John Tye, the founder of Whistleblower Aid, a legal nonprofit that represents people seeking to expose potential lawbreaking, was contacted this spring through a mutual connection by a woman who claimed to have worked at Facebook.
The woman told Mr. Tye and his team something intriguing: She had access to tens of thousands of pages of internal documents from the world’s largest social network. In a series of calls, she asked for legal protection and a path to releasing the confidential information. Mr. Tye, who said he understood the gravity of what the woman brought “within a few minutes,” agreed to represent her and call her by the alias “Sean.”
She “is a very courageous person and is taking a personal risk to hold a trillion-dollar company accountable,” he said.
On Sunday, Frances Haugen revealed herself to be “Sean,” the whistle-blower against Facebook. A product manager who worked for nearly two years on the civic misinformation team at the social network before leaving in May, Ms. Haugen has used the documents she amassed to expose how much Facebook knew about the harms that it was causing and provided the evidence to lawmakers, regulators and the news media.
knew Instagram was worsening body image issues among teenagers and that it had a two-tier justice system — have spurred criticism from lawmakers, regulators and the public.
Ms. Haugen has also filed a whistle-blower complaint with the Securities and Exchange Commission, accusing Facebook of misleading investors with public statements that did not match its internal actions. And she has talked with lawmakers such as Senator Richard Blumenthal, a Democrat of Connecticut, and Senator Marsha Blackburn, a Republican of Tennessee, and shared subsets of the documents with them.
The spotlight on Ms. Haugen is set to grow brighter. On Tuesday, she is scheduled to testify in Congress about Facebook’s impact on young users.
misinformation and hate speech.
In 2018, Christopher Wylie, a disgruntled former employee of the consulting firm Cambridge Analytica, set the stage for those leaks. Mr. Wylie spoke with The New York Times, The Observer of London and The Guardian to reveal that Cambridge Analytica had improperly harvested Facebook data to build voter profiles without users’ consent.
In the aftermath, more of Facebook’s own employees started speaking up. Later that same year, Facebook workers provided executive memos and planning documents to news outlets including The Times and BuzzFeed News. In mid-2020, employees who disagreed with Facebook’s decision to leave up a controversial post from President Donald J. Trump staged a virtual walkout and sent more internal information to news outlets.
“I think over the last year, there’ve been more leaks than I think all of us would have wanted,” Mark Zuckerberg, Facebook’s chief executive, said in a meeting with employees in June 2020.
Facebook tried to preemptively push back against Ms. Haugen. On Friday, Nick Clegg, Facebook’s vice president for policy and global affairs, sent employees a 1,500-word memo laying out what the whistle-blower was likely to say on “60 Minutes” and calling the accusations “misleading.” On Sunday, Mr. Clegg appeared on CNN to defend the company, saying the platform reflected “the good, the bad and ugly of humanity” and that it was trying to “mitigate the bad, reduce it and amplify the good.”
personal website. On the website, Ms. Haugen was described as “an advocate for public oversight of social media.”
A native of Iowa City, Iowa, Ms. Haugen studied electrical and computer engineering at Olin College and got an M.B.A. from Harvard, the website said. She then worked on algorithms at Google, Pinterest and Yelp. In June 2019, she joined Facebook. There, she handled democracy and misinformation issues, as well as working on counterespionage, according to the website.
filed an antitrust suit against Facebook. In a video posted by Whistleblower Aid on Sunday, Ms. Haugen said she did not believe breaking up Facebook would solve the problems inherent at the company.
“The path forward is about transparency and governance,” she said in the video. “It’s not about breaking up Facebook.”
Ms. Haugen has also spoken to lawmakers in France and Britain, as well as a member of European Parliament. This month, she is scheduled to appear before a British parliamentary committee. That will be followed by stops at Web Summit, a technology conference in Lisbon, and in Brussels to meet with European policymakers in November, Mr. Tye said.
On Sunday, a GoFundMe page that Whistleblower Aid created for Ms. Haugen also went live. Noting that Facebook had “limitless resources and an army of lawyers,” the group set a goal of raising $10,000. Within 30 minutes, 18 donors had given $1,195. Shortly afterward, the fund-raising goal was increased to $50,000.
Fighting stalkerware is tough. You may not suspect it’s there. Even if you did, it can be difficult to detect since antivirus software only recently began flagging these apps as malicious.
Here’s a guide to how stalkerware works, what to look out for and what to do about it.
The Different Types of Stalkerware
Surveillance software has proliferated on computers for decades, but more recently spyware makers have shifted their focus to mobile devices. Because mobile devices have access to more intimate data, including photos, real-time location, phone conversations and messages, the apps became known as stalkerware.
Various stalkerware apps collect different types of information. Some record phone calls, some log keystrokes, and others track location or upload a person’s photos to a remote server. But they all generally work the same way: An abuser with access to a victim’s device installs the app on the phone and disguises the software as an ordinary piece of software, like a calendar app.
From there, the app lurks in the background, and later, the abuser retrieves the data. Sometimes, the information gets sent to the abuser’s email address or it can be downloaded from a website. In other scenarios, abusers who know their partner’s passcode can simply unlock the device to open the stalkerware and review the recorded data.
So what to do? The Coalition Against Stalkerware, which was founded by Ms. Galperin and other groups, and many security firms offered these tips:
Look for unusual behavior on your device, like a rapidly draining battery. That could be a giveaway that a stalker app has been constantly running in the background.
Scan your device. Some apps, like MalwareBytes, Certo, NortonLifeLock and Lookout, can detect stalkerware. But to be thorough, take a close look at your apps to see if anything is unfamiliar or suspicious. If you find a piece of stalkerware, pause before you delete it: It may be useful evidence if you decide to report the abuse to law enforcement.
Seek help. In addition to reporting stalking behavior to law enforcement, you can seek advice from resources like the National Domestic Violence Hotline or the Safety Net Project hosted by the National Network to End Domestic Violence.
Audit your online accounts to see which apps and devices are hooked into them. On Twitter, for example, you can click on the “security and account access” button inside the settings menu to see which devices and apps have access to your account. Log out of anything that looks shady.
Change your passwords and passcode. It’s always safer to change passwords for important online accounts and avoid reusing passwords across sites. Try creating long, complex passwords for each account. Similarly, make sure your passcode is difficult for someone to guess.
Enable two-factor authentication. For any online account that offers it, use two-factor authentication, which basically requires two forms of verification of your identity before letting you log into an account. Say you enter your user name and password for your Facebook account. That’s Step 1. Facebook then asks you to punch in a temporary code generated by an authentication app. That’s Step 2. With this protection, even if an abuser figures out your password using a piece of stalkerware, he or she still can’t log in without that code.
On iPhones, check your settings. A new stalker app, WebWatcher, uses a computer to wirelessly download a backup copy of a victim’s iPhone data, according to Certo, a mobile security firm. To defend yourself, open the Settings app and look at the General menu to see if “iTunes Wi-Fi Sync” is turned on. Disabling this will prevent WebWatcher from copying your data.
Apple said this was not considered an iPhone vulnerability because it required an attacker to be on the same Wi-Fi network and have physical access to a victim’s unlocked iPhone.
Start fresh. Buying a new phone or erasing all the data from your phone to begin anew is the most effective way to rid a device of stalkerware.
Update your software. Apple and Google regularly issue software updates that include security fixes, which can remove stalkerware. Make sure you’re running the latest software.
In the end, there’s no true way to defeat stalkerware. Kevin Roundy, NortonLifeLock’s lead researcher, said he had reported more than 800 pieces of stalkerware inside the Android app store. Google removed the apps and updated its policy in October to forbid developers to offer stalkerware.
But more have emerged to take their place.
“There are definitely a lot of very dangerous, alarming possibilities,” Mr. Roundy said. “It’s going to continue to be a concern.”
The changes have involved Facebook executives from its marketing, communications, policy and integrity teams. Alex Schultz, a 14-year company veteran who was named chief marketing officer last year, has also been influential in the image reshaping effort, said five people who worked with him. But at least one of the decisions was driven by Mr. Zuckerberg, and all were approved by him, three of the people said.
Joe Osborne, a Facebook spokesman, denied that the company had changed its approach.
“People deserve to know the steps we’re taking to address the different issues facing our company — and we’re going to share those steps widely,” he said in a statement.
For years, Facebook executives have chafed at how their company appeared to receive more scrutiny than Google and Twitter, said current and former employees. They attributed that attention to Facebook’s leaving itself more exposed with its apologies and providing access to internal data, the people said.
So in January, executives held a virtual meeting and broached the idea of a more aggressive defense, one attendee said. The group discussed using the News Feed to promote positive news about the company, as well as running ads that linked to favorable articles about Facebook. They also debated how to define a pro-Facebook story, two participants said.
That same month, the communications team discussed ways for executives to be less conciliatory when responding to crises and decided there would be less apologizing, said two people with knowledge of the plan.
Mr. Zuckerberg, who had become intertwined with policy issues including the 2020 election, also wanted to recast himself as an innovator, the people said. In January, the communications team circulated a document with a strategy for distancing Mr. Zuckerberg from scandals, partly by focusing his Facebook posts and media appearances on new products, they said.
The Information, a tech news site, previously reported on the document.
The impact was immediate. On Jan. 11, Sheryl Sandberg, Facebook’s chief operating officer — and not Mr. Zuckerberg — told Reuters that the storming of the U.S. Capitol a week earlier had little to do with Facebook. In July, when President Biden said the social network was “killing people” by spreading Covid-19 misinformation, Guy Rosen, Facebook’s vice president for integrity, disputed the characterization in a blog post and pointed out that the White House had missed its coronavirus vaccination goals.
“The internet is answering a question that it’s been wrestling with for decades, which is: How is the internet going to pay for itself?” he said.
The fallout may hurt brands that relied on targeted ads to get people to buy their goods. It may also initially hurt tech giants like Facebook — but not for long. Instead, businesses that can no longer track people but still need to advertise are likely to spend more with the largest tech platforms, which still have the most data on consumers.
David Cohen, chief executive of the Interactive Advertising Bureau, a trade group, said the changes would continue to “drive money and attention to Google, Facebook, Twitter.”
The shifts are complicated by Google’s and Apple’s opposing views on how much ad tracking should be dialed back. Apple wants its customers, who pay a premium for its iPhones, to have the right to block tracking entirely. But Google executives have suggested that Apple has turned privacy into a privilege for those who can afford its products.
For many people, that means the internet may start looking different depending on the products they use. On Apple gadgets, ads may be only somewhat relevant to a person’s interests, compared with highly targeted promotions inside Google’s web. Website creators may eventually choose sides, so some sites that work well in Google’s browser might not even load in Apple’s browser, said Brendan Eich, a founder of Brave, the private web browser.
“It will be a tale of two internets,” he said.
Businesses that do not keep up with the changes risk getting run over. Increasingly, media publishers and even apps that show the weather are charging subscription fees, in the same way that Netflix levies a monthly fee for video streaming. Some e-commerce sites are considering raising product prices to keep their revenues up.
Consider Seven Sisters Scones, a mail-order pastry shop in Johns Creek, Ga., which relies on Facebook ads to promote its items. Nate Martin, who leads the bakery’s digital marketing, said that after Apple blocked some ad tracking, its digital marketing campaigns on Facebook became less effective. Because Facebook could no longer get as much data on which customers like baked goods, it was harder for the store to find interested buyers online.
When New York City announced on Tuesday that it would soon require people to show proof of at least one coronavirus vaccine shot to enter businesses, Mayor Bill de Blasio said the system was “simple — just show it and you’re in.”
Less simple was the privacy debate that the city reignited.
Vaccine passports, which show proof of vaccination, often in electronic form such as an app, are the bedrock of Mr. de Blasio’s plan. For months, these records — also known as health passes or digital health certificates — have been under discussion around the world as a tool to allow vaccinated people, who are less at risk from the virus, to gather safely. New York will be the first U.S. city to include these passes in a vaccine mandate, potentially setting off similar actions elsewhere.
But the mainstreaming of these credentials could also usher in an era of increased digital surveillance, privacy researchers said. That’s because vaccine passes may enable location tracking, even as there are few rules about how people’s digital vaccine data should be stored and how it can be shared. While existing privacy laws limit the sharing of information among medical providers, there is no such rule for when people upload their own data onto an app.
sends a person’s location, city name and an identifying code number to a server as soon as the user grants the software access to personal data.
passed a law limiting such use only to “serious” criminal investigations.
“One of the things that we don’t want is that we normalize surveillance in an emergency and we can’t get rid of it,” said Jon Callas, the director of technology projects at the Electronic Frontier Foundation, a digital rights group.
While such incidents are not occurring in the United States, researchers said, they already see potential for overreach. Several pointed to New York City, where proof of vaccination requirements will start on Aug. 16 and be enforced starting on Sept. 13.
For proof, people can use their paper vaccination cards, the NYC Covid Safe app or another app, the Excelsior Pass. The Excelsior Pass was developed by IBM under an estimated $17 million contract with New York State.
To obtain the pass, people upload their personal information. Under the standard version of the pass, businesses and third parties see only whether the pass is valid, along with the person’s name and date of birth.
On Wednesday, the state announced the “Excelsior Pass Plus,” which displays not only whether an individual is vaccinated, but includes more information about when and where they got their shot. Businesses scanning the Pass Plus “may be able to save or store the information contained,” according to New York State.
Phase 2,” which could involve expanding the app’s use and adding more information like personal details and other health records that could be checked by businesses upon entry.
IBM has said that it uses blockchain technology and encryption to protect user data, but did not say how. The company and New York State did not respond to requests for comment.
Mr. de Blasio told WNYC in April that he understands the privacy concerns around the Excelsior Pass, but thinks it will still “play an important role.”
For now, some states and cities are proceeding cautiously. More than a dozen states, including Arizona, Florida and Texas, have in recent months announced some type of ban on vaccine passports. The mayors of San Francisco, Los Angeles and Seattle have also said they were holding off on passport programs.
Some business groups and companies that have adopted vaccine passes said the privacy concerns were valid but addressable.
Airlines for America, an industry trade group, said it supported vaccine passes and was pushing the federal government to establish privacy standards. The San Francisco Chamber of Commerce, which is helping its members work with Clear, said using the tools to ensure only vaccinated people entered stores was preferable to having businesses shut down again as virus cases climb.
“People’s privacy is valuable,” said Rodney Fong, the chamber’s president, but “when we’re talking about saving lives, the privacy piece becomes a little less important.”
“Reach leaderboard isn’t a total win from a comms point of view,” Mr. Silverman wrote.
Mr. Schultz, Facebook’s chief marketing officer, had the dimmest view of CrowdTangle. He wrote that he thought “the only way to avoid stories like this” would be for Facebook to publish its own reports about the most popular content on its platform, rather than releasing data through CrowdTangle.
“If we go down the route of just offering more self-service data you will get different, exciting, negative stories in my opinion,” he wrote.
Mr. Osborne, the Facebook spokesman, said Mr. Schultz and the other executives were discussing how to correct misrepresentations of CrowdTangle data, not strategizing about killing off the tool.
A few days after the election in November, Mr. Schultz wrote a post for the company blog, called “What Do People Actually See on Facebook in the U.S.?” He explained that if you ranked Facebook posts based on which got the most reach, rather than the most engagement — his preferred method of slicing the data — you’d end up with a more mainstream, less sharply partisan list of sources.
“We believe this paints a more complete picture than the CrowdTangle data alone,” he wrote.
That may be true, but there’s a problem with reach data: Most of it is inaccessible and can’t be vetted or fact-checked by outsiders. We simply have to trust that Facebook’s own, private data tells a story that’s very different from the data it shares with the public.
Mr. Zuckerberg is right about one thing: Facebook is not a giant right-wing echo chamber.
But it does contain a giant right-wing echo chamber — a kind of AM talk radio built into the heart of Facebook’s news ecosystem, with a hyper-engaged audience of loyal partisans who love liking, sharing and clicking on posts from right-wing pages, many of which have gotten good at serving up Facebook-optimized outrage bait at a consistent clip.
CrowdTangle’s data made this echo chamber easier for outsiders to see and quantify. But it didn’t create it, or give it the tools it needed to grow — Facebook did — and blaming a data tool for these revelations makes no more sense than blaming a thermometer for bad weather.
Critics of the state regulations warned that tech companies weren’t the only ones that would have to maneuver through the patchwork of rules. “For consumers, this means confusion,” said Daniel Castro, a vice president of the Information Technology & Innovation Foundation, a think tank sponsored by tech companies.
Apple and Google declined to comment. Jodi Seth, a spokeswoman for Amazon, pointed to an April blog post from the company’s policy executive Brian Huseman, who said the state laws risked creating a hodgepodge of regulations that wouldn’t serve users well.
Will Castleberry, Facebook’s vice president of state and local public policy, said that instead, the social network largely backed more federal legislation. “While we support state efforts to address specific challenges,” he said in a statement, “there are some issues, like privacy, where it’s time for updated federal rules for the internet — and those need to come from Congress.”
To fight against the splintering rules, the tech companies have gone on the offensive. While data on state lobbying is inconsistent and often underreported, Google, Amazon and Facebook funneled a combined $5 million into those efforts in 2019, according to the National Institute on Money in Politics, a nonprofit. The companies also increased their lobbying ranks to dozens in state legislatures compared with skeletal forces five years ago.
Let Us Help You Protect Your Digital Life
Some of the companies have also recently sent top engineers to kill state proposals. In February, Apple’s chief privacy engineer, Erik Neuenschwander, testified in a North Dakota Senate hearing to oppose a bill that would let app developers use their own payment systems and bypass Apple’s App Store rules. The bill died a week later in a 36-to-11 vote.
Even so, states have barreled forward.
Maryland lawmakers in February overrode their governor’s veto of a new tax on sites like Facebook and Google. The tax, the first aimed at the business of behavioral advertising, takes a cut of the money that the companies make from the sale of ads shown in Maryland. One analysis projected that it would raise up to $250 million in its first year, a fraction of Facebook and Google’s combined $267 billion in annual revenue, but a real threat if replicated across states.
Trade groups for Google, Amazon and Facebook tried to stop the tax. They hired a well-connected political consultant to argue that it would hurt small businesses. When that failed, the trade groups sued to block it. The litigation is pending.
HANOVER, N.H. — Sirey Zhang, a first-year student at Dartmouth’s Geisel School of Medicine, was on spring break in March when he received an email from administrators accusing him of cheating.
Dartmouth had reviewed Mr. Zhang’s online activity on Canvas, its learning management system, during three remote exams, the email said. The data indicated that he had looked up course material related to one question during each test, honor code violations that could lead to expulsion, the email said.
Mr. Zhang, 22, said he had not cheated. But when the school’s student affairs office suggested he would have a better outcome if he expressed remorse and pleaded guilty, he said he felt he had little choice but to agree. Now he faces suspension and a misconduct mark on his academic record that could derail his dream of becoming a pediatrician.
“What has happened to me in the last month, despite not cheating, has resulted in one of the most terrifying, isolating experiences of my life,” said Mr. Zhang, who has filed an appeal.
Dartmouth recently accused of cheating on remote tests while in-person exams were shut down because of the coronavirus. The allegations have prompted an on-campus protest, letters of concern to school administrators from more than two dozen faculty members and complaints of unfair treatment from the student government, turning the pastoral Ivy League campus into a national battleground over escalating school surveillance during the pandemic.
insecure, unfair and inaccurate.
cease using the exam-monitoring tools.
“These kinds of technical solutions to academic misconduct seem like a magic bullet,” said Shaanan Cohney, a cybersecurity lecturer at the University of Melbourne who researches remote learning software. But “universities which lack some of the structure or the expertise to understand these issues on a deeper level end up running into really significant trouble.”
At Dartmouth, the use of Canvas in the cheating investigation was unusual because the software was not designed as a forensic tool. Instead, professors post assignments on it and students submit their homework through it.
That has raised questions about Dartmouth’s methodology. While some students may have cheated, technology experts said, it would be difficult for a disciplinary committee to distinguish cheating from noncheating based on the data snapshots that Dartmouth provided to accused students. And in an analysis of the Canvas software code, The Times found instances in which the system automatically generated activity data even when no one was using a device.
“If other schools follow the precedent that Dartmouth is setting here, any student can be accused based on the flimsiest technical evidence,” said Cooper Quintin, senior staff technologist at the Electronic Frontier Foundation, a digital rights organization, who analyzed Dartmouth’s methodology.
Seven of the 17 accused students have had their cases dismissed. In at least one of those cases, administrators said, “automated Canvas processes are likely to have created the data that was seen rather than deliberate activity by the user,” according to a school email that students made public.
The 10 others have been expelled, suspended or received course failures and unprofessional-conduct marks on their records that could curtail their medical careers. Nine pleaded guilty, including Mr. Zhang, according to school documents; some havefiled appeals.
Dr. Compton acknowledged that the investigation had caused distress on campus. But he said Geisel, founded in 1797 and one of the nation’s oldest medical schools, was obligated to hold its students accountable.
“We take academic integrity very seriously,” he said. “We wouldn’t want people to be able to be eligible for a medical license without really having the appropriate training.”
Instructure, the company that owns Canvas, did not return requests for comment.
A Hunt Begins
In January, a faculty member reported possible cheating during remote exams, Dr. Compton said. Geisel opened an investigation.
To hinder online cheating, Geisel requires students to turn on ExamSoft — a separate tool that prevents them from looking up study materials during tests — on the laptop or tablet on which they take exams. The school also requires students to keep a backup device nearby. The faculty member’s report made administrators concerned that some students may have used their backup device to look at course material on Canvas while taking tests on their primary device.
administrators held a virtual forum and were barraged with questions about the investigation. The conduct review committee then issued decisions in 10 of the cases, telling several students that they would be expelled, suspending others and requiring some to retake courses or repeat a year of school at a cost of nearly $70,000.
Many on campus were outraged. On April 21, dozens of students in white lab coats gathered in the rain in front of Dr. Compton’s office to protest. Some held signs that said “BELIEVE YOUR STUDENTS” and “DUE PROCESS FOR ALL” in indigo letters, which dissolved in the rain into blue splotches.
Several students said they were now so afraid of being unfairly targeted in a data-mining dragnet that they had pushed the medical school to offer in-person exams with human proctors. Others said they had advised prospective medical students against coming to Dartmouth.
“Some students have built their whole lives around medical school and now they’re being thrown out like they’re worthless,” said Meredith Ryan, a fourth-year medical student not connected to the investigation.
That same day, more than two dozen members of Dartmouth’s faculty wrote a letter to Dr. Compton saying that the cheating inquiry had created “deep mistrust” on campus and that the school should “make amends with the students falsely accused.”
In an email to students and faculty a week later, Dr. Compton apologized that Geisel’s handling of the cases had “added to the already high levels of stress and alienation” of the pandemic and said the school was working to improve its procedures.
The medical school has already made one change that could reduce the risk of false cheating allegations. For remote exams, new guidelines said, students are now “expected to log out of Canvas on all devices prior to testing.”
Mr. Zhang, the first-year student, said the investigation had shaken his faith in an institution he loves. He had decided to become a doctor, he said, to address disparities in health care access after he won a fellowship as a Dartmouth undergraduate to study medicine in Tanzania.
Mr. Zhang said he felt compelled to speak publicly to help reform a process he found traumatizing.
“I’m terrified,” he said. “But if me speaking up means that there’s at least one student in the future who doesn’t have to feel the way that I did, then it’s all worthwhile.”
In the Great Recession more than a decade ago, big tech companies hit a rough patch just like everyone else. Now they have become unquestioned winners of the pandemic economy.
The combined yearly revenue of Amazon, Apple, Alphabet, Microsoft and Facebook is about $1.2 trillion, according to earnings reported this week, more than 25 percent higher than the figure just as the pandemic started to bite in 2020. In less than a week, those five giants make more in sales than McDonald’s does in a year.
The U.S. economy is cranking back from 2020, when it contracted for the first time since the financial crisis. But for the tech giants, the pandemic hit was barely a blip. It’s a fantastic time to be a titan of U.S. technology — as long as you ignore the screaming politicians, the daily headlines about killing free speech or dodging taxes, the gripes from competitors and workers, and the too-many-to-count legal investigations and lawsuits.
America’s technology superpowers aren’t making bonkers dollars in spite of the deadly coronavirus and its ripple effects through the global economy. They have grown even stronger because of the pandemic. It’s both logical and slightly nuts.
have more money in their pockets thanks to government stimulus checks and pandemic savings, and the tech giants are getting a significant share. Their combined revenue is equivalent to roughly 5 percent of the gross domestic product of the United States.
Big Tech’s pandemic big bucks have an understandable root cause: We needed its services.
People gravitated to Facebook’s apps to stay in touch and entertained, and businesses wanted to pay Facebook and Google, which Alphabet owns, to help them find customers who were stuck at home. People preferred to buy diapers and deck chairs from Amazon rather than risk their health shopping in stores. Companies loaded up on software from Microsoft as their businesses and work forces went virtual. Apple’s laptops and iPads become lifelines for office workers and schoolchildren.
Before the pandemic, America’s technology superpowers were already influential in how we communicated, worked, stayed entertained and shopped. Now they are practically unavoidable. Investors have scooped up Big Tech shares in a bet that these companies are nearly invincible.
“They were already on the way up and had been for the best part of a decade, and the pandemic was unique,” said Thomas Philippon, a professor of finance at New York University. “For them it was a perfect positive storm.”
Sales in the first quarter rose 44 percent from a year earlier, and Amazon’s profits before taxes — which have never been exactly robust — more than doubled to $8.9 billion. Businesses are addicted to Amazon’s cloud computer services, where sales rose 32 percent, and shoppers can’t live without Amazon’s delivery. Investors love Amazon, too. The company’s stock market value has nearly doubled since the beginning of 2020 to $1.8 trillion.
For the other tech giants, it’s as if their brief pandemic nosedive never happened. Advertising sales typically rise and fall with the economy. But as other types of ad spending shrank when the U.S. economy contracted last year, ad sales rose for Google and Facebook. The growth was even better for them in the first three months of this year.
A year ago, analysts worried that Apple would be crippled as the pandemic gripped China, which is the hub of the company’s manufacturing operations and its most important consumer market. The fears didn’t last long. In the first three months of 2021, Apple’s revenue from selling iPhones increased at the fastest rate since 2012. Sales in mainland China, Taiwan and Hong Kong nearly doubled from a year earlier.
been on a tear. So have some younger technology companies, such as Snap and Zoom, the maker of the pandemic-favorite videoconferencing app. The crisis forced all sorts of businesses to go digital fast in ways that could help them thrive. Restaurants invested in online sales and delivery, and doctors went full bore into telemedicine.
But the dictionary doesn’t have enough superlatives to describe what’s happening to the five biggest technology companies. It’s all a bit awkward, really. It’s rocket fuel for critics, including some regulators and lawmakers in Europe and the United States, who say the tech giants crowd out newcomers and leave everyone worse off.
peculiarities of the pandemic economy. Some people and sectors are doing awesome, while other families are lining up at food banks and while companies like airlines are begging for cash. Unlike the stock market clobbering in the Great Recession, stock indexes in the United States have reached new highs.
The tech superstars have also capitalized on this moment. Alphabet and Facebook have used the pandemic to cut back in places that matter less, such as promotional costs and travel and entertainment budgets. And the tech giants have generally increased spending in areas that extend their advantages.
Alphabet is now spending more on big-ticket projects, like building computer complexes, than Exxon Mobil spends to dig oil and gas out of the ground. Amazon’s work force has expanded by more than 470,000 people since the end of 2019. That deepens the moat separating the tech superstars from everyone else.
Big Tech is emerging from the pandemic lean, mean and ready for a U.S. economy expected to roar back to life in 2021. Meanwhile, there are still long lines at food banks. Some American workers who lost their jobs last year may never get them back. Housing advocates are worried that millions of people will be evicted from their homes. And being Big Tech is an invitation for everyone to hate you — but you do have towering piles of money.
Facebook said on Wednesday that revenue rose 48 percent to $26.2 billion in the first three months of the year, while profits nearly doubled to $9.5 billion, underlining how the social network has continued to benefit during the pandemic.
Advertising revenue, which makes up the bulk of Facebook’s income, rose 46 percent to $25.4 billion. Nearly 3.5 billion people now use one of Facebook’s apps every month, up 15 percent from a year earlier.
The results followed a blockbuster financial performance in 2020, as the pandemic pushed people indoors toward their computers and other devices — and onto the social network and its associated apps like Instagram, WhatsApp and Messenger — in ever-increasing numbers. Facebook recorded highs in users and revenues and its services were in such demand that engineers at times struggled to “keep the lights on.”
Yet Wall Street is now expected to scrutinize Facebook’s advertising business closely. On Monday, Apple rolled out an update of its mobile software with a new feature that asks people if they wish to opt out of being tracked by advertisers outside of apps like Facebook. If people choose not to be tracked, that could hurt Facebook’s business, which relies on user data to target advertising.
Facebook cut off Mr. Trump from the platform after the riot, though a final decision about whether to keep him off the site indefinitely has not been made.