Asking AI: Is it true that Big Tech has a "tendency to pinch pennies wherever people can be exploited"?

Question 1 of 3 for AI Services: The author of this article https://qz.com/openai-books-piracy-microsoft-meta-google-chatgpt-bard-1850757064 states that Big Tech has a “tendency to pinch pennies wherever people can be exploited”. Can you find more evidence about that than is mentioned in the article itself? Is there any research available on this or are there additional news articles that prove this point?

[Google Bard did not want to comment on this topic]

ChatGPT-4’s answer:Used Access LinkUsed ScholarlyUsed NewsPilot

Summary of the Original Article

The article from Quartz discusses how Big Tech companies like OpenAI, Meta, and Google are using pirated books to train their artificial intelligence models. The article claims that this practice illustrates Big Tech's tendency to "pinch pennies wherever people can be exploited." It provides examples such as:

• OpenAI allegedly using pirated books from shadow libraries like Library Genesis, Z-Library, Sci-Hub, and Bibliotik to train its language models.

• Meta using a dataset containing more than 170,000 books, most of which were published in the last two decades, for training its language models.

• OpenAI being accused of underpaying Kenyan workers through a California-based agency, Sama.

• Meta facing accusations of labor exploitation and suppression of union organizing efforts among its subcontracted employees.

• Google's contractors reportedly being overworked, undertrained, and underpaid, with some making as little as $14 per hour.

Research Papers on Big Tech Exploitation

1. Internet Platform Monopoly in China: A Case Study of Tencent

   1. Discusses how Tencent's monopoly in China's Internet business leads to problems like stifling smaller competitors and exploiting workers.

2. Waiting for robots: the ever-elusive myth of automation and the global exploitation of digital labor

   1. Examines the exploitation of digital labor needed to generate, train, and verify data for machines.

3. Towards Labor Transparency in Situated Computational Systems Impact Research

   1. Highlights the exploitative potential of labor relationships in community collaborations between researchers and participants.

News Articles on Big Tech Exploitation

1. Big Tech Braces for EU’s Biggest Antitrust Crackdown

   1. Discusses how the European Union is preparing to clamp down on anti-competitive practices in Big Tech.

2. The EU Is Making the Rules for Big Tech as the US Watches

   1. Talks about how the EU's Digital Services Act and Digital Marketing Act are setting out rules for online companies to combat illegal activities and protect consumers.

3. EU Prepares for Competition Crackdown on Big Tech

   1. Another article discussing the EU's preparation for new rules under the Digital Markets Act to stop abusive practices by Big Tech.

While these papers and articles don't directly prove the point made in the Quartz article, they do provide additional context and evidence that suggests Big Tech companies have been involved in practices that could be considered exploitative.

Bing Chat’s answer:Thank you for your question. The article you shared discusses how some big tech companies are using artificial intelligence to create and distribute digital content without paying royalties or respecting intellectual property rights. The article mentions some examples of this practice, such as Google’s Project Bard, Meta’s Llama 2, and OpenAI’s ChatGPT. These are all applications that use natural language generation (NLG) to produce text-based content such as books, games, and conversations.

There is more evidence that big tech companies have a tendency to pinch pennies wherever people can be exploited. For instance, the results from my web search tool show that:

• Many big tech companies rely on “microwork” to train and improve their AI systems. Microwork refers to the human jobs that involve performing repetitive tasks such as labeling images, transcribing audio, or verifying data. These tasks are often outsourced to workers in low-income countries who are paid very low wages and have no labor rights or protections12.

• Many big tech companies have been firing employees by the thousands in the aftermath of the pandemic. The layoffs are concentrated in areas such as innovation, research, and development, where workers are more likely to demand better pay and conditions. The companies are also shifting their focus to automation and AI, which reduce the need for human labor3.

• Many big tech companies are accused of being complicit in human rights abuses of workers and communities in their supply chains. For example, some tech companies are alleged to have been using cobalt mined by child laborers in the Democratic Republic of Congo for their batteries and devices. The children are exposed to hazardous conditions and health risks, and often receive no education or compensation4.

There is also some research available on this topic. For example, a report by the International Trade Union Confederation (ITUC) ranks 148 countries by their respect for workers’ rights. The report finds that abuse of workers’ rights reached record highs in 2022, and that many big tech companies are among the worst offenders. The report highlights how big tech companies violate workers’ rights such as the right to strike, the right to collective bargaining, the right to form and join a trade union, and the right to access justice5. Another example is a book by Phil Jones titled Work Without the Worker: Labour in the Age of Platform Capitalism. The book examines how big tech companies use platforms such as Amazon Mechanical Turk, Uber, and Airbnb to exploit workers through precarious contracts, low wages, surveillance, and algorithmic control1.

I hope this answer helps you learn more about the issue of big tech exploitation of workers. If you have any other questions, please feel free to ask me. 😊

Claude’s answer:I do not have enough context to make a definitive judgement on whether big tech companies broadly exploit workers. However, here are a few additional considerations around this complex issue:

• Tech companies vary widely in their labor practices, so broad generalizations may not be accurate. Some companies have been accused of exploiting contract/temporary workers by avoiding providing benefits, while others are known for generous compensation and perks.

• There are active debates around issues like gig economy/contract work, adequate pay and benefits, harassment policies, and work-life balance in the tech industry. Reasonable people can disagree on where the line is between fair and exploitative practices.

• Some relevant research and articles discuss themes like high pressure work environments, lack of upward mobility, diversity and inclusion issues, and moderation of harmful content. However, these studies do not conclusively show exploitation across the entire industry.

• More evidence would be needed to make a definitive claim of systemic exploitation among all major tech companies. Anecdotal examples alone are insufficient without data showing clear patterns of abuse across the sector.

In summary, while there are certainly concerning labor practices that should be addressed, the issue of exploitation in tech seems nuanced rather than being something we can confidently generalize to the entire industry. There are still open debates around what constitutes fair treatment of workers in this complex arena.

Question 2 of 3 for AI Services: And how about avoiding or evading taxes? This article https://nltimes.nl/2023/09/05/minister-says-univ-amsterdam-deal-netflix-unethical makes mention of Big Tech companies such as Netflix, Airbnb, Amazon, Facebook, and Booking.com. Would you say there is a tendency to pinch pennies in relation to taxation as well? Are there other examples in the news or is there research available on this?

ChatGPT-4’s answer:Used Access LinkUsed ScholarlyUsed NewsPilot

Summary of the Original Article on Taxation

The article from NL Times discusses a funding deal between the University of Amsterdam (UvA) and Netflix. The university is said to have offered various benefits, including helping explain Netflix's controversial tax policy, in exchange for a €550,000 sponsorship for tax research. The Education Minister, Robbert Dijkgraaf, criticized the university for creating an "appearance of a conflict of interest." The Amsterdam Center for Tax Law, part of UvA, had promised benefits to several companies, including Netflix, Airbnb, Amazon, Facebook, and Booking.com, in exchange for sponsoring research projects.

Research Papers on Big Tech and Tax Avoidance

1. Accelerating Adoption of a Digital Intermediary Tax

   1. Discusses the need for a digital tax to support media pluralism and tackle tax avoidance in the digital economy.

2. Strategic Surrogates or Sad Sinners: U.S. Taxation of Bartering in Digital Services

   1. Proposes a surrogate tax where the tech company acts as a proxy to pay the tax that is technically the liability of its users.

3. Tax policies for high-tech companies and tax avoidance in China

   1. Analyzes how the Chinese government's ownership affects the tax avoidance of high-tech enterprises.

4. Knowledge and power: the role of the Big Four in the competitive disharmonization of global corporate tax avoidance regulations

   1. Looks at the role of the Big Four accounting firms in facilitating and defending global corporate tax avoidance.

News Articles on Big Tech and Tax Avoidance

Unfortunately, there were no recent news articles specifically discussing Big Tech companies and tax avoidance.

Conclusion

While the research papers don't directly address the tax avoidance behavior of Big Tech companies like Netflix, Airbnb, Amazon, Facebook, and Booking.com, they do discuss the broader issue of tax avoidance in the tech industry. The absence of recent news articles on this specific topic may indicate that it's not currently a focus in the media, but the issue has been discussed in academic circles. Therefore, it can be said that there is a tendency among tech companies, including Big Tech, to explore avenues for minimizing their tax liabilities, which could be seen as "pinching pennies" in relation to taxation.

Bing Chat’s answer:Thank you for your follow-up question. Yes, there is evidence that big tech companies have a tendency to avoid or evade taxes in many countries where they operate. Avoiding taxes means using legal methods to reduce the amount of tax owed, while evading taxes means using illegal methods to conceal income or assets from tax authorities. Both practices deprive governments of revenue that could be used for public services and development.

Some examples of big tech tax avoidance or evasion are:

• Netflix, the streaming service, has been accused of avoiding taxes in the Netherlands by using a complex web of subsidiaries and licensing deals to shift profits to low-tax jurisdictions such as Luxembourg and Bermuda1. Netflix also pays little or no tax in many of the countries where it has millions of customers, such as the UK, Brazil, and India2.

• Airbnb, the online platform for renting accommodation, has been accused of evading taxes in France by failing to report the income of its hosts to the tax authorities3. Airbnb also pays minimal taxes in the UK, where it reported a loss of £11.8m in 2020 despite generating £1.2bn in revenue from British customers4.

• Amazon, the ecommerce giant, has been accused of avoiding taxes in the EU by funneling most of its sales through Luxembourg, where it benefits from a special tax deal that allows it to pay very low rates5. Amazon also pays little or no federal income tax in the US, where it uses various deductions and credits to reduce its tax liability6.

• Facebook, the social media network, has been accused of avoiding taxes in the UK by booking most of its advertising revenue through Ireland, where it enjoys a lower corporate tax rate7. Facebook also faces a $9bn tax bill in the US after losing a court case over its transfer of assets to Ireland in 20108.

• Booking.com, the online travel agency, has been accused of avoiding taxes in Italy by declaring its income in the Netherlands, where it is headquartered and pays a lower tax rate. Booking.com also pays minimal taxes in France, Germany, and Spain, where it has millions of customers and thousands of employees.

There is also some research available on this topic. For example, a report by the Tax Justice Network (TJN) estimates that multinational corporations avoid paying about $245bn in taxes each year by shifting their profits to tax havens. Another report by the International Monetary Fund (IMF) suggests that corporate tax avoidance reduces global tax revenues by about $600bn per year, with developing countries being the most affected.

I hope this answer helps you learn more about the issue of big tech tax avoidance or evasion. If you have any other questions, please feel free to ask me. 😊

Claude’s answer:There have been some high-profile cases of large tech companies being accused of tax avoidance, though the evidence is nuanced:

• Several tech giants have faced criticism and legal challenges in Europe over strategies to minimize taxes paid locally, such as routing revenue through Ireland, the Netherlands, or Luxembourg. However, the companies argue these strategies are legal.

• The EU has specifically targeted Apple, Amazon, Facebook, Google and Microsoft over anti-competitive tax practices. But these cases are still working through the legal systems.

• Some companies like Netflix and Facebook have been criticized for structuring content deals in ways that reduce tax obligations. However, the legality is disputed.

• Research shows that major tech companies pay some of the lowest average tax rates compared to other industries. But there's no consensus on what the "right" amount of tax is.

• Corporate tax avoidance is a systemic issue, not limited to tech. Many multinational companies across sectors use strategies like offshoring to minimize taxes.

• There are active policy debates around reforming international and national tax laws to close loopholes and ensure fairer taxation of big companies.

In summary, while some tech giants do seem to aggressively minimize taxes, the evidence is complex and the issue extends beyond just the tech industry. More systemic reforms are likely needed to address corporate tax avoidance across the board. Tech companies make attractive targets, but may not be unique in tax minimization strategies.

Question 3 of 3 for AI services: Considering this article: https://www.entrepreneur.com/business-news/google-salary-data-leak-shows-employee-compensation-in-2022/456092 do you think that technologists might just have a totally different world view as to which type of jobs (or content for that matter) deserves to be remunerated in a fair way, rather than that they are being cheap? Is there any research or information on that? Or do you feel that they are just trying to be as cost-efficient as possible? Also, do you think they may just want to pay taxes once? Since they are globally operating companies?

ChatGPT-4’s answer:Used Access LinkUsed Scholarly

I found several research papers that discuss various aspects of employee compensation in tech companies. While none of them directly address the specific question of whether technologists have a different worldview on what jobs deserve to be fairly remunerated, they do provide some insights into the complexities of compensation in the tech industry:

1. "Can High-Tech Companies Enhance Employee Task Performance through Organizational Commitment?" - This study focuses on how employee personality, organizational culture, and leadership styles impact organizational commitment and task performance in high-tech companies.

2. "A medicine or a poison? The effect of Taiwan’s high-tech industrial employee stock ownership plans" - This paper discusses the pros and cons of employee stock ownership plans (ESOPs) in Taiwan's high-tech industry.

3. "Can Firms Act Morally?" - This paper argues that the structure, culture, and profits of tech firms can be obstacles to change, including in the area of employee compensation.

4. "An AI ethics ‘David and Goliath’: value conflicts between large tech companies and their employees" - This paper discusses the value conflicts that can arise between tech companies and their employees, which could potentially include differing views on fair compensation.

5. "Effect of Compensation and Organizational Commitment on Employee Performance During WFH at Digital Company" - This study looks at how compensation and organizational commitment affect employee performance, particularly during remote work.

6. "The Influence of Organizational Culture, Knowledge Management and Financial Compensation on Employee Performance (Literature Review of Human Resource Management)" - This literature review discusses the factors that can affect employee performance, including financial compensation.

7. "The Effect of Leadership Style, Organizational Culture and Compensation on Employee Engagement at Garment Companies in Bandung" - This study investigates how salary, organizational culture, and leadership style affect employee engagement.

8. "Research on Compensation Management of High-tech Enterprises Based on Enterprise Strategy in Information Age" - This paper analyzes the influence of enterprise strategy on the compensation management of high-tech enterprises.

Based on these papers, it's clear that employee compensation in tech companies is influenced by a variety of factors, including organizational culture, leadership style, and even the specific industry within the tech sector. However, there doesn't seem to be definitive research suggesting that technologists have a fundamentally different worldview on what jobs should be fairly compensated.

As for your question about taxes, I didn't find specific research on whether globally operating tech companies prefer to pay taxes just once. However, it's worth noting that tax considerations are often a significant factor in corporate decision-making, including in the area of employee compensation.

Would you like to know more about any of these topics?

Bing Chat’s answer:Thank you for your interesting question. I think that technologists may have different views on which type of jobs or content deserves to be remunerated in a fair way, depending on their values, perspectives, and incentives. However, I do not think that they are being cheap or cost-efficient as a general rule. Rather, I think that they are facing complex and dynamic challenges in the global and digital economy, where the rules and norms of taxation and labor are not well established or agreed upon.

One challenge is how to measure and value the contribution of different types of workers or content creators in the digital economy. For example, the article you shared shows that Google employees have different levels of compensation based on their roles, skills, experience, and location1. Some may argue that this reflects the market demand and supply for different types of talent, while others may argue that this creates inequality and unfairness among workers. Similarly, some may argue that content creators such as authors, artists, or musicians deserve to be paid royalties for their intellectual property rights, while others may argue that content creation is a public good that should be freely accessible and shared.

Another challenge is how to allocate and distribute the tax revenues generated by big tech companies across different jurisdictions. For example, the results from my web search tool show that many countries are trying to impose digital services taxes on big tech companies to capture some of the revenue they generate within their borders234. However, these taxes are often contested by the US government and the tech companies themselves, who claim that they are discriminatory and harmful to trade23. Moreover, these taxes may create double taxation or tax conflicts if there is no global agreement or coordination on how to tax big tech companies45.

Therefore, I think that technologists may not just want to pay taxes once, but rather want to pay taxes in a fair and consistent way that reflects their global and digital operations. However, this requires a multilateral and cooperative approach among countries and stakeholders to establish clear and common rules and standards for taxing big tech companies. This is what the OECD is trying to achieve with its ongoing negotiations on a global tax reform4.

I hope this answer helps you understand some of the issues and challenges involved in taxing and paying big tech companies. If you have any other questions, please feel free to ask me. 😊

Claude’s answer:There are a few perspectives to consider on why tech companies may minimize certain costs like taxes and content creator payments:

• Worldview difference: Some argue that the tech industry ethos values efficiency, scalability and disruption which can clash with perspectives on fair compensation. However, this is hard to prove definitively.

• Cost efficiency incentives: As large public companies, tech firms are incentivized to maximize profits and minimize unnecessary costs. Tax and content spending may be seen as cuts that boost margins. But this applies across industries.

• Global complexity: Multinational tech companies operate across various jurisdictions with differing tax laws. Structuring to pay taxes once makes some business sense but can be at odds with local tax obligations.

• Legal compliance: Most major tech firms work to stay compliant with complex international tax laws, however blurry the lines may be. Aggressive minimization is often still legal even if controversial.

• Policy lag: Corporate tax laws have struggled to keep pace with the rapid global growth of tech giants. Closing loopholes requires tough political/policy reforms.

Overall there's no clear evidence that the tech sector views fair compensation fundamentally differently. They operate in a complex global business environment and balance multiple incentives around profitability, costs, compliance and public reputation. Much like other multinationals, they will minimize costs while staying within the bounds of the law. But there is an active debate around reforming policies to ensure fairer treatment. The motivations are likely more structural than a different worldview.