RUTHLESS THAN CLUELESS
LAWMAKERS in the UK released a trove of Facebook documents this week that provide an intriguing glimpse inside the company – and obliterate any remaining notions of its chief executive officer as an innocent babe in the woods.
As Nate Lanxon and Sarah Frier wrote, internal emails show Facebook wielding user data like a “commodity that could be harnessed in service of business goals”. News organisations previously disclosed some of these details, in part from versions of some of these same documents. But this fuller set of company deliberations are now being scoured to assess how truthful Facebook has been about its business activities and privacy practices.
The documents are a Rorschach test of readers’ opinions on the company. If you’re inclined to believe Facebook is a scourge, there’s evidence to support the idea that the company treats user privacy like a soiled rag and abuses its power. The documents also show what almost any company would do to preserve its self-interest.
For me, the documents have illuminated the nature of Mark Zuckerberg, Facebook’s co-founder and chief executive, as a ruthless businessman and savvy corporate strategist. This shouldn’t be news to anyone who has followed Facebook’s history or watched the but the documents add colour to the less-discussed aspect of Zuckerberg’s character as a deeply involved tactician seeking to maximise Facebook’s revenue and as a cut-throat executive willing to (metaphorically) kneecap competitors.
This is not Mark Zuckerberg as a Mayberry-dwelling naif who sweats through his hoodie when he’s nervous and cheerfully pets a cow. This is Mark Zuckerberg as Vito Corleone.
Zuckerberg was intimately involved in 2012 as the company debated whether and how to generate revenue from mobile games and other features that outside developers were stitching into Facebook. In a discussion with executives over email in October and November 2012, he took the position that Facebook should permit companies fairly broad and no-cost access to information about Facebook users. He THE arrest in Canada of Meng Wanzhou, a top executive at China’s Huawei Technologies and daughter of the founder and chief executive officer, jolted the global business community this week and raised fears that a truce in the Us-china trade war could come to a swift end.
Meng’s arrest came at the behest of US authorities and is connected to an investigation into alleged violations of US trade sanctions.
China’s foreign ministry said neither the US nor Canada had provided reasons for the arrest.
Huawei is the world’s largest supplier of telecommunications network equipment and second-biggest maker of smartphones, with revenue of about $92 billion last year. Unlike other big Chinese technology firms, it does much of its business overseas and is a market leader in many countries across Europe, Asia and Africa.
The company was founded in 1987 by former military officer Ren Zhengfei. It remains privately held and describes itself as employee-owned, though its ownership structure is unknown. Based in the southern Chinese tech hub of Shenzhen, it employs about 180 000 people.
Huawei was a pioneering supplier of telecom gear at a time when China was spending heavily to upgrade its networks, importing much of its equipment. Huawei began competing internationally in the 1990s and was known for undercutting rivals.
Competitors branded Huawei a cutrate vendor of copycat equipment, and companies, including Cisco Systems and Motorola, filed lawsuits over alleged trade secret theft.
But Huawei spent heavily on research and development and is now regarded as a global leader in key telecom network technologies and high-end smartphones. In contrast, its major Western rivals, Nokia and Ericsson, have struggled financially.
Huawei today continues to expand into new areas, including chip development, artificial intelligence and cloud computing.
US intelligence agencies allege that Huawei is linked to China’s government and that its equipment could contain “backdoors” for use by spies, but no evidence has been produced publicly and the firm has repeatedly denied the claims.
Nonethesless, suspicions persist. argued that the decision would give developers the incentive to build fun things for Facebook users to do and in turn compel people to share more information back to Facebook through the developer’s app.
“If we do this well, we should be able to unlock much more sharing in the world and on Facebook through a constellation of apps than we could ever build experiences for ourselves,” Zuckerberg wrote.
This was an astute and nuanced tactical argument – not a man who preferred to leave the messy details of Facebook’s business to lieutenants.
And Zuckerberg was right. The approach with app developers helped build a young, still-unsteady Facebook into an essential piece of the internet. The decision to grant fairly wide latitude for developers to tap information about Facebook users also led to the scandal that erupted this year about Facebook and Cambridge Analytica. It was a smart decision and a seed of one of Facebook’s endemic problems. But either way, it was a clear-eyed Zuckerberg who called the shots.
Lanxon and Frier also write about the eye-catching example of Zuckerberg the savvy businessman from 2013, when he replied, “Yup, go for it,” to a request to block Twitter Inc’s Vine from pulling people’s Facebook friends into the new app for short web video clips. The decision was a serious speed Concern now centres on the deployment of fifth-generation (5G) mobile networks, where Huawei is at the cutting edge. A new law in China requiring any domestic firm to assist the government when asked has also stoked concern.
The US government has taken a series of steps to block the firm from US markets, including banning government purchases of Huawei gear and denying government help to any carrier that uses Huawei equipment. Top carriers Verizon Communications and AT&T pulled out of deals to distribute Huawei smartphones earlier this year.
Most countries, even close US allies such as Canada, Britain and Germany, have not made any moves against Huawei, arguing they have sufficient procedures to test equipment for security. But Australia and New Zealand recently banned Huawei from building 5G networks, and there are indications that other countries including Germany are revisiting the issue.
US authorities have not disclosed circumstances surrounding Meng’s arrest, but a person familiar with the matter said the arrest related to violations of US trade sanctions.
Earlier this year, the US Commerce Department said ZTE, Huawei’s smaller rival, had violated the settlement and bump for Vine and Twitter, which at the time was seen as a significant threat to Facebook. (Vine’s co-founder had some thoughts about this.)
Again, Facebook’s Vine block was previously reported. And there have been many other reported episodes of Facebook’s willingness to copy potentially threatening technologies or impede rivals by using the social network’s power.
But seeing strategies like these discussed in internal emails is much more powerful and sheds light on Zuckerberg’s role in Facebook’s ruthlessness. One document said he personally approved a short list of rival companies that were subject to tighter restrictions on Facebook activity.
For some people, these insights might make them trust Zuckerberg less, and that’s a fair perspective. To me, the documents simply make Zuckerberg less of a two-dimensional cartoon character. Let this forever kill the simplistic impression of Zuckerberg as a technical wizard who – as he’s repeated many times – created Facebook in his college dorm room, and perhaps didn’t understand how big Facebook would become nor focus on what information it collected or how the company would profit from it.
People are complex. And we just got a valuable look at the full complexion of Zuckerberg as an executive. barred it from buying any US components – a move that all but halted many ZTE operations.
A new settlement was reached and the ban lifted at the behest of US President Donald Trump, a perceived concession to Chinese President Xi Jinping that surprised and angered others in the US government.
The sanctions investigations long preceded the trade war.
The timing of the arrest tangles the issues as it came just as Trump and Xi reached a temporary trade war truce.
Financial markets turned negative on news of the arrest on fears it could scupper the truce. However, there is no evidence of it being a deliberate provocation by the US rather than just an awkward coincidence.
A ban on US component purchases, such as the one temporarily imposed on ZTE, would be devastating, but there is no reason to suggest that will happen. If the case prompts major European countries to turn against the firm, that would have a long-term impact on its growth and influence.
Still, Huawei’s status as a kingpin of China’s high-tech industry, at a time when the country is racing to catch up with the US means it will almost certainly remain a powerful force for years to come. |