Facebook’s latest reason it shouldn’t be broken up: Chinese companies will dominate

22-May-2019 Intellasia | VOX | 6:00 AM Print This Post

Facebook’s latest defense against it being broken up: China. If the argument seems well timed, it’s because it is.

Facebook chief operating officer Sheryl Sandberg in an interview with CNBC on Friday pushed back against growing calls for the social media giant to be broken up by suggesting that such a maneuver would disadvantage it against China.

“Let me share with you something else I heard in my meetings in DC. And I heard this in private meetings from both sides of the aisle, that while people are concerned with the size and power of tech companies, there’s also a concern in the United States with the size and power of Chinese companies, and the realisation that these companies are not going to be broken up,” Sandberg said.

The remarks land amid growing tensions between the United States and China. The trade war between the two nations has ratcheted up in recent weeks after the Trump administration raised taxes on Chinese imports and China responded with additional tariffs of its own.

The Trump administration has also cracked down on Chinese telecommunications company Huawei. Last week, President Donald Trump issued an executive order banning US companies from using information and technology from anyone considered a national security threat an order aimed squarely at Huawei. The Commerce Department placed Huawei and 70 of its affiliates on its “Entity List,” which is basically a trade blacklist that bars anyone on it from buying parts and components from US companies without the government’s approval first.

It’s not clear what Facebook is so worried about with regard to China. Sure, the company has Chinese competitors, including Chinese investment company Tencent, which owns messaging app WeChat. But it’s not as though the federal government is going to allow WeChat to overtake social media messaging in the US.

A Facebook spokesperson declined to elaborate on Sandberg’s remarks.

It seems, at least in part, that Sandberg is trying to seize on the particular moment where attention is already on China and the potential threats it poses to the US, including when it comes to tech. In invoking China, Sandberg is pitting Facebook against a bigger boogeyman in the current political conversation than itself.

The idea of breaking up Facebook has a lot of layers to it. China hasn’t really been one of them.

A cascade of scandals over the years related to data privacy, misinformation, and election security, among other issues, has put increased scrutiny on Facebook. There’s a growing chorus of observers calling for the company, which also owns Instagram and WhatsApp, to be broken up, because it has amassed too much power and proven that it can’t be trusted to act responsibly with that power.

Earlier this month, Facebook co-founder Chris Hughes called for Facebook’s breakup, arguing that regulators should unwind its Instagram and WhatsApp acquisitions, create space for more competition, and enact new privacy legislation what restricts what data Facebook can collect in the US.

Sen. Elisabeth Warren (D-MA) has put forth a plan that would break up Facebook as well as Google, Amazon, and Apple. One argument she makes is that more than two-thirds of internet traffic goes through sites that Facebook or Google own or operate, and that the consolidation involved is too much. Like Hughes, she proposes its WhatsApp and Instagram acquisitions be unwound.

Some other 2020 Democrats have followed her lead, while others have declined to go that far. Politicians on the left and the right have called for further regulatory and legislative action surrounding Facebook and other social media companies.

Breaking up Facebook is just one of many ideas surrounding what to do about the company. And as Vox’s Ezra Klein recently pointed out, it might not be the solution to the Facebook problem:

There are two dominant critiques of Facebook circulating. One is that Facebook is a modern monopolist, stifling competition in its industry. The other is that it alongside many of its competitors is akin to a modern tobacco company, in which fierce competition between firms has led to an arms race in developing techniques to foster digital addiction and hoover up user attention, no matter the social cost.

Crucially, these critiques point toward different solutions. If the problem is that Facebook is blocking competition in its sector, then breaking it apart is a fix. But if the problem is that the competitive incentives that shaped Facebook and Instagram, and Twitter, and Snapchat, and YouTube lead to dangerous products, then unleashing even more competition might make the problem worse.

Facebook has had its fair share of problems with China, despite its overtures to the Chinese government. CEO Mark Zuckerberg famously learned Mandarin and conducted interviews and speeches in the language in an effort to court Chinese officials. In 2016, he made headlines for going jogging in Beijing.

Facebook has long had desires to compete in the Chinese market (and it’s not alone in that, so has Google). But Zuckerberg has acknowledged that its endeavors have not been easy. He told Recode’s Kara Swisher last year, point blank, that Facebook is blocked in China and that he thinks the company is “a long time away from doing anything. But the issue appears to be one with Chinese regulators and broader censorship in China, not whether Chinese companies are broken up.

Facebook keeps saying it’s going to get better and just doesn’t

Maybe Sandberg will have further explanations on what she means that Facebook shouldn’t be broken up because of China. But if she doesn’t, it seems like her comments are another attempt to change the conversation about the Menlo Park, California-based company without addressing its problems instead. Facebook has been apologising and promising to get better since it was founded, and it just … hasn’t.

There’s an argument to be made, as Ezra Klein did, that breaking up Facebook isn’t the answer. But it’s not clear what the Chinese-tech-won’t-be-broken-up remark is really trying to accomplish beyond capitalising on a current political climate where we’re in the midst of a trade war and the US president and many within his administration are eager to take action against China.

Sandberg’s comments are conspicuous in their timing. They’re also an example of the lengths Facebook is sometimes willing to go to shift responsibility or protect its business interests in the face of criticism.



Category: China

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