We return for a final time to the controversial interview with Eric Schmidt.

The highlight of this talk occurred when Schmidt suggested a hypothetical strategy for a new startup. “Make me a copy of TikTok, steal all the users, steal all the music, put my preferences in it, produce this program in the next 30 seconds, release it, and in one hour, if it’s not viral, do something different along the same lines.” He then added: “If it took off, then you’d hire a whole bunch of lawyers to clean the mess up. If nobody uses your product, it doesn’t matter that you stole all the content.”

ChatGPT clearly disapproved of Schmidt’s cynicism: “The idea that legal issues can be ‘cleaned up’ after a product takes off is also troubling from a rule-of-law perspective.”

It’s good to know that an AI brain adheres to the idea of a “rule of law.” The barons of Silicon Valley, very much like the US State Department, also pay lip service to this noble idea, but, as ambitious human beings, have no qualms about violating its principles when it serves their purpose. The difference between Schmidt and the State Department is that when the latter acts, it is spared the expense of hiring an army of lawyers, since Washington recognizes no tribunal with the power to apply the rule of law.

At this point of the discussion, I followed up with a new prompt:

“We can agree about the rule-of-law perspective and the need for checks and balances in government, but this is about a mindset, a business culture that thrives on the reality of faits accomplis. Is regulation an effective form of ‘checks and balance’ when it comes to devising a strategy to dominate a marketplace. The historical answer has to be ‘no.’ Schmidt is right. You establish your position, glean the rewards and then you defend it with an army of lawyers. That is how the business culture works today. That is how it is built to work. Regulation will change nothing. So what do you suggest?”

“You raise a compelling point about the limitations of regulation in curbing the aggressive, ‘faits accomplis’ business culture that has come to define much of Silicon Valley and the tech industry at large. Regulation, as it currently functions, often lags behind the rapid innovation cycles of tech companies. By the time laws are enacted, dominant players have already entrenched their market position, reaped enormous profits, and created a legal defense system strong enough to fend off most challenges.

Given this reality, here are a few alternative or complementary strategies to regulation that could address the challenges posed by this business culture:

1. **Antitrust and Market Restructuring**

Rather than relying solely on regulation, governments could enforce stricter antitrust measures to prevent monopolistic practices and break up companies that hold disproportionate power in the marketplace. For example, tech giants that dominate entire sectors—such as Google in search, Amazon in e-commerce, and Facebook in social media—could be required to divest parts of their businesses to ensure a more competitive environment.

Antitrust enforcement would not only limit market dominance but also change the incentives for new companies. If monopolistic practices no longer guarantee market leadership, companies may shift toward more ethical and sustainable strategies, rather than the current ‘dominate first, clean up later’ approach.

2. **Decentralization and Open Standards**

One way to counter monopolistic behavior is to promote decentralization through open standards and protocols. In sectors like social media or data platforms, governments could encourage or mandate the adoption of open-source protocols that allow users to move freely between services without losing their networks, data, or content.

For example, instead of being locked into one platform like Facebook, users could have the ability to port their data, contacts, and digital assets across multiple services that follow common standards. This would reduce the incentive for companies to prioritize market domination and could foster a healthier, more competitive ecosystem.

3. **Public Oversight and Algorithmic Transparency**

Given the central role algorithms play in shaping user behavior, content distribution, and even public opinion, governments or independent bodies could require greater transparency around how these algorithms function. Mandating regular audits of tech companies’ algorithms to ensure they are not unfairly amplifying harmful content, violating privacy rights, or engaging in anticompetitive behavior could offer a form of oversight.

However, transparency must go hand in hand with enforceable consequences. Regulatory bodies could impose significant fines or penalties if algorithms are found to undermine democratic processes or perpetuate harm.

4. **Corporate Responsibility and Ethical Frameworks**

While not a replacement for regulation, fostering a shift in corporate responsibility could play an important role. Companies could be incentivized to adopt ethical standards through a combination of public pressure, investor activism, and internal reforms. For instance, many companies today are responding to the growing importance of ESG (Environmental, Social, and Governance) metrics, as investors, consumers, and employees demand more ethical behavior.

Governments and civil society could push for frameworks that reward companies for acting ethically—such as preferential treatment in government contracts, favorable tax policies, or public recognition for responsible business practices.

5. **Empowering Consumers and Employees**

Consumers and employees also play a critical role in shaping corporate behavior. Increasingly, workers in Silicon Valley are becoming more vocal about their company’s ethics and practices, and consumer boycotts or campaigns have demonstrated the power to push companies to act more responsibly. For example, internal employee protests at companies like Google, Amazon, and Facebook have had tangible impacts on corporate policy.

Strengthening whistleblower protections, fostering employee organizing, and creating platforms for consumer advocacy could act as a counterbalance to corporate dominance by holding companies more accountable to their own stakeholders.

6. **Global Collaboration on Regulation**

Since the internet and digital platforms operate globally, regulation needs to be a coordinated international effort. A fragmented approach, where one country tries to enforce rules on its own, won’t be effective against companies that operate across borders. Governments could work together to create a shared regulatory framework for the digital economy, ensuring that companies can’t simply move to a more lenient jurisdiction to escape oversight.

For instance, the European Union’s GDPR (General Data Protection Regulation) has set a global benchmark for data privacy, and many companies now comply with it even if they aren’t based in Europe. A similar approach could be applied to other areas like antitrust or algorithmic transparency, forcing global tech companies to adopt more ethical practices.

7. **Public Alternatives and Cooperative Models**

Another way to counter the dominance of private tech companies is by developing publicly funded or cooperative alternatives in key sectors. For instance, a publicly funded social media platform or search engine that prioritizes user privacy, transparency, and accountability over profit could provide a viable alternative to monopolistic platforms. Similarly, cooperative models where users collectively own and control digital services could foster a more democratic tech ecosystem.

These alternatives wouldn’t necessarily replace private companies but would provide competition that could drive the industry in a more ethical direction, much like how public broadcasting operates alongside commercial media.

Conclusion:

While regulation is necessary, it is often insufficient by itself to tackle the aggressive business culture of Silicon Valley. A combination of antitrust enforcement, decentralization, public oversight, corporate responsibility, consumer empowerment, and global cooperation could provide more effective checks and balances. Changing the incentives that drive companies toward monopolistic practices will require more creative and systemic solutions beyond traditional regulation.”

I invite our readers to appreciate the paradox of an AI brain that begins by proposing an “alternative or complementary strategies to regulation” and then exposes a plan for what some would describe as pervasive, if not invasive regulation.

I distance myself from those critics. I find these suggestions eminently reasonable and potentially effective. But I can’t help noting that, in every case, ChatGPT evokes a possibility, not a reality. We “could” do these things. The chatbot offers no insight into why it is beyond unlikely that any of these initiatives will ever be proposed, let alone adopted. It ignores the political, economic and ideological conditions that would permit transforming “could” into “will.” It correctly suggests that no single action is sufficient and insists that success depends on a “combination” of all these initiatives. But we never leave the speculative land of “could.”

It recommends “creative and systemic solutions beyond traditional regulation.” Why not? Followed to its logical conclusion, this would imply a cultural revolution that calls into question the underlying values that govern the way things are done today in society, the economy and politics. We can always hope.

On the other hand, I’d hate to speculate about the odds Las Vegas might give on any of that actually taking place.

Our conclusion of this four-part exploration of Eric Schmidt’s words of wisdom

My last admittedly sarcastic remark highlights a significant historical fact worth pondering. Four places in the United States have contributed massively to a mindset that ChatGPT acknowledges is crying for a revolution: Wall Street, Washington DC, Silicon Valley and Las Vegas. Anyone wishing to understand US economic and political culture today needs to have a close look at all four and how they combine to define the world we live in.

Please share your thoughts on all this at dialogue@fairobserver.com.

*[Artificial Intelligence is rapidly becoming a feature of everyone’s daily life. We unconsciously perceive it either as a friend or foe, a helper or destroyer. At Fair Observer, we see it as a tool of creativity, capable of revealing the complex relationship between humans and machines.]

[Lee Thompson-Kolar edited this piece.]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.