Venture capitalist Alan Patricof calls Facebook and Google addictive, 'virtual monopolies'

  • The power of Facebook and Google needs to be examined by regulators, says Greycroft co-founder Alan Patricof.
  • “Facebook is addictive today. Google is addictive. They’re virtual monopolies,” he says.
  • Facebook and Google are facing allegations that their platforms are purposely designed to make users dependent.

The incredible influence that Facebook and Google have in society needs to be examined by regulators, said Alan Patricof, co-founder of the venerable Greycroft venture capital firm.

“There’s an outcry clearly,” Patricof told CNBC’s “Squawk Box.” It’s worth exploring “what they’re crowding out” in terms of would-be competitors, he added.

“Facebook is addictive today. Google is addictive. They’re virtual monopolies. I think people are becoming very sensitive of that,” said Patricof, who’s been a venture capitalist for four decades. “While they’re tech companies and they are part of the commercial system, they are difficult to wean off of.”

Patricof is certainly not alone in criticizing Facebook and Google. Salesforce CEO Marc Benioff recently told CNBC they should be regulated like tobacco companies that also produce addictive products. Former Google design ethicist Tristan Harris and former Facebook investor and adviser Roger McNamee started a new group to fight what they call the “existential threat” of tech addiction.

To be fair, Patricof said, Facebook has been responsive to the backlash over the addictive nature of the platform and the ease of which it was exploited by the Russians in the 2016 presidential election. He did not mention how he feels about any remedies for Alphabet-owned Google.

In explaining a decline in daily active users in the U.S. and Canada in the fourth quarter, Facebook said it made changes, including a crackdown on viral videos, which reduced the amount of time users spent on the social network by 50 million hours a day in the quarter, or 5 percent.

Facebook has also pledged to double its 10,000-person safety and security staff by the end of 2018 to try to avoid a repeat of any bad actors using the platform to influence elections.

“I don’t think they’re deliberately pushing the news in one direction … or the other,” Patricof said. “It’s a natural phenomenon that when you got literally billions of … people on this every day. It’s tough no matter how good your technology is to police every single comment coming up.”

“I think CSR, corporate social responsibility, is something that is becoming front and center. And I think the gun issue has brought that up,” he said. “I think we’re going to see companies becoming much more responsive to their public.”

Greycroft, with offices in New York and Los Angeles, invests from two funds with a total of $559 million. It also has more than $1 billion in assets under management. Some of the companies that Greycroft has backed include news organizations Axios and the Huffington Post, consumer bulk product shipper Boxed and cook-at-home service Plated.

Source: Read Full Article

Leave a Reply