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Zillow co-founder Rich Barton and Microsoft board member John Stanton discuss tech and politics at the Alliance of Angels 20th anniversary gala. (GeekWire Photo / John Cook)

Big tech companies have ascended to a position of extraordinary power by finding creative ways to sell customer data, moving at a breakneck pace and developing new innovations that changed lives. But the repercussions of that meteoric rise are starting to play out, with Facebook’s Cambridge Analytica controversy as the latest linchpin.

West Coast tech giants are getting raked over the coals routinely these days, adding to a growing sentiment of distrust from the media, the general population and politicians (See today’s story: Amazon stock sinks again as Trump tweets that tech giant pays ‘little or no taxes’ and uses postal service as ‘their delivery boy’).

Telecom giants face backlash for pressuring the federal government to rollback net neutrality protections. Facebook, Twitter, and Google are under scrutiny for facilitating Russian meddling in U.S. elections. Uber is getting hammered over a self-driving car’s role in killing a pedestrian in Arizona.

To some degree, the tech industry is getting a little comeuppance.

“I think we’ve behaved in quite an entitled and arrogant manner for quite some time,” said Expedia and Zillow Group co-founder Rich Barton, speaking alongside wireless pioneer and Microsoft board member John Stanton Wednesday night at The Alliance of Angels 20th anniversary gala in Seattle.

The recent controversies may seem inextricably tied to Donald Trump’s presidency, but as two of the Seattle region’s most respected tech executives see it, the industry’s reckoning has been looming longer than that.

“This tech backlash was brewing long before Trump,” said Barton, who also sits on the board of Netflix. “It was well on the way and we have to take it seriously and not dig in our heels and realize that we are not the future economy. We are now the economy.”

Rich Barton. (GeekWire Photo / John Cook)

Stanton echoed Barton’s remarks, saying that while “it’s easy to write it off as the Trump administration” the backlash is bigger than one administration or company. In Seattle, the tech backlash is playing out through the politics of socialist city councilmember Kshama Sawant who is pushing a proposal to tax Amazon and other big companies in order to boost affordable housing in the city.

During their wide-ranging discussion Wednesday night, Stanton and Barton agreed that the best antidote for public distrust is to engage with politicians around critical issues. They said that tech should have a seat at the table when decisions about regulation and privacy are made so that policymakers have a clear understanding of what’s at stake.

“Engagement means you’re a part of the conversation before there is an overreaction on tariffs; before there is an overreaction in terms of certain taxation and I think we need to have that responsibility,” said Stanton, the owner of the Seattle Mariners who was once discussed as a possible gubernatorial candidate in Washington state. “But the ‘we’ is everyone in this room.”

Continue reading for the edited transcript of Stanton and Barton’s conversation on tech and politics, including some interesting remarks from the technology pioneers about data privacy and regulation.

John Stanton: The political backlash against the tech community that we’re seeing — and it’s easy to write it off as the Trump administration — but if you look more broadly at surveys, there are a lot of folks that are anxious. The FANG companies, Netflix being one of those. Microsoft having been attacked at various points in time. Where do you see this going and what should the people in this room be thinking about in terms of how technology relates to broader society over the next few years?

Rich Barton: Well, I think we’ve behaved in quite an entitled and arrogant manner for quite some time, John. I think we have, earned or not, held a position of kind of this up on a pedestal, beautification a little bit. The tech entrepreneur. We got benefits and still do from a taxation perspective and it’s completely natural to me that after years of being fairly cavalier in attitude about that that it’s coming back around. This tech backlash was brewing long before Trump. It was well on the way and we have to take it seriously and not dig in our heels and realize that we are not the future economy. We are now the economy and we have to behave as such. I think we’re learning some hard lessons there and I think they’re going to get harder before things stabilize.

Stanton: One of the conversations we’ve had at Microsoft has been the broader understanding, with respect to changes. Trump railed against the number of jobs that were eliminated by being moved offshore. The fact is that over the last decade, 80 percent of the jobs lost in red states had something to do with technology. There have also been a tremendous number of jobs created, obviously, but there have been so many people that have been left behind, particularly, frankly, folks … our age, 50 to, I’m 62, that lost their jobs but still need another job and need to find a way. I think that the broader tech community responsibility is both to engage politically … being willing, as you were an ambassador on innovation for the Obama administration, makes a difference. And those kinds of things that involve engagement means you’re a part of the conversation before there is an overreaction on tariffs; before there is an overreaction in terms of certain taxation and I think we need to have that responsibility but the “we” is everyone in this room.

Barton: …I completely agree. If there’s any region of the country in technology that ought to have learned this lesson it is … here in Seattle back in the late 1990s. It can happen and there are times when it deserves to happen. In fact, there was an interesting speculation today that our president, who seems to hold personal grudges has, Amazon and Jeff Bezos in his crosshairs. That’s a scary prospect and we’re seeing it play out in this AT&T Time Warner thing because he’s got a grudge against CNN. I don’t know if you believe that’s what’s going on.

Stanton: I think it’s a factor. I think that the FCC operates somewhat independently. Frankly, I think that the issues on technology have more to do with content but it’s inescapable to watch CNN criticize Trump and then the government go after a transaction that economically is hard to complain about using the traditional HHI rules and the like and the explanatory variable becomes politics.

Barton: So we’ve got to pay attention and we’ve got to be more responsible. I think we’re on the right path, but an arrogant reaction is not what’s called for. A haughty reaction is not what’s called for. An over intellectualized reaction is not good. We have to realize we’re part of the broader community and broader economy and we’ve gotta behave.

Stanton: I think that most of the business models that we’ve looked at over the last few years have involved data. Certainly, all of the businesses that you’ve been involved in collect data. Certainly Microsoft, Amazon do. Facebook’s taking a turn in the barrel right now as a result of some of their policies. As leading companies that have accumulated a great deal of data, how do you think about that in terms of balancing privacy versus creating a better world?

Barton: This is not a new issue … people like free stuff. They are willing to trade their personal information for free stuff. That is pretty much 100 percent been the case in my career observation and I believe that is the case right now too. That does not mean we, as a society, ought not to look at, from a regulatory perspective, being a little bit paternalistic about what should constitute fair use of people’s personal information. So for instance, with medical insurance and medical histories, maybe not giving insurance to somebody who appears to have a genetic marker for a cancer or what have you. That’s just an obvious example. I think we’re going to see people, in the United States at least, yawn a little bit about this, but I believe we as an industry should actually get ahead of this and probably push some actual regulation — I think self-regulation would be hard here — push some actual regulation about fair use of personal information.

Stanton: In telecom, the government’s been perpetually roughly a decade behind. And it’s natural, right? It’s a deliberate process, it’s a thoughtful process, and technology moves much quicker. I think the dynamic with respect to privacy issues is globalization; that all of these databases really are global. You think about GDPR, the regulations being formulated and almost finalized in Europe that will affect worldwide standards. The huge case that Microsoft has prosecuted went to the Supreme Court recently on the protection of data that’s stored overseas by an American company, whether that is within the reach of the government. But government it tends to ham-handed and to me, the key is for us, as you suggest, to be thoughtful as entrepreneurs and also thoughtful as possessors of that information in terms of the way we use it because if we are not, there could be an overreaction.

Barton: Do you think that we should just come out and adopt (The European Union’s) GDPR (General Data Protection Regulation)?

Stanton: I think it will become the default. I think that the most restrictive standard in any important economy in the world will end up being the standard.

Barton: Getting ahead of that would be smart.

GeekWire co-founder John Cook contributed to this report.

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