Massive Dilemma In Taking Action

As famously put by Peter Parker in Spiderman, "With great power comes great responsibility".  The digital giants are walking a thin-gauged tight rope.  On one hand, they feel compelled to assist Ukraine. On the other hand, they face potential loss of future business, retaliation in fines, arrests, or service shut downs by the Russian government. In fact, Russia has passed laws to put western tech companies under their jurisdiction. 

However, not taking action or holding a position of neutrality could be seen as not standing up for western values.  Digital giants and big tech companies that take no action could face a barrage of cancel culture actions from customers, shareholders, and partners.  This show of support and compliance with an authoritative government would negatively impact their brand.

In general, the tech companies have not faced US sanctions to take action.  As private companies, they have independently chosen to stand up to Putin with hopes that they will not shut down access to services in Ukraine and Russia. 

Actions Taken To Date Balance Restricting Propaganda While Keeping Services Open

Social networks are being used by dissidents to organize and push back against Putin's forces.  Given Ukraine's tech work force, the ties to western countries are strong and come from their decades of product engineering expertise, outsourced engineering capabilities, and strong engineering and math talent.  In general, tech companies are aiding Ukraine by blocking Russian state-run media sites such as Sputnik and RT.  Furthermore, tech companies are monitoring for cyber attacks.  Consequently, Russia sees these tech giants as actors in conflict by restricting sales, ads, and information flow.  Here's what the digital giants have done to date (see Figure 1):

Figure 1. Big Tech Actions In Russian-Ukraine War

• AirBnB - offered free housing to Ukrainians fleeing
• Apple – ceased sales of products in Russia, Apple Pay limited. Traffic and live incidents on Apple Maps halted. RT and Sputnik apps taken off the AppStore
• Facebook – tagged Russian Governments, restricting Russia’s RT and Sputnik In Europe
• Google – blocked YouTube channels and RT and Sputnik, disabled traffic conditions on Maps, taking action against hacking and influence operations providing protection to 100 Ukrainian websites.  Services still available in Russia.
• Microsoft – limited downloads of Russian state media services focusing on hacking threats, deranking RT and Sputnik on search results.
• Netflix – not adding 20 government controlled stations to streaming service yet.
• Snap – stopped all advertising in Russia Ukraine and Belarus. Halting ad sales in Russia and Belarus
• Space X-  activated Star Link for Ukrainians
• Twitter – banned RT and Sputni ads, monitoring for deep fakes
• US Phone carriers - waived fees to customers who are calling Ukraine

Binance and Coinbase have taken a neutral stance of not unilaterally freezing funds as those actions would be contrary to the decentralization movement and blockchain principles.  Meanwhile institutions such as MIT have servered ties with a Russian Research university.

The Bottom Line: Powerful Tech Companies Have Chosen Sides

The balance between keeping services open and restricting misinformation places the big tech companies in the cross hairs of the Putin regime.  These public companies have taken a side with their western governments instead of remaining neutral.  In this case, the actions align well with democratic values and the support of a country under attack.  However, the actions of these companies and organizations should remind the general public the awesome power of big tech and how this concentration of power can be abused without proper checks and balances.

Your POV

What actions do you think big tech companies should take with Ukraine? Do you worry about the huge concentration of power in a few hands?  How do you see the scenario playing out?

Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org. Please let us know if you need help with your strategy efforts. Here’s how we can assist:

• Developing your metaverse and digital business strategy
• Connecting with other pioneers
• Sharing best practices
• Vendor selection
• Implementation partner selection
• Providing contract negotiations and software licensing support
• Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales.

Disclosures

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy,stay tuned for the full client list on the Constellation Research website. * Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Constellation Research recommends that readers consult a stock professional for their investment guidance. Investors should understand the potential conflicts of interest analysts might face. Constellation does not underwrite or own the securities of the companies the analysts cover. Analysts themselves sometimes own stocks in the companies they cover—either directly or indirectly, such as through employee stock-purchase pools in which they and their colleagues participate. As a general matter, investors should not rely solely on an analyst’s recommendation when deciding whether to buy, hold, or sell a stock. Instead, they should also do their own research—such as reading the prospectus for new companies or for public companies, the quarterly and annual reports filed with the SEC—to confirm whether a particular investment is appropriate for them in light of their individual financial circumstances.

Copyright © 2001 – 2022 R Wang and Insider Associates, LLC All rights reserved.

Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network