The chairman of Google's parent company says that if internet companies don't get their act together, 'bad things will occur' (GOOG, GOOGL)

Facebook CEO Mark Zuckerberg

In the wake of Facebook's privacy scandal, John Hennessy, the new chairman of Google parent company Alphabet, spoke to Business Insider.
He pulled no punches, telling us that if any big internet company uses personal information in ways that people have not authorized, the entire internet industry will be hurt.
Facebook's problems, and the attention that Congress is paying to Google and Twitter, "is a series of wake up calls for the industry to pay attention," he said.

In the shadow of the still-raging privacy scandal enveloping Facebook , Business Insider talked to John Hennessy, the new chairman of Alphabet, parent company to Google.

Hennessy pulled no punches in expressing his opinions that internet companies who earn their money selling ads, like Facebook, Google and others, "have an obligation to earn and preserve our trust. And that’s vital. Unless that becomes enshrined in the company's eco-system in a really deep way, bad things will occur."

He elaborated: "We give them lots of information. It's not just personal information that can be misused. It's information that can be used in cybercrime."

To recap: Facebook has admitted that personal data on up to 87 million of its users had been gathered and used by political research firm Cambridge Analytica to sway voters in campaigns including the 2016 US presidential election. And it also admitted that hundreds of Russian bots were found on Facebook spreading political misinformation and that "malicious actors" had likely gathered personal data on most of its users.

Congress has been demanding Zuckerberg come to Washington to testify, and he has agreed to do so.

Google has largely avoided the brunt of this controversy, thus far. While the search giant admitted last fall that Russian agents had bought ads on its networks to meddle in the 2016 presidential campaign, the focus is squarely on Facebook.

Meanwhile, the Senate Judiciary Committee is holding a hearing on data privacy on April 10, 2018, and Zuckerberg has agreed to come to D.C. and answer their questions. Senator Chuck Grassley, who heads that committee, also asked that Google CEO Sundar Pichai and Twitter CEO Jack Dorsey come and testify as well.

John Hennessy With all of this as a backdrop, we asked Hennessy about how advertising-driven internet companies are treating people's data. Hennessy is a famed computer scientist, and the former president of Stanford University. He joined Google's board back in 2004, a few months after it became a public company. He was named chairman of Alphabet in January when Eric Schmidt stepped down.

Joining him in this interview was David Patterson, another famed professor at the University of California at Berkeley who worked with Hennessy inventing modern-day computer chips. Patterson is also a distinguished engineer at Google.

A lightly edited transcript of our conversation:

Business Insider: Facebook is in hot water these days. No one wants to live without the internet anymore, but we are now seeing some terrible effects of sharing so much with internet companies, especially ones with advertising business models. What do you think needs to happen to protect people?

John Hennessy: We can’t live without the internet and we can’t live without the services that the internet provides. At the same time, we as uses have to trust the companies and the companies have to earn our trust.

We give them lots of information. It's not just personal information that can be misused. It's information that can be used in cybercrime.

And that information gets stored online and the companies involved have an obligation. They have an obligation to earn and preserve our trust. And that’s vital. Unless that becomes enshrined in the company ecosystem in a really deep way, bad things will occur.

And that will hurt the industry as a whole, not just the individual companies and not just the users who were compromised. But it will hurt the industry as a whole, because it will break that trust bargain we need to operate in this environment.

BI: There are renewed calls for government regulation. Is that the answer?

The downside with regulation is that Congress moves at a speed that's slower than a paddle boat that doesn't have a paddle. And the internet moves at very fast speeds. That’s why everybody is so afraid of regulation. It’s not that they might not be well-meaning to begin with. But they can’t keep up with the pace of technology.

It's up to the industry. If you don’t self-police, if you don’t preserve the trust of your user community, then you will get regulated. So I think this is a series of wake up calls for the industry to pay attention.

David Patterson: We have another legal mechanism besides regulation, which is suing companies. That’s another way to get a company’s attention.

Democracy is one of humanity's greatest inventions. As long as you believe that elections are not rigged, you accept if 51% of your neighbors want to do something, and you are part of the 49%, you just, go, 'OK, that’s fair.' But what’s going on with the Russian stuff ... [can make us question] was the election compromised? What’s going on?

BI: Can these advertising-based internet companies self-regulate? If so, how?

JH: Yes. They can do it, if they are willing to take a long-term focus. Companies have no long term interest in seeing the industry become regulated or in engaging in self-destructive behavior.

The problem is, in the industrial environment, you are driven by short-term decisions, to optimize quarterly returns, or the next annual revenue. That’s fine to the extent that you preserve your long-term objectives. And who do you care about in the long term? You care about your long-term shareholders, your long-term customers and your long-term user community.

And that’s what you ought to be looking at. With the focus on long-term. If that means you give up a short term opportunity to give up a few bucks, then that’s what we ought to do.

DON'T MISS: Alphabet's chairman and a Google distinguished engineer won a prestigious $1 million prize

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