Large technology companies have been warned by business leaders that they will experience the same loss in trust and reputation that banks have faced in recent years, unless they change their policy approach.
The FT reports the warning, which was issued at the Davos economic forum, was directed at the heads of technology companies including the Silicon Valley tech giants, who were told to recognise that self-regulation, will not be enough to reduce increasing public concerns around privacy and other issues.
According to the FT, Paul Achleitner (chairman of the supervisory board of Deutsche Bank) said: “Self-regulation, no matter what you do, is just not going to be good enough for tech companies.” Achleitner also said that such an approach had previously been employed by banks but had failed due to political backlash concerning their over-reach.
In Europe, opposition is reportedly growing towards the dominance of US tech giants Google and Facebook which has been fuelled by concerns over corporate tax avoidance and US internet surveillance.
Last month the European Parliament backed a motion calling on regulators to consider breaking up Google and the European Commission has reopened an antitrust probe into the company. Google, however, isn’t the only company that has faced opposition, across Europe, taxi app company Uber, has also faced opposition towards its policies.
“Never assume that because something has been common practice in the past it will not be judged harshly in the future,” said Achleitner. He also argued that tech leaders could be just as shocked by a shift in attitudes in the “technology revolution” as bankers were by the quick shift in political attitudes during the financial revolution.
According to Fadi Chehade (president of the Internet Corporation for Assigned Names and Numbers) the collapse of the trust in technology companies could be just as big as it had been for banks and he believes tech leaders have been too complacent about reputational risks.
The comments come as public attitudes towards the safety of technology and trust in tech companies have started to dip, in comparison to recent year’s when the levels of trust in technology companies has been high. Research from Eldelman’s Trust Barometer survey for 2015 shows that trust has fallen in the technology sector and in particular 49 per cent of British consumers believe that innovation within businesses is happening too quickly and businesses are failing to reassure them that new innovations are safe to use.
By Nicole Miskelly, bobsguide Lead Journalist