Attention in Washington D.C. is fixed on an impeachment inquiry opened by Democratic House Speaker Nancy Pelosi into President Donald Trump — but another set of federal probes, spread across two branches of government and multiple agencies, aims to determine whether tech giants like Amazon (AMZN), Apple (AAPL), Google (GOOG, GOOGL), and Facebook (FB) wield too much power and influence.
In a newly released interview, taped in June, former Cisco CEO John Chambers said the “government will regulate and antitrust will come,” unless the tech giants in and around Silicon Valley change how they do business. “It is coming,” he adds of government action.
“The Valley has made several mistakes, some of the large companies here, of getting too far away from the citizens, doing what you should never do, in my opinion,” he says, “which is lecturing others about how they ought to live their lives, or what's important to them, or what political candidate they ought to back or not.”
“A different form of capitalism and a different form of technology capitalism has to happen,” he adds.
In June, the Department of Justice and the Federal Trade Commission reportedly reached an agreement to divvy up responsibility for investigating each of the big four tech companies. The Department of Justice would investigate Google and Apple, while the Federal Trade Commission would probe Facebook and Amazon.
Heads of the two agencies reportedly told a Senate subcommittee last Wednesday that there has been disagreement about how to divvy up the investigation into big tech.
Calls for investigating and regulating the tech behemoths have been percolating for several years. But the drums really began beating after the 2016 election with reports of Russian interference on Facebook, Instagram, Google’s YouTube, and Twitter (TWTR).
Chambers made the comments during a conversation that aired in an episode of Yahoo Finance’s “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
For a decade, Chambers ran internet hardware company Cisco, growing the business to yearly revenue of nearly $50 billion. He’s currently the CEO of the firm JC2 Ventures, where he funds and advises startups. He also guides Indian Prime Minister Narendra Modi and French President Emmanuel Macron on how to make their countries favorable to startups.
Besides antitrust concerns, there have been other issues that have drawn the attention of regulators and critics: alleged stifling of free speech on social media, Google’s dominant market share in search, and Amazon’s powerful position in e-commerce.
In a Hill-Harris X poll in March, 48% of Republicans said tech companies should be regulated, and 44% of Democrats agreed.
Chambers gave advice to tech giants under fire, saying “the classic rule is when you have a major crisis or issue coming at you, first, don't hide.”
“Be visible — visible to all constituencies,” he adds. “Secondly, be very realistic how much was self-inflicted, how much was the market as a whole. And express it in simple-to-understand terms. Third, paint the picture of where you're going to go, how you're going to get there, and what are the milestones along the way.”
“Fourth, as you go through this, give regular reports on that. And then fifth, go to each of the constituencies — your shareholders, your customers, your employees, the citizens, the government leaders — and share with them what you're going to do,” he says.
Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.