This article is taken from the August-September 2024 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issues for just £10.

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Over a decade ago, the prime minister David Cameron appointed an ambassador to a road junction. No.10’s publicity stunt gave “Silicon Roundabout” — the name given to what the Government hoped would become a booming cluster of technology startups at London’s Old Street — a make-believe diplomatic status.

It was a surreal time. New Media gurus asked “What Would Google Do?” — consciously echoing the Imitatio Christi. The editor of Wired magazine, Chris Anderson, proposed in his book Free that we should consider abolishing the price of digital goods. Subtitled “The Future of a Radical Price”, the book was available in hardback for $29.99.

All this malarkey served a strategic purpose, however. It was brilliant propaganda, an exhibition of Californian passive aggression. The world would have to conform to Silicon Valley’s way of doing business. Thanks in no small part to the obsequiousness of our political class, and the negligence of regulators, the duopoly of Google and Meta today control two thirds of the gigantic digital advertising market.

The insistence on “free” would have a lasting, corrosive effect on other sectors of the economy — and we all pay the price through the inflated cost of everyday goods. In 2019 the UK’s Competition and Markets Authority (CMA) estimated that because of the tech duopoly’s stranglehold, each British household paid an extra £500. That figure is surely higher now, since Google’s revenue has doubled since Covid.

Competition authorities are finally catching up, but one facet of Big Tech’s supremacy has gone largely unexamined. This is the relationship between Big Tech and privacy interests, specifically the burgeoning blob spanning academia and NGOs. Data processing companies like Google and their watchdogs should have an antagonist relationship — but in reality, it’s a symbiotic relationship. Big Privacy is a sort of controlled opposition, one precluding alternative economic models from developing.

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For many years our policy intelligentsia had no interest in how Google and Facebook made money, but five years ago the policy class found a way to understand it. Harvard Business Professor Shoshana Zuboff popularised the phrase “Surveillance Capitalism”. At the same time another phrase gained popularity: “You are the product!” Both aphorisms fizz with conspiratorial energy, but both are problematic.

The problem is that data is a one-sided deal: we cannot negotiate a price for it

The trouble with “Surveillance Capitalism” is that it really isn’t really capitalism, nor, arguably, is it even surveillance. The engines at the heart of Google and Meta’s businesses are huge electronic trading exchanges — the largest unregulated exchanges in the world. In milliseconds, they match buyers and sellers. The buyers bid on anonymised profiles based on our habits and behaviour, and don’t know, or need to know who we are. By contrast, when we opt into a supermarket loyalty scheme such as Nectar, it identifies us precisely, and has our purchase history to hand. So why are we invited to care very much about one, but not the other?

Some of the blame can be laid at the door of the Germans, for whom the Stasi is a living memory. From the early 1990s, German politicians relentlessly campaigned for stricter EU data processing laws. When an Austrian student called Max Schrems noticed that Facebook was following him around the internet by placing a tracking cookie on his computer, he began a sequence of strategic litigation that blew apart the multilateral legal framework between the EU and the USA.

The European Court of Justice ruled that the US was not a safe place to process the personal data of Europeans. We all now live in Schrems’s and Zuboff’s world. To Zuboff we’re helpless victims of Big Tech; lacking the agency to make choices, we are ruthlessly exploited. It seems to suit both sets of professionals just fine.

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The symbiosis of privacy watchdogs and the companies they claim to monitor was evident when Covid struck. Privacy groups claimed that the contact-tracing apps developed by the UK, French and some other authorities were unsafe — they were not genuinely anonymous. Apple and Google instantly conjured up an alternative technology framework, blessed by the academics and NGOs.

The lead developer of this Big Tech-blessed alternative framework had been awarded $75,000 by Google, and the academic leading the campaign in the UK was a co-author, so not exactly disinterested. Hancock caved — but at the cost of “digital sovereignty” and public health.

Silicon Valley has also been funding these watchdogs for years. A sequence of class action privacy lawsuits in the US against Facebook and Google resulted in large payouts to the privacy NGOs who had brought the action, but not to the consumers apparently wronged. Through a quirk of class action law, these settlements allowed the intermediary to steer where the compensation went. It was all very cosy.

The relationship has had its most lasting effect in precluding competition. For example, the privacy priesthood demanded tracking cookies be prohibited, but as the CMA and other regulators have noted, Google’s successor architecture (codenamed “Sandbox”) merely increases Google’s monopoly power, for it can acquire traffic it needs through its other channels. The open market competitors cannot.

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The privacy lobby has been most useful in depressing demand for alternative economic models. For example, several high profile industry figures have called for some form of data ownership right to redress the balance towards the individual. Sir Tim Berners-Lee’s Solid project is one example. Computer scientist Jaron Lanier has a similar project, paying users for their data.

For Lanier, the problem is not that data has a monetary value, but that it’s a one-sided deal: we cannot negotiate a price for it. That price is set by Google and Meta. Marxist technology theorists such as Evgeny Morozov have decried Lanier and Berners-Lee’s efforts as “neoliberal”, but it’s hard to see how the public would object. We could do worse than offer them such a choice.

Until 2021, over a dozen privacy groups in the UK and Europe were funded by just one foundation: Luminate, established by The Omidyar Group. Luminate wanted to ensure the data ownership that underpinned alternative models — like Lanier’s and Berners-Lee’s — remained off the agenda. It emphasised “data stewardship” not “data ownership”, an arrangement in which individuals remain unable to negotiate a price. It has largely succeeded.

What results is an intellectual vacuum. Unfortunately, the Left, whilst critical of Big Tech, does not see markets as part of the solution. The abandonment of markets by self-styled “free marketers” is one of the peculiarities of the digital era. Our conservative think tanks have become lobbyists for Big Tech, with many paid to parrot the Silicon Valley line.

Everyone needs privacy, and data ownership brings us greater control. In a well-functioning marketplace, we wouldn’t need a privacy priesthood at all.