RUTH­LESS THAN CLUE­LESS

Sunday Tribune - - TECHNOLOGY - SHIRA OVIDE So­cial Net­work, JONATHAN WE­BER | Bloomberg

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. |

AN AC­TIVIST wear­ing a mask de­pict­ing Face­book’s chief ex­ec­u­tive Mark Zucker­berg demon­strates dur­ing the EU fi­nance min­is­ters’ meet­ing, out­side the EU head­quar­ters in Brus­sels, Bel­gium, last week. |

MENG Wanzhou, Huawei Tech­nolo­gies Co Ltd’s chief fi­nan­cial of­fi­cer

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