Chinese President Xi Jinping, left, talks with Facebook CEO Mark Zuckerberg, right, during a gathering of CEOs and other executives at Microsoft's main campus September 23, 2015 in Redmond, Washington. Ted S. Warren-Pool/Getty Images
Chinese President Xi Jinping, left, talks with Facebook CEO Mark Zuckerberg, right, during a gathering of CEOs and other executives at Microsoft's main campus September 23, 2015 in Redmond, Washington.

'No Facebook Data Center in China' Is a Convenient Sacrifice

Privacy wasn’t a battle Facebook could win in China. Beating WeChat would also be hard.

Facebook is building its new “privacy-focused platform” around six principles. One of the principles – Mark Zuckerberg laid them out in a blog post Wednesday – is to avoid building data centers in countries with poor human-rights records to prevent authoritarian governments from getting access to people’s private data.

It doesn’t mean Facebook won’t serve people who live in all those countries. It just means it won’t store their data within their governments’ jurisdictions. In some countries, however, it does mean Facebook won’t be available for the foreseeable future.

The elephant in the room here is China, where since 2017 anybody who operates “critical information infrastructure” must store data collected or produced in China on Chinese territory. In other words, if you want to provide any kind of digital services in China, you must use a data center in China to do it, and you cannot move the data outside the country.

China has one of the worst human-rights records, so Zuckerberg’s new data center site selection principle essentially precludes the company from building any critical infrastructure in the country. It’s not the only country that has both a data localization law and a poor human-rights record. It is, however, the biggest potential growth opportunity for a business like Facebook’s, and Facebook has tried hard to take advantage of it.

Because of the country’s tight online censorship rules, Facebook has been blocked in China since 2009. The Menlo Park-based company’s aggressive efforts to get back into the Chinese market, spearheaded by its founder and CEO, have been well documented. Zuckerberg has met with President Xi Jinping (who a year ago ensured he can rule indefinitely), attempted to learn Mandarin, and posted a photo of himself jogging in Tiananmen Square. On the practical front, Facebook built filters that would block certain content from appearing in certain geographies, reportedly with the single aim of getting unblocked in China.

But this week, a senior Facebook official told Buzzfeed on condition of anonymity that the company no longer sees a way to run services in China.

In his blog post, which didn’t mention China directly, Zuckerberg said the new data center principle would be a sacrifice made in the name of privacy:

Upholding this principle may mean that our services will get blocked in some countries, or that we won't be able to enter others anytime soon. That's a tradeoff we're willing to make.

Some have interpreted Zuckerberg’s new pledge about conscientious data center construction as a swipe at competitor Apple, whose CEO Tim Cook has been using every opportunity to draw contrast between Apple, which according to him cares deeply about user privacy, and Facebook, whose reputation around privacy has been sinking continuously ever since the Cambridge Analytica scandal.

Here’s Facebook’s former chief security officer Alex Stamos on Twitter:

Last year Apple moved infrastructure it used to serve people in China into a data center operated by a Chinese company to comply with the new data localization law. By promising that Facebook won’t do such a thing, Zuckerberg now gets to call Apple out “every time Cook is sanctimonious,” Stamos said.

Other American tech giants have also shown willingness to play by China’s rules. Amazon Web Services’ cloud data centers in China are operated by a Chinese company, and so are Microsoft Azure’s and IBM’s.

Until this week, Facebook and Zuckerberg haven’t demonstrated unwillingness to do what it takes to tap into the world’s fastest-growing market. But its new stance on China conveniently fits with the vision for the new privacy-focused platform Zuckerberg said Facebook will build.

The plan is to integrate Facebook, Messenger, Instagram, and WhatsApp in a platform that would use the “Facebook network” but prioritize private messaging over social posting. It would also enable “calls, video chats, groups, stories, businesses, payments, commerce, and ultimately [be] a platform for many other kinds of private services.”

As others have already pointed out, that sounds a lot like WeChat, Tencent’s platform that dominates messaging, payments, and social media in China – all in one mobile app. WeChat does, however, enable government censorship of online speech and doesn’t provide end-to-end encryption, which is another one of the six core principles Zuckerberg laid out Wednesday.

The new product direction Facebook is taking combined with extremely tough regulations for foreign businesses and a local player that already dominates the market may explain why Zuckerberg and other senior Facebook managers now feel that the company can afford to give up on China.

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