Friday, May 24, 2019

"Big Tech: Breaking Us Up Will Only Help China" (GOOG; TWTR; FB; AMZN)

There's a line and they just crossed it.
Sure, I was onboard with the "If you scrutinize fund manager pay then the terrorists have won" pitch back in aught-seven but this, this is just so transparently self-serving.

From Wired:
Over the past week, both Facebook chief operating officer Sheryl Sandberg and former Google CEO Eric Schmidt made the same appeal to American nationalism, with differing degrees of subtlety: Breaking up Big Tech will only help China.

It’s a politically expedient plea as calls for regulating tech intensify amid growing concern about China’s tech prowess and an escalating US-China trade war. But the argument rests on the idea that what’s good for Facebook and Google is good for America. It also ignores how Silicon Valley is simultaneously seeking growth through partnerships with some of those same Chinese competitors, such as Google’s investment in and reported talks with Tencent to bring Google Cloud to China.

Sandberg made her case against breaking up Facebook explicit. In an interview Friday, CNBC asked if Facebook was prepping for a big antitrust battle. In response, Sandberg recounted recent private meetings with Democrats and Republicans in Washington. There, she said, she heard 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.”

Schmidt was less direct but conjured the same fears of falling behind China. On Sunday he told the The Telegraph there is no legal basis to break up tech companies, arguing that “regulatory bias” in the West against Google and other American firms hurts consumers and hands China a competitive advantage on everything from privacy to data collection. "Chinese companies are growing faster, they have higher valuations, and they have more users than their non-Chinese counterparts," said Schmidt, who will step down from Alphabet’s board in June. "It’s very important to understand that there is a global competition around technology innovation, and China is a significant player and likely to remain so.”

Google and Facebook declined to respond to questions from WIRED.

Mark Zuckerberg, who reportedly offered to let President Xi name his first-born child, laid the groundwork for this strategy during a congressional hearing last year. Asked if Facebook was too powerful, Zuckerberg rerouted the conversation toward Chinese internet companies. He said American tech policymakers “should be thinking about” those companies because they pose “a real strategic and competitive threat.” (Zuckerberg even spelled out the China defense in his notes for the hearing, photographed by the Associated Press, which included the line “Break up FB? US tech companies key asset for America; break up strengthens Chinese companies.”)

It’s not a new line. Dominant companies and their defenders have made the same argument for decades. In the late 20th century, some argued that Japan’s rising power was a bigger economic threat than anticompetitive practices by Microsoft or IBM. In March, both Qualcomm and Apple used Washington’s fear of falling behind China in 5G to plead their case in a bitter fight with each other over patent royalties.

But this appeal to American nationalism has been getting more play recently as the on-again, off-again trade war with China appears to be back on. Nicol Turner-Lee, a fellow at the Brookings Institution’s Center for Technology Innovation, says concern about falling behind China is valid, especially in regards to artificial intelligence and advanced 5G wireless networks. But, she adds, the China defense is among the few plausible arguments Big Tech can bring before Congress right now. “They can’t say, ‘We know we’re allowing people to mess with our elections, but don’t break us up. We’re good for democracy, don’t break us up,’” she says....

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