Top startup investors see mounting 'backlash' against tech

By Heather Somerville

LAGUNA BEACH, Calif. (Reuters) - Two of the technology industry's top startup investors took to the stage at a conference on Wednesday to decry the power that companies such as Facebook Inc had amassed and call for a redistribution of wealth.

Bill Maris, who founded Alphabet Inc's venture capital arm and now runs venture fund Section 32, and Sam Altman, president of startup accelerator Y Combinator, said widespread discontent over income inequality helped elect U.S. President Donald Trump and had put wealthy technology companies in the crosshairs.

"I do know that the tech backlash is going to be strong," said Altman. "We have more and more concentrated power and wealth."

 

The market capitalization of the so-called Big Five technology companies - Alphabet, Apple Inc , Amazon Inc , Microsoft Corp and Facebook - has doubled in the last three years to more than $3 trillion (2.27 trillion pounds). Silicon Valley broadly has amassed significant wealth during the latest tech boom.

Altman and Maris spoke on the final day of The Wall Street Journal DLive technology conference in Southern California.

Facebook's role in facilitating what U.S. intelligence agencies have identified as Russian interference in last year's U.S. presidential election is an example of the immense power the social media company has amassed, the investors said.

"The companies that used to be fun and disruptive and interesting and benevolent are now disrupting our elections," Maris said.

Altman said people "are understandably uncomfortable with that."

Altman, who unequivocally rebuffed rumors that he would run for governor of California next year, said he expects more demands from both the public and policy makers on data privacy, limiting what personal information Facebook and others can collect.

Maris said regulators would have good cause to break up the big technology companies.

"These companies are more powerful than AT&T ever was," he said.

Facebook said last month it had discovered an operation likely based in Russia that spent $100,000 on political ads and created 470 fake accounts and pages that spread polarizing views on political and social issues.

Altman and Maris offered few details of how to accomplish a redistribution of wealth. Maris proposed shorter term limits for elected officials and simplifying the tax code. Altman has advocated basic income, a poverty-fighting proposal in which all residents would receive a regular, unconditional sum of money from the government.

(Reporting by Heather Somerville; editing by Jonathan Weber and David Gregorio)