Former Facebook Exec: Tech Companies ‘Surveillance States’ that ‘Invite Regulation’

A former Facebook executive has stated that tech companies such as Google and Facebook have become “surveillance states” and are “inviting government regulation.”

CNBC reports that Chamath Palihapitiya, former Facebook executive and current CEO of Social Capital Hedosophia Holdings, has stated that he believes e-commerce giant Amazon to be a better investment than tech companies Google and Facebook. Palihapitiya believes that Facebook and Google are more vulnerable to regulatory risks due to the high number of retailers that compete with Amazon.

“Amazon is a microscopic portion of global consumption today, so ultimately I think it has more room to grow before it invites regulatory overview,” Palihapitiya said. “On the other hand, Facebook and Google effectively are surveillance states. And they have so much personal, private information about so many citizens of so many countries.” Companies like Google and Facebook are, however, already under threat of regulation with Google being fined a record $2.7 billion by the EU.

“It’s already beginning because it’s part and parcel to them realizing that there’s too much power unbounded,” said Palihapitiya. He went on to say that while tech companies’ soaring stock prices may be inviting to some investors, he believes that companies like Amazon are more likely to win out in the long run as they’re competing against outdated competitors such as Wal-Mart. Although Wal-Mart has taken steps to move into the digital age with the purchase of companies like Jet.com and Bonobos, Amazon outstrips the competition with their products like Alexa, Kindle and Amazon cloud storage.

“It is competing against fundamentally impaired companies, including Wal-Mart, quite honestly,” Palihapitiya said. “That don’t have the technical savvy; they don’t have the capabilities, specialty retailers, an entire overhang of cost structure that [Amazon doesn’t] have to deal with.”

Facebook, Google, and Wal-Mart did not respond to requests for comment from CNBC.