Big Tech Companies Want to Use Tax Dollars to Get More Power, Compete Against Banks
Remember when Google’s motto was, “Don’t be evil"? That single three-word phrase prefaced the company’s entire code of conduct for 17 years. It was a model for their employees’ behavior and a simple summation of the company’s philosophical outlook. But in 2018, Google surreptitiously removed the clause from all company documents. Google doesn’t use that motto anymore, and it’s all too easy to see why.
Google has developed an insatiable appetite for power, and over the past few years, it has engaged in increasingly dubious business practices to acquire it. The search engine giant is already actively censoring conservative voices on YouTube to prop up the company’s leftist ideological perspective. They’re also working hand-in-glove with the Chinese government to build a censored search engine befitting the needs of the authoritarian regime.
The company’s suppression of free expression has led it down an increasingly dark path—and it seems like other Big Tech firms are following suit. Other Silicon Valley leaders like Facebook have instituted similar rules and policies designed to silence opponents, control discourse, and aggregate power. And now, both Google and Facebook’s quest for power has extended beyond their own platforms, into the American economy more generally.
To further extend their leftist corporate influence, tech companies are pushing for a federal system of real-time payments (RTP) run by the Federal Reserve that would cost American taxpayers nearly $1 billion. And the Fed, in its shared insatiable desire for more power, is ready to give it to them.
New services like Google Pay and Amazon Pay, along with up-and-comers, like Facebook’s Libra initiative, allow consumers to pay for goods and services online, with instantaneous withdrawals and transfers. A federally established RTP system would—in theory—allow the Fed to facilitate the instant transfer of funds from disparate bank accounts. And on August 5, that’s exactly what the Fed proposed with a new system, known as FedNow.
The nation’s central bank facilitating the processing of real-time payments may sound like an attractive proposition, but it could crush the burgeoning private RTP marketplace and leave consumers with only a government option. Worse still, FedNow could allow Big Tech unprecedented access to the Federal Reserve—an opportunity that Google, Amazon, Facebook, and the rest won’t take long to exploit.
Currently, instantaneous payment transfer systems like Google Pay are operated through federally-chartered banks, with all the attendant checks, balances, and consumer protections of the regulations that govern them. Banks depend on their charters to exist, giving them strong incentives for compliance. By contrast, companies like Google are accustomed to ignoring the rules of the road, paying fines, and then moving on to continue collecting their billions. So, a federally run RTP system like FedNow that waives the requirement for businesses to work through a chartered bank inherently weakens consumer protections.
There would be protests in the street if the Fed allowed Goldman Sachs or Morgan Stanley to operate without bank charters and outside of U.S. banking regulations. The same should occur if it ends up giving such unchecked power to Silicon Valley. After all, even though Google Pay and other Big Tech payment services currently operate as financial institutions, their parent companies have already publicly exposed hundreds of millions of their consumers’ records—whether intentionally or not.
A long record of Silicon Valley companies playing fast and loose with users’ data and their seemingly selective approach to compliance with other regulations should be sufficient evidence to cause consumers alarm at the prospect of a FedNow system that further empowers them.
FedNow’s centralization of power fits perfectly with the marketplace concentration that companies like Google have been trying to achieve over the last several years. These mega businesses have slowly tightened their grip over consumers, controlling what they can say, what they can see, and with whom they can associate. They’ve managed this feat by becoming an essential feature of every Americans’ life and leveraging that reality to exert increasing degrees of control over the public. Granting these companies direct access to a federal system of real-time payments will only extend that control into ever more sensitive areas of consumers’ lives.
Digital companies, like Google, have shown they simply cannot be trusted to act independently in the best interests of their users. Instead, they will manipulate the system to achieve their preferred result: greater control.
Reigning in these companies is a complex challenge and a system like FedNow will only make it more difficult. The private sector is already operating the real-time payments marketplace on its own. Consumers don’t need the Fed’s big government power grab or its Big Tech empowerment plan.
Drew Johnson is the former national director of Protect Internet Freedom and currently serves as a senior fellow at the National Center for Public Policy Research, where he researches economic and tech policy issues.