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Monday, March 27, 2023

The Big Tech purge may be good for America and the world

Today’s business headlines herald a harsh reality for Big Tech: Twitter turmoil; meta fusion; atrophy in Alphabet; settings on Amazon. Layoffs, declining inventories and lower valuations are the hallmarks of the moment.

The Big Tech malaise is unfolding before our very eyes.

While the tech downturn wasn’t unexpected, it’s not entirely unpleasant.

Some might even consider it a relief.

Nobody, not even investors, seems to be crying over the tech sector.

After a decades-long bull run, now comes the decline, the break, the denouement. After all, irrational exuberance can only last so long.

Investment analysts are issuing warning guidance. S&P large-cap stocks take comfort in the fact that they are not alone during the recession. Misery loves company.

Congress, the FTC, and the DOJ have had the Big Tech titans in their sights for years, but they haven’t been able to pull the trigger.

The tide may be turning.

The comeuppance in Washington may be slow, but it happens. A new Congress will surely focus on the well-documented missteps of Amazon, Google, Meta, and Twitter, to begin with. That would be a reduction with a dash of Republican fervor in the House.

Fatigued by its failure to protect our data and respect our privacy, we may be better off for Big Tech’s downfall. Ecclesiastes reminds us that there is a time and a season for everything. For Tech, punishment has been a long time coming.

To many, Big Tech has become insufferable, taking advantage of its largesse to thwart legislation, regulation, and reform. Believing that the federal government is irresponsible, Silicon Valley has been impervious to Washington conventions. His stance of enlightened elitism, smug self-satisfaction, and unearned exceptionalism permeated Washington for years. Once again, that may be coming to an end.

The recent drop in Big Tech stocks and the decline of its leaders offer a good time to pause.

This may be a pivotal moment for the country as social, economic and security concerns are being examined under new lenses.

Policymakers can be deliberate rather than timid in addressing the full range of technology policy issues. Your former deference to industry dictates can now be reviewed and reversed.

Taken together, these developments are good, not just for Americans but also for the world. They enable the industry to adapt to today’s economic realities and recalibrate its C-suite leadership for tomorrow’s workforce.

Of course, losing money is never good for investors, be they retail or institutional. Many 401k funds withered before our eyes. But the stock price is just one indicator of the problems Tech is afflicted with. While the broader societal problems are more fleeting, they cannot be ignored. The expression of political speech and the protection of children are notable problems, as are privacy, cybersecurity and discrimination in the industry.

Witness Elon Musk’s content moderation advice: a noble notion but difficult to implement fairly and efficiently. And Meta’s moral issues are no longer a secret on campus among scholars. All of which has to be handled, and soon.

A clear vision will allow us to take Big Tech for what it is: warts and all. Although it has transformed the modern global economy, it is no longer the end point for unrestrained growth. Its social impact, both good and bad, cannot be questioned, but its unquestioned economic dominance should be.

With the resurgence of energy and transportation stocks, some question the viability of Big Tech companies as medium-term growth engines.

While rumors of Tech’s demise may be premature, it’s not too early to chart a more responsible course for the future, including true cooperation with European and US regulators on the biggest issues.

We can all be better for the fall of Big Tech, if only for the reason that it compels us to challenge what has become conventional.

Adonis Hoffman is CEO of advisory council, inc.. He is a former Chief of Staff and Senior Legal Advisor to the FCC and has held legal and policy positions in the US House of Representatives. He has also served as an Adjunct Professor at Georgetown University.

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