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As Facebook prepares for increased competition scrutiny in the U.S. and Europe, its top brass is repeatedly warning lawmakers and regulators that antitrust action could be a distraction from a much bigger threat: China.
Facebook global affairs chief Nick Clegg is the latest high-profile executive to make this case, calling at a speech in Berlin in late June for the United States and Europe to drop debates over breaking up the companies and instead focus on the growing threat of Chinese censorship, according to an article in the Telegraph. He called on American and European regulators to “turn off the white noise” and pay attention to the fact that countries like China are writing the “new rules of the internet themselves.”
“The Great Firewall of China means great swaths of what we think of as the internet — Facebook, Instagram and WhatsApp included — are unreachable by its citizens and much of the content they can access is heavily censored,” Clegg said.
These remarks could provide a preview of how Facebook may try to defend itself in Washington as House lawmakers open a wide-ranging probe into competition in the technology sector, and federal regulatory agencies like the Federal Trade Commission and Justice Department signal increased scrutiny could be coming to Silicon Valley as they divvy up oversight of top companies.
Clegg's defense also underscores how rapidly the social network's political situation and ambitions have evolved in recent years as Facebook has been battered with controversies, ranging from privacy mishaps to foreign influence during the 2016 election. Just a few years ago, the company looked to China as the next natural market where it could continue its rapid global expansion. But now the company’s top leadership increasingly describes China's burgeoning tech sector as a formidable threat.
“Describing China as a strategic competitor is a far cry from where they were just a few years ago, when [Facebook chief executive Mark] Zuckerberg was posting pictures of morning jogs in Tiananmen Square,” Peter Singer, a strategist and senior fellow at the New America Foundation, told me. “It shows just how much has changed, both in politics and in the corporate strategy.”
Facebook’s China warnings have extended to the company’s highest ranks, with Facebook chief executive Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg making similar arguments.
“Let me share with you something else I heard in my meetings in D.C. 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 realization that these companies are not going to be broken up,” Sandberg said in an interview with CNBC.
Facebook’s characterization of China as a competitor also underscores how the company has forgotten its once intense efforts to expand into the world’s largest country. Zuckerberg famously learned Mandarin and even joined a Chinese business school’s board, as BuzzFeed’s Ryan Mac noted, but the company has now backed off.
Even companies who have been weighing their options in China are invoking nationalism as a defense in Washington. Google chief executive Sundar Pichai hasn’t called out China specifically, but in a recent interview on CNN warned that overregulation could benefit tech companies in other countries.
“There are many countries around the world which aspire to be the next Silicon Valley, and they are supporting their companies, too. So we have to balance both,” Sundar Pichai said in a June interview. “This doesn't mean you don't scrutinize large companies, but you have to balance it with the fact that you want big, successful companies, as well.”
Some Democrats active on tech policy appear to share some of Silicon Valley’s concerns. Sen. Mark R. Warner (D-Va.) has been sounding the alarm about China’s threat to the U.S. tech sector, and while he says more needs to be done to introduce competition in Silicon Valley, he also remarked earlier this year that breaking up Big Tech could give China a boost.
“These are now companies that don’t exist in an American-only vacuum. These are all global companies,” the senator told CNBC.
“I have some concern, as somebody who is very concerned about the rise of China, that if we were to kind of chop off the legs of Facebook and Google, that they might be replaced by Alibaba, Baidu, Tencent — companies that are totally enmeshed with the Chinese government in their global economic plan,” he added.
BITS: Federal law enforcement is mining drivers' license databases to run facial-recognition searches without consent, according to an investigation by my colleague Drew Harwell. The findings add to growing concerns from both Congress and privacy advocates over the unchecked use of facial recognition technology by the government.
Records sent to The Washington Post showed that with as little as an email, Federal Bureau of Investigation and U.S. Immigration and Customs Enforcement agents were able to quickly gain access to state Department of Motor Vehicles databases that include the photos of millions of Americans, including undocumented immigrants in some states.
A government watchdog report last month revealed the FBI conducted nearly 400,000 facial recognition searches using state and federal databases in the past five years. But the agency has offered little information about how the searches are used or their rate of success, Drew reports.
The potential for misuse of the technology, which research has shown can lead to false matches, especially for people with darker skin, worries advocates.
“The public doesn’t have a way of controlling what information the government has on them,” Jacinta González, a senior organizer for the advocacy group Mijente, told Drew. “And now there’s this rapidly advancing technology, with very few guidelines and protections for people, putting all of this information at their fingertips in a very scary way.”
NIBBLES: Former defense secretary Jim Mattis met privately with an Amazon executive in charge of selling its cloud computing — just before initiating a contract bidding process that Amazon’s critics say favored the company, new emails surfaced by the Wall Street Journal’s John D. McKinnon reveal. The details could bolster Oracle's pending lawsuit that claims the Pentagon unfairly skewed requirements for an eight-figure cloud computing contract toward Amazon.
Both the Pentagon and Amazon have denied wrongdoing. A government watchdog report also cleared the contract of any foul play earlier this year, but members of Congress have continued to raise questions about the bid process and the pending lawsuit has stalled Amazon from netting the lucrative contract. This week a federal court will begin hearings in the lawsuit, and Oracle has no intention of backing down.
“It is highly irregular that the Secretary of Defense attended a small, private dinner for ‘off-the-record’ discussions with an Amazon sales executive,” Kenneth Glueck, who runs Oracle’s Washington office, told the Journal.
Jeff Bezos, founder and CEO of Amazon, also owns The Washington Post.
BYTES: Advocates are calling for Facebook to better enforce hate speech policies in private groups, my colleague Elizabeth Dwoskin reports. CEO Mark Zuckerberg has hailed private groups as the future of the company, but advocates believe the pivot is “on a collision course with Facebook’s stated goal of cleaning up its platform ahead of the 2020 U.S. presidential election,” Elizabeth writes.
“Large private groups remain unmoderated black boxes where users can freely threaten vulnerable populations,” Jonathan Greenblatt, chief executive of the Anti-Defamation League, told Elizabeth. “Without any AI or human moderators, it’s easy to orchestrate harassment campaigns … As Facebook moves to more and more private communication, we’re concerned about this delinquency.”
Facebook’s failure to moderate private groups has raised concerns about several issues: use by white supremacists, the spread of medical misinformation, and most recently abusive content from law enforcement.
Facebook representative Jen Ridings told Elizabeth that the company uses both human and AI moderators for group content. “There is still more we can do, and we continue to improve our technology to detect violating content,” Ridings added.
— News from the private sector:
— The White House has not invited Twitter or Facebook to attend its social media summit on Thursday, according to CNN's Oliver Darcy. People who spoke to CNN on the basis of anonymity told CNN that it wasn't surprising and said the event "would amount to a a right-wing grievance session and was not aimed at seriously discussing some of the issues facing large technology companies." The White House declined to comment. (In case you missed it, my colleague Tony Romm has a rundown of the conservative commentators who did get invites in last week's Technology 202).
— More news from the public sector:
- The Senate Judiciary Committee will call in witnesses for a hearing on “protecting innocence in a digital world” at 10 a.m.
- The House Homeland Security Committee will hold a hearing on the use of facial recognition technology at July 10 and 10 a.m.
- The House Appropriations Committee will hold a hearing on United States efforts to counter Russian disinformation on July 10 at 10 a.m.