Zuckerberg’s talking points: Breaking up Facebook “strengthens Chinese companies”

Break up, and break down.
Break up, and break down.
Image: Reuters/Leah Mills
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On April 10 Mark Zuckerberg appeared at a Senate hearing to defend his company’s data protection policies following revelations that Cambridge Analytica, a research firm that worked with the Trump campaign, surreptitiously harvested information from 87 million Facebook users.

At the hearing, many of Zuckerberg’s talking points recalled statements he had made before. He called the Cambridge Analytica incident a “mistake,” said that he’s open to government regulation of Facebook, and vowed the company will improve transparency. But another talking point was somewhat unexpected—competition from Chinese tech companies.

When senator Orrin Hatch asked Zuckerberg what sorts of legislative changes could prevent the Cambridge Analytica situation from happening again, Zuckerberg laid out three principles, one of which entailed “enabling innovation” in the face of rivalry from China:

And the third point is — is just around enabling innovation. Because some of the abuse cases that — that are very sensitive, like face recognition, for example — and I feel there’s a balance that’s extremely important to strike here, where you obtain special consent for sensitive features like face recognition, but don’t — but we still need to make it so that American companies can innovate in those areas, or else we’re going to fall behind Chinese competitors and others around the world who have different regimes for — for different new features like that.

That was a slightly odd point to make at a hearing on privacy concerns. China is home to three billion-dollar companies that specialize solely in facial recognition, while the US is home to no analogous companies. But that’s in large part due to the backing of the government, which openly uses these technologies for public surveillance, while the US has been more circumspect about such uses.

Later, in a clumsy attempt to link Facebook’s success to American capitalism, senator Dan Sullivan asked Zuckerberg if it would have been possible to start Facebook from his dorm room in a country like China, to which Zuckerberg replied, “Well, Senator, there are — there are some very strong Chinese internet companies.” He later added:

And when I brought up the Chinese internet companies, I think that that’s a real—a real strategic and competitive threat that, in American technology policy we (inaudible) should be thinking about.

Zuckerberg’s prepared notes for the hearing, visible in AP photos, addresses competition with China even more starkly. One bullet point reads: “Break up FB? US tech companies key asset for America, break up strengthens Chinese companies.”

The remarks were surprising given Zuckerberg is known for making conciliatory gestures toward the political regime in mainland China, where Facebook remains blocked. The CEO has been photographed next to president Xi Jinping and Lu Wei, China’s now-disgraced former internet czar, who spearheaded a crackdown on online freedom that’s still going on. When in China, he’s jogged in lung-bursting smog and given lectures in Mandarin. Facebook also reportedly had been developing software to censor content more efficiently by geographic area, in hopes of expanding into China.

Zuckerberg’s remarks at the Senate, however, evoked an “us versus them” worldview that’s less consistent with his previous actions, and more in line with Washington’s aims of curbing Chinese political influence in the US tech sector. Those concerns, which are bipartisan, have seen the US pre-emptively block Singapore-based chipmaker Broadcom’s efforts to acquire US semiconductor designer Qualcomm, and bar US carriers from offering handsets from Chinese telecom giant Huawei over national security worries.

It’s possible that Zuckerberg touched on Washington’s fears about Chinese influence in order to stave off regulation. Facebook did not immediately reply to questions about Zuckerberg’s comments.

Still, it’s worth considering what it would mean if the “next Facebook” were to be Chinese.

Beijing has established a precedent for relying on domestic tech giants to advance the party’s agenda—and that can entail anything from setting up a tech investment fund and opening artificial intelligence labs, to sharing user data with the government and suppressing dissent. Its leading tech companies must practice loyalty to the party at any cost. Case in point—the same day Zuckerberg gave his hearing, Zhang Yiming, creator of the app Jinri Toutiao (which shares many similarities with Facebook’s News Feed) published an apology for not promoting “core socialist values” and promised to increase his company’s in-house team of censors from 6,000 to 10,000 people.

Most of China’s internet giants haven’t meaningfully expanded abroad. But that could soon change. Right now, while Uber retreats globally in order to fight off Lyft in the US, Didi Chuxing, a near-monopoly in ride-hailing in China is filling the void left in its absence.  Armed with deep pockets and lots of data, it’s possible that other Chinese companies will eventually expand abroad and offer technology that’s so good that consumers and businesses rely on it the same way they rely on Facebook right now. And when issues surrounding data security or internet freedom emerge, foreign governments will be reckoning not only with a company’s executives, but with the Communist Party.

Of course, it’s not clear regulating Facebook would expedite this at all—even if Zuckerberg wants lawmakers to worry it will.