Large technology companies will experience the same collapse in reputation as banks have endured in recent years unless they rapidly change their policy approach, business leaders have cautioned.
Their warning was directed at the influential heads of technology companies, such as the Silicon Valley giants, who were told they needed to recognise that self-regulation will not be sufficient to stave off mounting public alarm about issues such as privacy.
“Self-regulation, no matter what you do, is just not going to be good enough [for tech companies],” said Paul Achleitner, chairman of the supervisory board of Deutsche Bank. Addressing the Davos economic forum, he pointed out that a self-regulatory approach had been previously employed by banks — but notably failed to quell a political backlash against their over-reach.
His comments come amid growing opposition, particularly in Europe, to the cultural dominance of US tech giants such as Google and Facebook, fueled by concerns about widespread US internet surveillance and corporate tax avoidance.
Google has in particular found itself in the firing line with the European Parliament last month backing a motion calling on regulators to consider breaking up the company. The European Commission has also reopened an antitrust probe into the search giant. Uber, the taxi app company, has also faced fierce opposition from incumbent groups across Europe.
“Never assume that because something has been common practice [in the past] it will not be judged harshly in the future,” Mr Achleitner said. He argued that just as bankers had been surprised by the speed at which political attitudes towards them had changed during the 20th century financial revolution, tech leaders could be shocked by a similar shift in the “technology revolution” of the 21st century.
Fadi Chehade, president of the Internet Corporation for Assigned Names and Numbers, the main entity that organises web domains, said that the collapse of trust in technology companies could be “just as big” as it had been for banks.
“It’s real [as a threat],” he observed, adding that most tech leaders had been far too complacent about the reputational risks.
The comments are striking because in recent years the level of trust in technology companies has been extraordinarily high, relative to banks. Indeed, according to Edelman public relations group, confidence in tech has actually risen in most of the years since the financial crisis — while the reputation of banks has collapsed.
But this year, for the first time, there are signs that this trust in technology is slipping.
Whereas the state of finance — and financial regulation — has dominated debate in Davos in recent years, this year there is far greater focus on the implications of digital change, not simply in terms of its positive benefits but also the dangers this poses.
Get alerts on Davos when a new story is published