In an interview with BBC’s Amol Rajan, Google CEO Sundar Pichai shares his views on a wide range of topics including the free and open internet, privacy, Google’s market dominance and tax habits, capitalism, advertising, quantum computing, and artificial intelligence.
Here is a round-up of what he said, but more importantly, what he did not.
On the free and open internet
Countries are restricting the flow of information and stronger voices should advocate for an open and free Internet: When asked about what he thinks about the Chinese type of internet being in the ascendant, Pichai said: “I think the free and open Internet has been a tremendous force for good. But then in each country now there’s a debate about what speech is okay and what should be allowed. Many countries around the world are restricting the flow of information. And I think we are drawing much more rigid boundaries.” Pichai added that stronger voices and big companies should advocate for the free and open internet, which is being attacked. “I hope we can stand up, particularly in countries with strong democratic traditions and values,” Pichai said.
- What he didn’t say: A veiled reference to India’s IT Rules? Although he does not explicitly name any country, Pichai’s comment could very well apply to India’s new IT Rules, which have been challenged by numerous petitions for violating freedom of speech and right to privacy as well as being beyond the scope of the parent Act. While other major platforms like WhatsApp, Facebook, and numerous digital news media organizations have challenged the new IT Rules in court and Twitter has expressed its concerns over some provisions of the Rules, Google committed to complying with the Rules without any protest. [Nikhil Pahwa adds:] What Pichai didn’t say is whether Google accepts this drawing of rigid boundaries as a fact of life, and whether Google will choose to continue doing nothing about the attacks on the free and open Internet in India, and instead of standing up, continue sitting by the sidelines.
Google has no plans of going back into China: When asked if Google will consider going back into China even while its authorities insist on surveillance and control, Pichai said: “None of our major products and services are available in China. We have no plans to bring them in. And if we ever decide to do that, we would do it in an open way.”
- What he didn’t say: Although Pichai says that Google will bring products to China in an “open way”, history suggests otherwise. Remember the Dragonfly project? In 2018, it was revealed that Google was secretly developing a search engine for China that is compatible with the country’s censorship laws. The project was shut down in 2019 after protests from Google employees
Does Google get rich by selling detailed user profiles to advertisers? In response to Rajan’s question on what Pichai has to say to those who think Google is a company that builds very detailed profiles on all its users and gets rich by selling them to advertisers, Pichai argues that that company actually uses very limited contextual information for advertising and most of the data they store in products like Gmail and Photos are not needed.
- What Pichai didn’t talk about: The fact that Google uses this data for its own benefit. One of the main criticisms against Google is that it promotes its own services like Google Shopping or Google Maps over competitors when users search for something. A Markup article revealed that 63% of web searches on Google end on Google’s own websites, thereby suggesting that Google’s aim is to keep users within its “walled garden,” not to provide the most relevant information.
More information asymmetry in the past: Citing Shoshana Zuboff’s The Age of Surveillance Capitalism, Rajan said that big tech companies got rich by tracking the online behavior of users and now have the biggest asymmetry of knowledge in history. Pichai retorted saying that there was more asymmetry in the past because very few people had access to knowledge like they do now. “Today there’s more access to information at someone’s fingertips than at any point in humanity’s history,” he added. Pichai also argued that they collect user information to provide services that customers want and the company’s “north star is listening to them and making sure we are making that experience better.”
- What he didn’t talk about: Just because there was more information asymmetry in the past, does not mean the asymmetry in the current world is acceptable. Pichai does not address the fact that big tech companies collect huge troves of data from users and use this to model their behavior and earn revenues from it. Zuboff’s argument is that these companies are unchecked in their power to observe and shape the thinking and decisions of people.
Privacy-preserving technologies work like encryption: Pichai said that as part of the Privacy Sandbox initiative, Google is investing in “privacy-preserving technologies, which still allows us to give users the benefit they want, allows business models to exist on the Internet, but keeps it free and open.” Pichai compares these technologies to encryption, saying that we can “give users the privacy, but allow for the right transaction to happen.”
- What Pichai didn’t talk about: The competitive advantage this gives Google. As part of its Privacy Sandbox initiative, Google is phasing out third-party tracking cookies, but this has come under the scrutiny of antitrust watchdogs because it “could cause advertising spend to become even more concentrated on Google’s ecosystem at the expense of its competitors,” the UK antitrust watchdog stated. Representative Kelly Armstrong (R-ND) in a US anti-trust hearing highlighted that despite being a good move from a privacy perspective, Google’s decision to retire third-party cookies give Google a huge competitive advantage because Google has alternative means of collecting user data to inform its digital advertising activities, unlike the third parties.
Need more frameworks like GDPR: Pichai said that GDPR is “great” because it “gives companies a certain framework by which they can operate and comply with and give users guarantees too. I think we’ll need more things like that over time.”
- What Pichai didn’t talk about: One of the main arguments against the EU’s GDPR is that it places onerous compliance burden on small and medium enterprises because they are not equipped to bear the costs like larger companies are. Does Google actually think GDPR is beneficial to users or is it something that it likes because it is easy for big companies to comply with?
Company has grown and matured in terms of data collection: Back in 2010, Google was forced to apologize because it was revealed that for four years, Google’s streetcar cameras were going around the cities of the world scraping public Wi-Fi information including some online behavior for which the company did not seek any permission. “Doesn’t that undermine your case that you guys believe in privacy,” Rajan asked. “It was a mistake in terms of the data being collected inadvertently, a pretty big mistake,” Pichai conceded. “But it has influenced how we develop products since then. I would say today we are a lot more methodical, cautious, and think through all the implications before we would build something like that. And so as a company, we have grown and matured,” he added.
- What Pichai didn’t talk about: Does Google use data from rival apps to build competitors? In a US antitrust hearing, Representative Joe Neguse (D-CO) cited a Verge article as per which Google has an “Android Lockbox” that gives the company access to information on how Android users use non-Google apps and services, including how long they are open and for how long they been in use. Pichai did not clarify if Google has used this data to develop competing apps, which if true, contradicts his comment. [Nikhil adds:] many of the products from Google’s Next Billion Users team were ripoffs of similar popular apps in the market.
Google will need less data over time: Pichai also stated that over time Google can do all that it is doing now with lesser data by using a technique called Federated Learning. “So when you’re now typing in our Google keyboard, we need to learn new words and phrases. But we do that without your data ever leaving the device. So we are investing in techniques like that,” he said.
- What Pichai didn’t clarify: Why did Google merge data from DoubleClick? In a US antitrust hearing, Representative Val Demings (D-FL) pointed out that when Google purchased DoubleClick, a tool for advertisers in 2007, despite the Congress’ concerns about the kind of user data Google would have access to, Google had testified before the Senate antitrust subcommittee that it wouldn’t merge this data. But in 2016, Google merged this data, “effectively destroying anonymity on the internet”, under the authorization of Pichai. Demings concluded that this meant that because of its enormous market power, Google did not have to worry about user privacy in 2016 anymore. And since more than 80% of Google’s revenue comes from ad placements, Google has no incentive to stop using behavioral ads, she pointed out.
On Google’s market dominance
Alphabet companies can become independent over time: When asked if Alphabet can ever be too big, Pichai said that the structure is set up in such a way that individual companies under Alphabet can one day become independent.
- Will Google ever be split up? While Alphabet subsidiaries like Waymo, Deepmind, and Verily can be turned into independent companies, the more important question is if Google, the most prominent subsidiary by far, will ever be split up if it becomes too big. In a US antitrust hearing, Pichai suggested that breaking Google into different businesses, such as YouTube and ad tech, would cause prices to increase and consumer choice to reduce.
Is Chrome dominant? Rajan points out that Pichai in 2009 lobbied the European authorities to break up Microsoft’s dominance of the Web and asked him if Chrome is now taken that position. “For me, all that matters is people should have a choice to use what they want to. I would make a case that the browser market is very competitive. I see people use different browsers all the time and people may use a particular product because they like it more and it gives them benefits,” Pichai said.
- What Pichai didn’t talk about: Why is Chrome bundled into agreements with smartphone manufacturers? Google has been accused of bundling its own apps like Chrome and Gmail into Android phones that want access to the Play Store. The European Commission fined Google for this practice in 2018. If Pichai believes that people must have a choice, why make it compulsory for smartphone manufacturers to provide Chrome.
We try to be pro-competitive, but want others to validate it: Pichai said that the company does internal reviews before launching products or buying other companies to ensure that its move is pro-competitive and pro-innovation, but it wants others to validate it and it welcomes the scrutiny of antitrust watchdogs for this reason. “With success comes scrutiny. I think I’ve always felt it’s appropriate for companies like ours to be scrutinized,” Pichai said. He also added that the company takes a constructive approach by working on the feedback and rulings given by regulators.
- What Pichai didn’t talk about:
- How will Google respond to rulings that require it to break up? The Department of Justice and other US states have sought to prohibit Google from engaging in antitrust behavior, and break up the company if needed. It used the legal phrase ‘structural relief’ that refers to forced break-up and spin-offs. How will Google respond if the US or other countries ask it to break up?
- But does Google make exclusionary deals? Google has repeatedly been accused of using its dominance to make exclusionary deals with smartphone manufacturers such as Apple for making Google the default browser and Android device manufacturers for preinstalling core Google apps.
On news media and advertising
Has Google killed traditional advertising? “News used to be funded by advertising. And these days, most advertising takes place on platforms like yours because you made it more effective. Do you accept that your business model has fundamentally undermined the capacity of news organizations to raise money through traditional advertising?” Rajan asked. “The internet has been a tremendous disrupter to the news industry. Advertising has clearly been impacted. As an advertiser, you’re looking at efficient ways to reach people, and internet companies definitely offer scale,” Pichai said. “But I would argue that the underlying disruptor is technology,” he added.
- What Pichai didn’t talk about: Google’s monopoly in digital advertising. In a US antitrust hearing, Representative Pramila Jayapal (D-WA) pointed out that Google controls 50%-60% of the ad exchange market, and by virtue of controlling middlemen like Google’s Display & Video 260 and Google Ads, it controls 90% of the buy-side market.
Google provides traffic to new sites: “We would make a strong, robust economic case today as to how we provide traffic: 24 billion visits per month to news organizations around the world and we are committed to doing more,” Pichai said. “We have invested in subscription products and we recently announced a billion-dollar licensing program through News Showcase,” he added.
- What Pichai didn’t talk about: Google’s Ad Exchange’s conflict of interest. In a US antitrust hearing, Representative Pramila Jayapal (D-WA) explained that since Google is running the marketplace (via Ad Exchange), it controls the buy-side, and through the middlemen like Google Ads, it also controls the sell-side, thereby rigging the entire process. As a result, Google can set low rates as a buyer of ad space compared to newspapers, thus depriving them of ad revenue, and then sells it for higher revenue to small businesses who depend on Google for advertising. She likened this to an unregulated stock market that allows insider trading.
Do you anticipate similar legislation to the Australian model around the world? “In Australia, they’ve passed this new law which will require digital platforms like Google to pay publishers to link to their content. Do you anticipate similar legislation to the Australian model around the world?” Rajan asked. “There are countries where we’ve been proactively doing deals with publishers and different countries have different concerns,” Pichai said. “Even in Australia, we were able to constructively engage and I think they were able to achieve their goals. We fought for some important principles around how the Internet works, and they took that feedback into account, too. So I think we reached a good place eventually,” he added.
- Does Google agree that there is an unfair balance here? Let’s take an example: A user searches “Australia bushfires” on Google. She finds several results from news websites on the first page of the search results. When she goes to the “News” tab of the search results, she would find even more results, each with snippets or summaries from news reports. After reading this snippet, she might not want to click on the link anymore. Similarly, news reports shared on Facebook also have snippets and summaries attached within. Hence, in both cases, Google and Facebook have received online traffic but deprived the news websites of the same. This ultimately leads to a drop in digital ad revenue for the websites. Does Google agree that there is an unfair balance here?
- Why has Google not complied with France’s rulings? Google was recently fined $593 million for failing to comply with the French antitrust watchdog’s orders on how to conduct talks with the country’s news publishers in a row over copyright. If Google is willing to engage with governments on this front, why didn’t it comply with France’s rulings?
Why should anyone pay tax if the richest are avoiding it legally? “In the UK last year, you had revenues of $1.8 billion. Profits alone rose from $182 million to $226 million. But you only pay 50 million in tax because you use Dublin as your European headquarters. Why should anyone pay tax if the richest are avoiding it legally?” Rajan asked. “We don’t approach it that way,” Pichai responded. “We’ve committed to hiring more engineers in Europe and in the UK. And we’ve been doing that over time because today the tax construct arises from where you develop R&D and where your products originate and are developed,” he added. Although the majority of Google’s taxes are paid in the US, “we support the global or OECD conversations figuring out what is the right way to allocate taxes,” Pichai said.
- What Pichai didn’t talk about: what does Google think of the Equalization Levy, commonly known in India as Google Tax? In 2016, the Indian government imposed a 6% equalization levy on payments for digital advertisement services received by foreign companies without a permanent establishment in India. This was introduced because existing tax structures meant that US companies paid taxes there even for revenue that was generated from activity in India. But the US government has threatened retaliation against such levies?
Don’t have the Bermuda tax structure anymore: “In 2019 it was revealed that you guys shifted $23 billion through a Dutch Shell company to Bermuda. And I know companies don’t pay income tax there. A lot of people would say that this kind of mechanism weakens the collective sacrifice and it shows that this idea of ‘Don’t be Evil’ to be a kind of sham,” Rajan said. “We don’t have that structure anymore and that structure didn’t impact any of the tax we would pay in the UK,” Pichai retorted.
- Will Google offer reparations for its tax avoidance? Pichai saying that Google does not have the Bermuda structure anymore does not absolve it from the fact that it did use such structures from 2004-2019 to legally pay lesser taxes in most countries it operates in. Why was the company using such practices and how much did the company save by using such practices? More importantly, will Google offer any reparations to countries for tax avoidance?
- Could you commit to pulling Google out of tax havens? “If you say that you’re not using that particular structure anymore can you commit right here, right now to say that you will pull Google out of tax havens,” Rajan asked. Pichai remained evasive and merely repeated that Google does not use the Bermuda tax structure anymore.
On capitalism and economic inequality
Does the wealth work its way down to the workforce? In response to whether Google’s wealth works its way down to its workforce, Pichai implied that the value creation coming out of the internet is different. “We are giving every business tremendous infrastructure and tools to reach beyond your physical border. A small bike company in a rural part of the world can now reach people anywhere else in the world. And that wasn’t possible a few decades ago,” he said.
- How are Google’s contractors paid? In response to Rajan’s question Pichai, although Pichai did not give a straightforward answer, the Google CEO can argue that Google’s full-time employees are well paid. The more important question is how does Google treat its contracted workforce. Reports suggest that contract workers are paid lesser for the same type of work.
We track economic activity we impact: When given the fact that Google’s three-month revenue was more than the entire gross domestic product of Mali and asked to what extent the company is the cause of inequality, Pichai replied that in a capitalist system people on the top make a disproportionate share but as a company, Google tracks the economic activity it has in terms of helping other businesses get online and establish themselves. “In the US last year we created $420 billion of economic activity, and same in the U.K. and so on,” he said.
On Artificial Intelligence
Global coordination needed for peaceful coexistence with AI: Drawing parallels to the international efforts to mitigate adverse efforts of climate change, Pichai explains that global frameworks and constructs are needed to truly solve for peaceful coexistence with AI. But he does admit that there will be a competitive aspect to it and different nations will use AI for different ends.
- What is Google doing in terms of ethical AI approaches? Google is at the forefront of technologies like AI and is well ahead of governments in terms of understanding this space. So what matters is how Google is ensuring that AI research and development is done ethically and in a way that does not harm society because this will shape the way in how governments approach this issue.
Most profound technology that humanity will ever develop: When asked how AI and Quantum Computing are going to compare with the Internet in terms of a total transformation of our lives, Pichai said that he views AI as the “most profound technology that humanity will ever develop and work on, but we have to make sure we do it in a way that we can harness it to society’s benefit.” In addition to giving simple, everyday examples like curating a personalized playlist and designing a workout routine, Pichai said that AI will play an important role in healthcare such as acting as an assistant and flagging worrisome trends when a radiologist is looking at a scan.
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