2018 will be remembered as the year when the tide turned against tech. In November, the five largest US tech stocks lost an aggregate value of more than $1 trillion. Despite some ludicrous valuations, the backlash was fueled by a spate of revelations about the abuse of market power, the collection of personal data, the pervasive digital manipulation, and even the accusation of “brain hacking.” It is now proven that social media in general, and Facebook in particular, are “monsters of misinformation” that can (and have been) deployed for disinformation campaigns (by countries such as Russia). In 2019, public animosity toward big tech is likely to intensify, and greater regulation will ensue.
The tech backlash is highly visible in the wellness space where the offering of digital detox has become a compelling value proposition. There is now copious academic evidence (documented in particular by the GWI Digital Wellness Initiative) that the abuse of tech consumption in general, and of social media in particular, can have a detrimental effect on mental health and sometimes even on physical health. The range of issues causing alarm is more and more extensive.
One such recently emerging and fast-growing concern is over the negative impact online gaming can have on children, teenagers and young adults. A few weeks ago, the US Federal Trade Commission announced its decision to investigate (as European regulators are already doing) the use of “loot boxes” (a consumable virtual item that can be redeemed to receive a randomized selection of further virtual items). The key purpose of loot boxes—endemic in the video game industry—is to create addiction. Many believe that successful games, such as Angry Birds and Candy Crush, sowed the first seeds of this addictive nature of the digital space.
Interestingly, it is activist investors who are leading the fight against digital addiction. CalPERS (a pension fund) and JANA Partners (a hedge fund) now ask companies in which they hold shares to develop tools that help parents to limit the impact of video games on mental health. Could the wellness industry be more vocal and forge an alliance with the activist investors’ community?