Adapted with authorization of José Manuel Fernandes, director of Observador. You can read the original version in Portuguese here.
I bill, therefore I am.
How much of what is fundamental in our lives as ‘consumers’ is in the hands of companies?
In the 60s of the twentieth century a German pharmaceutical company put on the market a medicine indicated for sleeping and for morning sickness of pregnant women. The drug had defects, that were hidden during tests done on concentration camp prisoners in World War II, who died, but these ‘effects’ were not reported and a few decades later, the drug quietly entered the market. As many as 10 000 children were born without arms and legs.
In 2006, Judge Gladys Kessler ruled in a landmark 1700-page ruling sentencing Phillipp Morris for fraudulent practices over 50 years, which included the invention of a genetically modified tobacco to induce higher levels of addiction. In a particularly eloquent passage, the sentence concludes: “the industry is behind the smoking epidemic [in the U.S.] and acts together and in coordination to mislead public opinion, government, the health community, and consumers.”
The film Erin Brockovich tells the story of the tragic deaths caused by cancers owing to the dumping of 1400 million liters of chromium water waste by the Pacific Gas and Electric Company, affecting the population of the California village of Hinkley. The company knew what it was doing. But did not bother to refrain from continuing it. It was because of a class-action, and thanks to the perseverance of a single mother of three, Erin Brockovich, who inspired the film of the same name, that the injured people were compensated.
Cambridge Analytica, through processing of personal data, psychological profiling, knowledge of the propensities, desires, and fears of hundreds of thousands of people – data that was sold to it by Facebook – disseminated video content that was intentionally created to influence social movements, voting decisions, incite racial hatred, extremism, and divisionism.
Such video and text contents are thoughtfully designed by teams of creatives directed by the scientists of behavioral sciences to achieve specific goals of manipulation the behavior of millions and millions of people, which is made possible by the individualized and nominative detailed psychometric knowledge of the population of various countries or geographies extracted from the data they deliver when using the Internet, are notably the social networks.
Amongst Cambridge Analytica’s clients, one finds the pro-Brexit campaign in the UK; in the US, the Trump’s first term campaign, when he defeated Hillary Clinton, thrashing her on social networks and media with a whole plethora of accusations and mockery.
Facebook’s market capitalization is now $679 billion. How much of this value has not been generated by illegally harming the right to information, the right to construe the personality, through the misappropriation and abuse of personal data and private and intimate life, or by manipulating political and religious convictions, exploiting sexual orientation or gender identity?
Should some of that amount not be returned in the form of compensation? And shouldn’t algorithms be cleansed, corrected, and re-trained and excessive data eliminated?
Since the outbreak of social media, of which Tik Tok is the champion in screen time, the rate of suicide, self-harm and anorexia among young preteens and teens has increased exponentially, at least according to published data on the US.
Companies that engage in price collusion and limit the free play of competition for decades on end and lead to artificial price increases can affect access to futile and superfluous products or services, but they can also affect access to essential goods, harming the quality of life of many families.
When parliaments of nations pass laws, they do so for a purpose. The economy, scientific-medical innovation, free private enterprise, the pursuit of profit, political combativeness, freedom of expression, these are all fundamental values of a prosperous community.
But without the right incentives, these important values are perverted. History and the present are rich in examples.
What would have been different if it weren’t for …
Brexit. Would the UK still be in the EU if Mark Zuckerberg hadn’t sold his customers’ data to Cambridge Analytica? How many ‘persuasives’ (company jargon) were put in an information bubble and changed the course of every Englishman’s life? Will Mark flaunt this as one of his glories at the end of his life, when he tells his children which life accomplishments he is proud of?
The Myanmar massacre. Meta’s internal documents documented that it was acknowledged that tools from Facebook’s internal artificial intelligence system, such as viralization, recommendations, or optimization for engagement, have promoted the spread of racist hate speech in Myanmar. Who will answer for the millions of lives slaughtered? Myanmar’s GDP was $65 billion in 2021, or one-tenth of Facebook’s market capitalization.
How much was it worth distributing these contents in the feed of Myanmar people that worked as warfare weapons in the coup that brutally murdered 6,337 and wounded 2,614 civilians in Myanmar in just 20 months, between February 2021 and September 30, 2022? If one compensated each of the 8,951 lives in a million dollars, an amount that many would find exorbitant, we would still be merely pinching 1.3% of Facebook’s market capitalization.
I bill, therefore I am.
Violating laws that protect consumers, voters, data owners, etc., has harmful practical consequences on people’s lives and civil liability for damage caused to the lives of these people is an incentive to prevent the injury of values.
Unlawful conduct may trigger administrative or criminal liability. Regulators play their part by imposing fines on companies. But these amounts never reach people, not least because they are State revenue. Without consumer redress, unlawful conduct pays off.
One of the collective actions pending in Portugal for violation of competition law, runs against Super Bock, which has been successively condemned by the Portuguese Competition Authority: it was in fined in 1985, in 2000 and in 2019. In the latter case, a fine of 24 million euros was applied for practices carried out over eleven years, between 2006 and 2017.
Following that decision, a class action was filed in the competition court of Santarém, (which, by the way, is susceptible of consultation by anyone), in which it is estimated that Superbock has obtained revenues 11% above the competitive market level over 11 years, in a total amount of EUR 196.61 million.
One eleventh thereof amounts to EUR 18 million (nominal; real value calculations apart); minus one eleventh of the fine, or circa EUR 2 million; the company’s yielded net return on the infringement of EUR 16 million per year, times 11.
The mantra of shareholder remuneration, which presides to the functioning of free and competitive markets, if not restrained by private enforcementand consumer redress, leaves wrongdoing rewarding, or, paraphrasing Descartes, I bill, therefore I am.
If Superbock is forced to transferback to the market the wealth it has misappropriated, it will lose the incentive to violate the rules of free competition. Liability for damages caused to consumers is thus, not only of elementary justice, but a precious auxiliar to policing business activity.
In a highly technical society of mass consumption, the consumer is a tiny drop of water in an ocean, and the asymmetry of information and resources between big corporations and the injured individuals is overwhelmingly disproportionate.
Collective redress actions are then the instrument par excellence to correct the markets, to foster a healthy social fabric where individuals can flourish taking on their life projects and satisfying their consumption needs in prosperous, but ethical markets.
A developed society must preserve the civic actors whose mission and calling are to fight for the protection of the rights and interests of consumers, for the application of the law, for the preservation of the environment and the life quality in the cities, the respect of human rights, democratic legality, for the true freedom of the press, for the right to inform and to beinformed.
A wise business leader values the system that holds the company he or she leads accountable for perverting the values the society wants to protect through the Law of the Land.
In this context, Antonio Damasio’s error of Descartes will be to the Cartesian-wise ‘I think, therefore I am’, as redress class actions will be to a ‘I bill, therefore I am’, metaphorically speaking.