Facebook Faces a New World as Officials Rein In a Wild Web - Has begun fragmenting the internet itself
Facebook Faces a New World as Officials Rein In a Wild
Web
How Facebook Is Changing Your Internet
Behind the scenes, Facebook is involved in high-stakes
diplomatic battles across the globe that have begun fragmenting the internet
itself.
By PAUL MOZUR, MARK SCOTT and MIKE ISAAC SEPT. 17, 2017
On a muggy, late spring evening, Tuan Pham awoke to the
police storming his house in Hanoi, Vietnam.
They marched him to a police station and made their
demand: Hand over your Facebook password. Mr. Tuan, a computer engineer, had
recently written a poem on the social network called “Mother’s Lullaby,” which
criticized how the communist country was run.
One line read, “One century has passed, we are still poor
and hungry, do you ask why?”
Mr. Tuan’s arrest came just weeks after Facebook offered
a major olive branch to Vietnam’s government. Facebook’s head of global policy
management, Monika Bickert, met with a top Vietnamese official in April and
pledged to remove information from the social network that violated the
country’s laws.
While Facebook said its policies in Vietnam have not
changed, and it has a consistent process for governments to report illegal
content, the Vietnamese government was specific. The social network, they have
said, had agreed to help create a new communications channel with the government
to prioritize Hanoi’s requests and remove what the regime considered inaccurate
posts about senior leaders.
Populous, developing countries like Vietnam are where the
company is looking to add its next billion customers — and to bolster its ad
business. Facebook’s promise to Vietnam helped the social media giant placate a
government that had called on local companies not to advertise on foreign sites
like Facebook, and it remains a major marketing channel for businesses there.
The diplomatic game that unfolded in Vietnam has become
increasingly common for Facebook. The internet is Balkanizing, and the world’s
largest tech companies have had to dispatch envoys to, in effect, contain the
damage such divisions pose to their ambitions.
The internet has long had a reputation of being an
anything-goes place that only a few nations have tried to tame — China in
particular. But in recent years, events as varied as the Arab Spring, elections
in France and confusion in Indonesia over the religion of the country’s
president have awakened governments to how they have lost some control over
online speech, commerce and politics on their home turf.
Even in the United States, tech giants are facing
heightened scrutiny from the government. Facebook recently cooperated with
investigators for Robert S. Mueller III, the special counsel investigating
Russian interference in the American presidential election. In recent weeks,
politicians on the left and the right have also spoken out about the excess
power of America’s largest tech companies.
As nations try to grab back power online, a clash is
brewing between governments and companies. Some of the biggest companies in the
world — Google, Apple, Facebook, Amazon and Alibaba among them — are finding they
need to play by an entirely new set of rules on the once-anarchic internet.
And it’s not just one new set of rules. According to a
review by The New York Times, more than 50 countries have passed laws over the
last five years to gain greater control over how their people use the web.
“Ultimately, it’s a
grand power struggle,” said David Reed, an early pioneer of the internet and a
former professor at the M.I.T. Media Lab. “Governments started waking up as
soon as a significant part of their powers of communication of any sort started
being invaded by companies.”
Facebook encapsulates the reasons for the internet’s
fragmentation — and increasingly, its consequences.
The company has become so far-reaching that more than two
billion people — about a quarter of the world’s population — now use Facebook each
month. Internet users (excluding China) spend one in five minutes online within
the Facebook universe, according to comScore, a research firm. And Mark
Zuckerberg, Facebook’s chief executive, wants that dominance to grow.
But politicians have struck back. China, which blocked
Facebook in 2009, has resisted Mr. Zuckerberg’s efforts to get the social
network back into the country. In Europe, officials have repudiated Facebook’s
attempts to gather data from its messaging apps and third-party websites.
The Silicon Valley giant’s tussle with the fracturing
internet is poised to escalate. Facebook has now reached almost everyone who
already has some form of internet access, excluding China. Capturing those last
users — including in Asian nations like Vietnam and African countries like
Kenya — may involve more government roadblocks.
“We understand that
and accept that our ideals are not everyone’s,” said Elliot Schrage, Facebook’s
vice president of communications and public policy. “But when you look at the
data and truly listen to the people around the world who rely on our service,
it’s clear that we do a much better job of bringing people together than
polarizing them.”
Friending China
By mid-2016, a years long campaign by Facebook to get
into China — the world’s biggest internet market — appeared to be sputtering.
Mr. Zuckerberg had wined and dined Chinese politicians,
publicly showed off his newly acquired Chinese-language skills — a moment that
set the internet abuzz — and talked with a potential Chinese partner about
pushing the social network into the market, according to a person familiar with
the talks who declined to be named because the discussions were confidential.
At a White House dinner in 2015, Mr. Zuckerberg had even
asked the Chinese president, Xi Jinping, whether Mr. Xi might offer a Chinese
name for his soon-to-be-born first child — usually a privilege reserved for
older relatives, or sometimes a fortune teller. Mr. Xi declined, according to a
person briefed on the matter.
But all those efforts flopped, foiling Facebook’s
attempts to crack one of the most isolated pockets of the internet.
China has blocked Facebook and Twitter since mid-2009,
after an outbreak of ethnic rioting in the western part of the country. In
recent years, similar barriers have gone up for Google services and other apps,
like Line and Instagram.
Even if Facebook found a way to enter China now, it would
not guarantee financial success. Today, the overwhelming majority of Chinese
citizens use local online services like Qihoo 360 and Sina Weibo. No
American-made apps rank among China’s 50 most popular services, according to
SAMPi, a market research firm.
Chinese tech officials said that although many in the
government are open to the idea of Facebook releasing products in China, there
is resistance among leaders in the standing committee of the country’s
Politburo, its top decision-making body.
In 2016, Facebook took tentative steps toward embracing
China’s censorship policies. That summer, Facebook developed a tool that could
suppress posts in certain geographic areas, The Times reported last year. The
idea was that it would help the company get into China by enabling Facebook or
a local partner to censor content according to Beijing’s demands. The tool was
not deployed.
In another push last year, Mr. Zuckerberg spent time at a
conference in Beijing that is a standard on the China government relations
tour. Using his characteristic brand of diplomacy — the Facebook status update
— he posted a photo of himself running in Tiananmen Square on a dangerously
smoggy day. The photo drew derision on Twitter, and concerns from Chinese about
Mr. Zuckerberg’s health.
For all the courtship, things never quite worked out.
“There’s an interest on
both sides of the dance, so some kind of product can be introduced,” said
Kai-Fu Lee, the former head of Google in China who now runs a venture-capital
firm in Beijing. “But what Facebook wants is impossible, and what they can have
may not be very meaningful.”
This spring, Facebook tried a different tactic: testing
the waters in China without telling anyone. The company authorized the release
of a photo-sharing app there that does not bear its name, and experimented by
linking it to a Chinese social network called WeChat.
One factor driving Mr. Zuckerberg may be the brisk ad
business that Facebook does from its Hong Kong offices, where the company helps
Chinese companies — and the government’s own propaganda organs — spread their
messages. In fact, the scale of the Chinese government’s use of Facebook to
communicate abroad offers a notable sign of Beijing’s understanding of
Facebook’s power to mold public opinion.
Chinese state media outlets have used ad buys to spread
propaganda around key diplomatic events. Its stodgy state-run television
station and the party mouthpiece newspaper each have far more Facebook “likes”
than popular Western news brands like CNN and Fox News, a likely indication of
big ad buys.
To attract more ad spending, Facebook set up one page to
show China’s state broadcaster, CCTV, how to promote on the platform, according
to a person familiar with the matter. Dedicated to Mr. Xi’s international
trips, the page is still regularly updated by CCTV, and has 2.7 million likes.
During the 2015 trip when Mr. Xi met Mr. Zuckerberg, CCTV used the channel to
spread positive stories. One post was titled “Xi’s UN address wins warm
applause.”
Fittingly, Mr. Zuckerberg’s eagerness and China’s reluctance
can be tracked on Facebook.
During Mr. Xi’s 2015 trip to America, Mr. Zuckerberg
posted about how the visit offered him his first chance to speak a foreign
language with a world leader. The post got more than a half million likes,
including from Chinese state media (despite the national ban). But on Mr. Xi’s
propaganda page, Mr. Zuckerberg got only one mention — in a list of the many
tech executives who met the Chinese president.
Europe’s Privacy Pushback
Last summer, emails winged back and forth between members
of Facebook’s global policy team. They were finalizing plans, more than two
years in the making, for WhatsApp, the messaging app Facebook had bought in
2014, to start sharing data on its one billion users with its new parent
company. The company planned to use the data to tailor ads on Facebook’s other
services and to stop spam on WhatsApp.
A big issue: how to win over wary regulators around the
world.
Despite all that planning, Facebook was hit by a major
backlash. A month after the new data-sharing deal started in August 2016,
German privacy officials ordered WhatsApp to stop passing data on its 36
million local users to Facebook, claiming people did not have enough say over
how it would be used. The British privacy watchdog soon followed.
By late October, all 28 of Europe’s national
data-protection authorities jointly called on Facebook to stop the practice.
Facebook quietly mothballed its plans in Europe. It has continued to collect
people’s information elsewhere, including the United States.
“There’s a growing
awareness that people’s data is controlled by large American actors,” said
Isabelle Falque-Pierrotin, France’s privacy regulator. “These actors now know
that times have changed.”
Facebook’s retreat shows how Europe is effectively
employing regulations — including tough privacy rules — to control how parts of
the internet are run.
The goal of European regulators, officials said, is to
give users greater control over the data from social media posts, online
searches and purchases that Facebook and other tech giants rely on to monitor
our online habits.
As a tech company whose ad business requires harvesting
digital information, Facebook has often underestimated the deep emotions that
European officials and citizens have tied into the collection of such details.
That dates back to the time of the Cold War, when many Europeans were routinely
monitored by secret police.
Now, regulators from Colombia to Japan are often
mimicking Europe’s stance on digital privacy. “It’s only natural European
regulators would be at the forefront,” said Brad Smith, Microsoft’s president
and chief legal officer. “It reflects the importance they’ve attached to the
privacy agenda.”
In interviews, Facebook denied it has played fast and
loose with users’ online information and said it complies with national rules
wherever it operates. It questioned whether Europe’s position has been
effective in protecting individuals’ privacy at a time when the region
continues to fall behind the United States and China in all things digital.
Still, the company said it respected Europe’s stance on
data protection, particularly in Germany, where many citizens have long
memories of government surveillance.
“There’s no doubt the
German government is a strong voice inside the European community,” said
Richard Allan, Facebook’s head of public policy in Europe. “We find their
directness pretty helpful.”
Europe has the law on its side when dictating global
privacy. Facebook’s non-North American users, roughly 1.8 billion people, are
primarily overseen by Ireland’s privacy regulator because the company’s
international headquarters is in Dublin, mostly for tax reasons. In 2012,
Facebook was forced to alter its global privacy settings — including those in
the United States — after Ireland’s data protection watchdog found problems
while auditing the company’s operations there.
Three years later, Europe’s highest court also threw out
a 15-year-old data-sharing agreement between the region and the United States
following a complaint that Facebook had not sufficiently protected Europeans’
data when it was transferred across the Atlantic. The company denies any wrongdoing.
And on Sept. 12, Spain’s privacy agency fined the company
1.2 million euros for not giving people sufficient control over their data when
Facebook collected it from third-party websites. Watchdogs in Germany, the
Netherlands and elsewhere are conducting similar investigations. Facebook is
appealing the Spanish ruling.
“Facebook simply can’t
stick to a one-size-fits-all product around the world,” said Max Schrems, an
Austrian lawyer who has been a Facebook critic after filing the case that
eventually overturned the 15-year-old data deal.
Potentially more worrying for Facebook is how Europe’s
view of privacy is being exported. Countries from Brazil to Malaysia, which are
crucial to Facebook’s growth, have incorporated many of Europe’s tough privacy
rules into their legislation.
“We regard the
European directives as best practice,” said Pansy Tlakula, chairwoman of South
Africa’s Information Regulator, the country’s data protection agency. South
Africa has gone so far as to copy whole sections, almost word-for-word, from
Europe’s rule book.
The Play for Kenya
Blocked in China and troubled by regulators in Europe,
Facebook is trying to become “the internet” in Africa. Helping get people
online, subsidizing access, and trying to launch satellites to beam the
internet down to the markets it covets, Facebook has become a dominant force on
a continent rapidly getting online.
But that has given it a power that has made some in
Africa uncomfortable.
Some countries have blocked access, and outsiders have
complained Facebook could squelch rival online business initiatives. Its
competition with other internet companies from the United States and China has
drawn comparisons to a bygone era of colonialism.
For Kenyans like Phyl Cherop, 33, an entrepreneur in
Nairobi, online life is already dominated by the social network. She abandoned
her bricks-and-mortar store in a middle-class part of the city in 2015 to sell
on Facebook and WhatsApp.
“I gave it up because
people just didn’t come anymore,” said Ms. Cherop, who sells items like
designer dresses and school textbooks. She added that a stand-alone website
would not have the same reach. “I prefer using Facebook because that’s where my
customers are. The first thing people want to do when they buy a smartphone is
to open a Facebook account.”
As Facebook hunts for more users, the company’s
aspirations have shifted to emerging economies where people like Ms. Cherop
live. Less than 50 percent of Africa’s population has internet connectivity,
and regulation is often rudimentary.
Since Facebook entered Africa about a decade ago, it has
become the region’s dominant tech platform. Some 170 million people — more than
two thirds of all internet users from South Africa to Senegal — use it,
according Facebook’s statistics. That is up 40 percent since 2015.
The company has struck partnerships with local carriers
to offer basic internet services — centered on those offered by Facebook — for
free. It has built a pared-down version of its social network to run on the
cheaper, less powerful phones that are prevalent there.
Facebook is also investing tens of millions of dollars
alongside telecom operators to build a 500-mile fiber-optic internet connection
in rural Uganda. In total, it is working with about 30 regional governments on
digital projects.
“We want to bring
connectivity to the world,” said Jay Parikh, a Facebook vice president for
engineering who oversees the company’s plans to use drones, satellites and
other technology to connect the developing world.
Facebook is racing to gain the advantage in Africa over
rivals like Google and Chinese players including Tencent, in a 21st century
version of the “Scramble for Africa.” Google has built fiber internet networks
in Uganda and Ghana. Tencent has released WeChat, its popular messaging and
e-commerce app, in South Africa.
Facebook has already hit some bumps in its African push.
Chad blocked access to Facebook and other sites during elections or political
protests. Uganda also took legal action in Irish courts to force the social
network to name an anonymous blogger who had been critical of the government.
Those efforts failed.
In Kenya, one of Africa’s most connected countries, there
has been less pushback.
Facebook expanded its efforts in the country of 48
million in 2014. It teamed up with Airtel Africa, a mobile operator, to roll
out Facebook’s Free Basics — a no-fee version of the social network, with
access to certain news, health, job and other services there and in more than
20 other countries worldwide. In Kenya, the average person has a budget of just
30 cents a day to spend on internet access.
Free Basics now lets Kenyans use Facebook and its
Messenger service at no cost, as well as read news from a Kenyan newspaper and
view information about public health programs. Joe Mucheru, Kenya’s tech
minister, said it at least gives his countrymen a degree of internet access.
Paul Mozur reported from Hong Kong, Mark Scott from
Nairobi, and Mike Isaac from San Francisco.
A version of this article appears in print on September
18, 2017, on Page A1 of the New York edition with the headline: Facebook Is
Navigating a Global Power Struggle.
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