What does FAANG mean?

 

We all know them and we all use them in our daily lives: starting when we check the news on our smartphone in the morning, track our running distance via our fitness watch or operate the infotainment system of our new electric car with voice control. We're talking about Google, Facebook, Amazon and other tech giants. These companies have taken the digital world by storm and are now the undisputed leaders of the global economy.

That's why people keep talking about the so-called FAANG companies, meaning Facebook, Apple, Amazon, Netflix and Google. Again and again, there are discussions about the monopoly position of the technology groups, whether in Europe or North America.

Many people do not even know how these companies earn their money. For example, Amazon generates a large part of its profit not in the e-commerce sector, but with the cloud offers of Amazon Webservices, which are also used by companies. BMW, for example, uses the services of Amazon Webservices and thus outsources parts of its IT infrastructure to Amazon.

Despite the now enormous influence of companies on our consumer behavior, people's opinions and also on large parts of the IT infrastructure, many people do not know how far the influence of these companies really goes. This raises the question of how companies deal with this responsibility to society and what influence society and the state have on large corporations.

What is Corporate Social Responsibility?

One of the most prominent buzzwords on this topic is Corporate Social Responsibility, or CSR for short. The German Federal Ministry of Labor and Social Affairs defines the term as follows: "Corporate Social Responsibility, or CSR for short, is the social responsibility of companies in the sense of sustainable business." A catchy definition, but what value does it have anyway? Starting this year, the EU has introduced a tightening of CSR reporting requirements to better monitor and compare the sustainability and social responsibility of companies in the European market. The problem with this regulation is that it is not due to come into force until 01.01.2024. Until then, there are even fewer mandatory standards for the reporting obligation of companies that do not have to be verified by external bodies.

How is CSR implemented?

So why are many companies so active when it comes to their corporate social responsibility? Quite simply, acting responsibly on a social and ecological level is ideally suited as a marketing tool. Developments in society have led to modern values being increasingly incorporated into everyday life and integrated into the social value system. Companies cannot afford bad publicity with regard to these socially critical issues. Because it leads to negative effects on the company's image and employer branding, and thus to lost sales and a drop in share prices on the stock market. That's why efforts are being made to implement issues such as equality, sustainability, data protection and much more in companies, but above all to communicate them to the outside world. On paper, at least. After all, how can we seriously monitor whether Google only uses sustainable electricity, does not sell our data to third parties, or treats its approximately 135,000 employees in an equal and gender-neutral manner? We have come back to the point of voluntariness.

What are the dangers?

The best-known risk is that the technology giants collect, analyze and also use a huge amount of personal data. They also see themselves as technology companies, not media companies. Therefore, they do not feel committed to media ethics. With regard to fakenews or hate comments, this is a problematic fact. However, this is not an easy situation for the companies either, because on the one hand, they are required to intervene in the case of extreme content, on the other hand, it is also dangerous that companies filter content and thus influence what users see and what they do not. This exerts considerable influence on our social values.

"It sows discord and weakens our democracy"

— Frances Haugen

A topical issue is the testimony of Facebook whistleblower Frances Haugen before the European Parliament committee. She began her speech with, "[...] because I am convinced that Facebook is dangerous for our children. It sows discord and weakens our democracy." She revealed that Facebook knowingly displays content to children and young people that negatively influences them, increasing the time users spend on the site. This increases advertising revenue. Significantly, a division of a major technology company is assigned to monitor suicidal behavior and intervene when necessary. Haugen also accuses Facebook's leadership of being in a constant conflict of interest between the common good and corporate profits. Criticism also repeatedly comes from internal employees, for example after the "Storming of the Capitol" on Jan. 6, 2021, when Facebook was accused of rushing to reverse security measures taken during the U.S. election. This, in turn, has led to a sharp increase in misinformation and thus is said to have encouraged the storm. Marc Zuckerberg, Facebook's CEO, must have spoken internally of a "dark moment" in the history of the United States.

"It's true, we can't force these companies to do the right thing."

— Luciano Floridi

Another danger is posed by the asset surplus of corporations, because the earned

money stays in the small circle of technology companies.

This is because they invest in technology and the development of new products. They can manage with comparatively few people and resources. As a result, the rich companies are getting richer and the users are becoming more and more dependent on the companies' complex digital ecosystems. Add to that the fact that digital corporations have rather low tax levies to contend with. Plans by the EU for stronger taxation of companies by means of an EU digital levy have stalled.

What options remain?

 

Regulation by the state or self-regulation by companies through social pressure are the two options available to us as a society. External regulation sometimes reaches its limits with these companies. This is due to the global size of the companies, but also to their complex and non-transparent organizational structures.

 

One possibility is to involve technology companies in political decisions. For example, discussions are currently underway at the European level about how to deal with artificial intelligence and what regulations would make sense. However, this discussion is taking place without the participation of the big companies. Strange, considering that they have to supply the technology and implement the rules.

After all, despite all the risks, these companies are essential for the research and development of new technologies, because they provide the capital, the know-how and the implementation of many promising technologies.

 

 

Autoren: Nickolas Weinberger, Daniel Will