Give and tech: Trump has been great for Silicon Valley
Those waiting for him to take any serious action against the tech giants should not hold their breath
Perhaps the most surprising thing about Donald Trump’s attack on the kings of Silicon Valley last week was that it took so long to come.
When Trump was elected almost two years ago, the tech elite feared a reckoning. Many of the Internet billionaires had backed Hillary Clinton, vocally and financially. Peter Thiel, the venture capitalist who sits on Facebook’s board, was vilified for supporting Trump. Since then, the tech world has done little to cover itself in glory.
A parade of scandals, from Facebook’s Cambridge Analytica crisis to Uber’s innumerable missteps, and an industry-wide inability to police their services have made tech’s biggest names easy targets for criticism. And yet, even when Mark Zuckerberg was dragged to Washington for hours of questioning in front of Congressional committees, Trump held his fire.The president has made a few digs at Amazon, a conflict that largely relates to Jeff Bezos’s ownership of The Washington Post, but even that has come to nothing so far. That all appeared to change last week, when Trump launched a broadside against Google that swiftly extended to Facebook and Twitter.
After disputed reports that Google searches about the president are overwhelmingly skewed to left-wing news sources, he accused the company of being rigged and said the situation “will be addressed”. Trump then accused Twitter of silencing right-wing voices, pointing to a recent decline in his follower count, and suggested Facebook was a monopoly concern.
If the Trump administration ever does take any serious action against the tech giants, last week may be the first chapter of that story. But those waiting for that to come should not hold their breath. The truth is that Trump has been nothing less than great for Silicon Valley, and there is little reason to expect that to change.
For evidence that Trump and tech have been great bedfellows, look no further than the share price performance of the biggest firms over the past 18 months. Apple’s are up 80%, and Google parent Alphabet’s more than 50%, in no small part down to an enormous Trump tax break that saw companies repatriate hundreds of billions of dollars.A business-friendly atmosphere, and the prospect of deregulation, has helped tech companies across the board. Trump has also proven himself willing to defend tech giants abroad. He has blocked Chinese takeovers of US companies – stalling the competition that US tech fears most – and stood on its side against Europe. When the EU fined Google a record amount for breaking competition law, he called it “one of our great companies”.
Privately, tech executives freely admit they find Trump highly disagreeable, but few criticise him publicly, besides coordinated statements on a handful of issues, in particular immigration.
It is hard to see Trump’s latest outburst changing that. In fact, his allegations of left-wing bias may even prove a useful political counterweight for the likes of Twitter and Facebook, which have long been accused of helping Trump on his way to power.
Tech bosses may hold their noses, but the truth is, they have done very well out of Donald Trump.
‘App tax’ under threat
While tech companies' corporate tax payments, or lack thereof, generate a lot of criticism, a tax of a different nature, paid to Apple and Google instead of the state, has become a contentious topic in Silicon Valley. The pair’s dominant smartphone app stores take a 30% cut on all spending.Given that apps are an industry worth tens of billions of dollars, the “app tax” has proven highly lucrative. Software companies and developers have long grumbled about the tax, which is almost pure profit for Apple and Google, but the matter now seems to be coming to a head.Epic, the developer of the gaming sensation Fortnite, has ended up in a public war of words with Google over the matter, having attempted to bypass the firm’s app store. Netflix was recently revealed to be testing a feature that would bypass Apple’s in-app subscriptions by sending users to its own website.
Google and Apple argue that by running their app stores, keeping them secure, and processing payments, they provide a valuable service to app makers, many of which are one-person operations. But the app tax looks to be under increasing pressure.
Google’s app store conduct was central to the EU’s recent antitrust fine against the company, and it may now have to open up to competition. Apple may have to follow if developers start getting a better deal on Google’s smartphones than on iPhones. That spells trouble for Apple in particular, which is relying on app revenues for much of its growth as iPhone sales stall.
A flurry of American electric scooter hire firms are smarting at regulators refusing to hand them operating licences in the UK. But they should tread carefully if last week’s events in San Francisco are anything to go by.After banning scooters several months ago, the city is now allowing their return. But last week it denied licences to Bird and Lime, the best-known companies, partly in retribution for flooding it with scooters without permission earlier in the year.
Uber, which has a history of legal troubles, was also given the cold shoulder.
As they expand globally, the heavily funded scooter start-ups will do well to observe that a cavalier approach to regulations has consequences.
– © The Daily Telegraph