa Butterfield, the CEO of Slack, has even said he views Microsoft’s conduct towards Slack “surprisingly unsportsmanlike.” Why do you think Microsoft has evaded US regulators’ scrutiny? And, do you think there are other instances of this conduct by other companies that are being overlooked?
Matt: The concentration data that I’ve seen suggests that there are larger concentration issues in other sectors like pharmaceuticals, beer, and airlines. If you’re most concerned about anti-competitive conduct, it’s not evident that you’d look first at the tech sector.
Neil: I’m curious as to what you think about the idea of ‘techlash.’ In the past few years, besides the government getting more involved, we’ve seen the press taking a more critical tone. They’ve moved from gadget lust to a more critical tone. And we also see more novels and movies like Black Mirror painting more dystopian pictures of where tech is taking us. A NBC/WSJ poll from earlier this year found that 60% of respondents did not trust Facebook to protect their data. The poll also found that more than half of Americans view Facebook and social media in a negative light. And yet, the behavior of the real-world marketplace suggests there really is no tech backlash. According to Facebook’s most recent quarterly report, usage, user growth, and revenue are all growing. Despite the FTC’s 5-billion-dollar record fine, profit was still $2.6 billion. This is all to suggest that the tech backlash isn’t real or isn’t really affecting tech companies. What do you make of this?
Matt: I think there is undoubtedly a techlash. I think you can see that just from looking at media sentiment numbers. If you look at the positive versus negative stories about tech in the New York Times in the last five years, for instance, you can see a really significant change in sentiment numbers. My guess is that the techlash is having an effect and it’s certainly having an effect for certain companies, at least for trust metrics. I think people still generally like their tech products, but that doesn’t mean they don’t have concerns about them
Neil: Lastly, what single issue in tech policy are you most concerned about?
Matt: The one I’m most concerned about is how hostile people seem to be to the idea that expression on tech platforms is a good thing overall. Obviously, there are downsides, but attempting to mitigate the downsides is far preferable to policy solutions that would severely curtail speech on platforms, such as Twitter’s recent ban on political advertising. And I find those types of solutions to be troubling.