Silicon Valley tech giants can’t be trusted to police themselves and should be subject to tougher regulation, including around their pattern of acquiring competitors to accumulate ever-larger stores of user data, according to a critical new report released Monday.
The business models powering digital advertising platforms like Facebook Inc. and Alphabet Inc.’s Google still undermine user privacy and incentivize disinformation campaigns despite recent efforts by tech companies to prevent abuse, says the report from Harvard’s Shorenstein Center on Media, Politics and Public Policy and New America, a left-leaning Washington-based think tank.
“We need to completely reorganize the way that industry works,” said Dipayan Ghosh, who previously worked on privacy and policy issues at Facebook and is now a fellow at the Shorenstein Center.
The report lands amid a broad discussion in the industry and in Washington, D.C., about how aggressively lawmakers should move on Silicon Valley’s biggest firms, and comes just days before the Senate Commerce Committee is due to hold a high-profile hearing on the privacy practices of several large tech companies. Google, Amazon.com Inc., Twitter Inc. and Apple Inc. will all send privacy executives to testify at the Senate hearing, along with telecommunications firms AT&T Inc. and Charter Communications Inc. A Facebook representative isn’t scheduled to attend.
The authors argue that the federal government should take the lead on regulations rather than states like California, which recently passed a tough new privacy law that the industry broadly opposes. Most big tech companies have said they are open to sensible regulation as long as it doesn’t overly curtail their ability to offer personalized products and services to consumers.
Mr. Ghosh and his co-author, Ben Scott, a director of policy and advocacy at the Omidyar Network, argue that protecting user data will require a combination of stronger privacy laws and limits on how much data the tech companies can gobble up. They add that tech companies also need to provide additional disclosure about how their information is used to serve them ads, far beyond what is currently shared.
Over the course of the year, the tech companies have announced changes to their privacy practices and have tried to take steps to shore up user trust. But those changes don’t go far enough to address the deeper problems of the platforms, which are still reliant on maintaining user attention, according to Messrs. Ghosh and Scott, who wrote a separate report in January critical of the big tech companies.
“I think we both felt at the beginning of the year, there was potential to talk to the industry,” said Mr. Ghosh, who previously served as a White House technology adviser under President Barack Obama. “We are increasingly disillusioned now.”
Among the specific recommendations is for tougher restrictions on tech-related mergers and acquisitions, particularly on those that allow the biggest companies to add to their vast stores of data about consumers. “If data is a source of primary value in the modern economy, then it should be a significant focus of merger review,” the authors write.
They also call for more aggressive third-party auditing of algorithms underpinning these systems.
Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com