In 1999, Oracle CEO Larry Ellison suspected that Microsoft was secretly funding the seemingly independent advocacy groups that were loudly defending Microsoft amid a heated antitrust investigation. Seeking proof, Oracle’s law firm hired Terry Lenzner, a private investigator from Washington, DC, who had dug up dirt on Bill Clinton’s female accusers. Lenzner found receipts tying Microsoft to the Independent Institute, including an invoice from the group for a full-page newspaper ad supporting Microsoft’s position. Reporters soon learned that Lenzner got the intel by paying a janitor to riffle through Microsoft’s trash.
When Ellison was asked about the oppo-research scheme at an unrelated Oracle press conference, the CEO claimed he had just learned about the “unsavory” tactic, but nonetheless defended the mission as a “public service.” He added, “All we did is try to take information that was hidden and bring it to light.”
Oracle’s approach may have been unsavory but it wasn’t unusual. Lenzner already had a Rolodex of clients in Silicon Valley, including Microsoft, whose own CEO had instigated a whisper campaign against a critical reporter a few years earlier. In the end, everyone understood that, if challenged, tech companies would tackle corporate public relations with the zeal of a political campaign—discrediting critics, forging alliances with adversaries, and deflecting scrutiny to competitors.
A couple of decades (and zero federal antitrust charges) later, dominant players have refined their approach. The most recent example: Facebook’s efforts to undermine critics with a PR campaign that simultaneously attacked George Soros using anti-Semitic tropes, and complained that attacks on Facebook were themselves anti-Semitic, according to an investigation in The New York Times. The story described how Definers, a Republican opposition-research firm hired by Facebook, used NTK Network, an alleged “fake news shop,” to spread good stories about Facebook and bad stories about its competitors, even as Facebook vowed to clean up the fake news on its platform.
In the endless pinball game of Facebook scandals, this one kept getting bumped to the top.
Big Oil. Big Tobacco. Big Tech?
Facebook’s willingness to play dirty raises broader questions—not just what dark arts tech companies employ, but also: Why did we expect any different? When their growth or profit is challenged, Facebook and its big brothers borrow a page from the playbooks of threatened behemoths in industries like tobacco and oil, deceiving lawmakers, funding their own experts, and working to forestall regulation. Facebook has executed the strategy so successfully that for a time this summer, its market cap was greater than Exxon’s and Altria’s combined.
What was different was the way Big Tech cloaked itself in idealistic rhetoric about freeing information, connecting the world, and spreading democracy, even as, in Facebook’s case, it ignored ethnic genocide in Myanmar, flouted fair housing laws, and instructed a WhatsApp founder to mislead antitrust regulators.
Through feel-good moments like the Arab spring, people believed them.
Even now, in the midst of a brutal backlash, the industry benefits from the revisionist narrative that it just started getting its hands dirty. No lawmaker wants to grind America’s best economic hope to a halt.
But the calculation changes if big tech is seen as an entrenched interest. Consider the question of whether online political ads should include the same campaign-finance disclosures as ads in other media. In April, Facebook and Google agreed to support proposed legislation to require the disclosures. In 2010 and 2011, however, both companies lobbied against requiring the disclosures. (Their pitch: Online ads are too small to let users know who paid for them.)
In fact, if you rewind the tape past the last presidential election, Facebook’s recent political fumblings sound less like a new low for big tech and more like a bungled version of Google circa 2011. The search giant’s transformation into a bipartisan Washington operator was inspired by a Federal Trade Commission investigation into Google’s dominance in search. A few days after then-Chairman Eric Schmidt was grilled on Capitol Hill, Google wooed conservative bloggers at the Heritage Foundation. Over time, this grew into an orchestrated campaign, paying experts to shift criticism away from policies that would hurt Google on issues like antitrust, privacy, and liability for the content on its platform.
In that light, one irony of Facebook COO Sheryl Sandberg digging into Soros’ “financial motivation” is that big tech already controls public debate—from the recent FTC hearings on monopolistic tech platforms, to the focus on government surveillance rather than corporate surveillance. Consider the fate of Open Markets Institute, a loud voice for using antitrust laws to rein in Big Tech, and one of the groups that Definers tried to discredit. Open Markets used to be part of a think tank called New America, where Schmidt is a big donor. For a time, their proximity was seen as an example that tech funding and tech criticism could co-exist. Until, that is, Schmidt got angry in 2017 when Open Markets praised the EU’s €2.5 billion antitrust fine against Google. Soon enough, New America and Open Markets had parted ways.
Much of the positive PR around Silicon Valley was, admittedly, a gift from contented consumers and myopic tech media. But slip-ups like Sandberg’s or Schmidt’s show what it takes for the most powerful companies in the world to keep up the good-guy facade.
Peter Thiel as Oracle
In a way, Zuckerberg’s mentor Peter Thiel foretold the free pass Facebook would get along the way.
In February 2009, Facebook was growing at a breakneck pace. The following month, Nielsen would report that Facebook’s popularity pushed social networking past email in terms of total time spent for the first time. By the end of the year, Facebook would add a million new users per day in 180 countries, thanks to a cost-saving tool that offloaded translation to users, journalist David Kirkpatrick wrote in his book The Facebook Effect.
In the midst of Facebook’s rapid expansion, Thiel told Kirkpatrick he was confident the company would avoid government intervention. “Facebook will have the maximum amount of legal and political leeway in a world where it’s seen as friendly and not threatening,” Thiel said. “I see it as a very hopeful sign that the company has made as much progress as it has, and has received as little resistance as it has. We’re at 175 million people [and] no lobbyists in Congress are arguing for Facebook to be shut down.”
The contrarian venture capitalist offered up other predictions for Kirkpatrick’s book, hypothesizing that Facebook would become “the purest expression” of “good globalization,” and that the social network’s key value would be adding “more tolerance” to a globalized world.
Nearly a decade later, Facebook’s effect on humanity appears to be careening in a different direction—and Thiel’s views on globalization have also since soured. Still, Thiel’s line about fast-growing companies seeming friendly turned out to be right on the money.