Facebook Says Will End Old Data Sharing Deal With Huawei

Facebook said that among 60 companies that could access some of its users' data were several Chinese device makers, including Huawei, which Washington has long scrutinized on national security grounds.

Anna Vodopyanova
    Jun 06, 2018 6:04 PM  PT
Facebook Says Will End Old Data Sharing Deal With Huawei
author: Anna Vodopyanova   

Criticism of the world's most popular social media site ensued with new strength after Facebook Inc. (Nasdaq: FB) admitted that it has been sharing user data for years with at least four Chinese companies, including Huawei Technologies Co. Ltd., the world's third-largest smartphone maker that has been closely watched by Washington.

The scope of data sharing, revealed over the weekend by The New York Times, was not disclosed by Facebook's chief executive Mark Zuckerberg when he appeared before Congress in April after a political consulting firm, Cambridge Analytica, misused the private information of tens of millions of Facebook users.

The Republican chairman of the U.S. House Energy and Commerce Committee, Greg Walden, and ranking Democrat Frank Pall said in a joint statement on Wednesday: "Clearly, the company's partnerships with Chinese technology companies and others should have been disclosed before Congress and the American people."

The Times said Facebook allowed access to the data of users' friends without their explicit consent. "Some device makers could retrieve personal information even from users' friends who believed they had barred any sharing," The Times said. Facebook denied that, saying the data access was intended to help phone makers design their systems to make the platform more accessible for users.

On Tuesday, Facebook said that Huawei, as well as the computer maker Lenovo Group and smartphone makers OPPO and TCL Corp., were among about 60 companies that could access some user data after partnering with the company to recreate the Facebook experience for their users.

The Federal Trade Commission, which settled with Facebook in 2011 over its information-sharing practices, declined comment on these most recent allegations.

That said, the agency acknowledged in March that it had opened an investigation into whether Facebook had failed to live up to the settlement, which had been prompted by allegations the social network deceived users by telling them they could keep their information private but then shared it.

Huawei Under Long-Time Scrutiny by Washington

U.S. government officials have long urged American companies to stop doing business with Huawei. U.S. security concerns with Huawei technology date as far back as 2008, when the government blocked the sale of 3Com Corp., an American digital electronics firm, to the Chinese device maker on grounds of national security and industrial espionage.

In 2011, Washington turned down Huawei's bid to build a wireless network for first responders, such as police and firefighters, according to a The Daily Beast article.

A report released by the Pentagon the following year showed that its investigations into Huawei found that the company's top leadership had connections to the Chinese government.

The list of allegations began with the founder and long-time former chief executive officer of Huawei, who remains its director, Zhengfei Ren. The report said that four years before Ren founded Huawei, he retired from a lead position at the Information Engineering Academy of the People's Liberation Army.

In addition, the U.S. intelligence report said that Yafang Sun, who held several lead roles at Huawei from 1999 to 2018, worked for China's Ministry of State Security Communications Department and helped the company through its first years of financial troubles. This claim was previously reported by a Chinese publication, Xinjing Bao.

Lastly, the report revealed that the Beijing government invested heavily in Huawei's research and development.

During consequent meetings with the House Intelligence Committee, Huawei officials denied that Ren was a senior member of the military, though they did not provide complete information about his military and professional background, according to the report. The company likewise denied that Sun had ties to the government. Instead, the Huawei officials said that the five initial investors in the company, one of which has been affiliated with the Chinese government, never actually worked for Huawei and withdrew their investments several years later.

Fear of espionage and Huawei's possible connections to the Chinese government have continued, however. In February, pressure from Washington caused telecoms AT&T and Verizon to back out of an arrangement to sell the Mate 10 Pro, a water-resistant, dual-camera android phone that Huawei launched in November.

In May, the House of Representatives passed a bill that gave government agencies and federal grant recipients until 2021 to cut all ties with Huawei and telecom equipment maker ZTE Corp., which has been banned from American suppliers.

"For years, U.S. government officials have expressed concern about the national security threats posed by certain foreign communications equipment providers in the communications supply chain," the chairman of the Federal Communications Commission, Ajit Pai, said about the ban. "Hidden ‘backdoors' to our networks in routers, switches, and other network equipment can allow hostile foreign powers to inject viruses and other malware, steal Americans' private data, spy on U.S. businesses, and more," he added.

In a 2015 interview with Forbes, Huawei's founder Ren said that protecting intellectual property rights should be any society's goal. However, when asked about his company's principles, he replied: "We don't emphasize independent innovation. What we stress is openness. We must stand on the shoulders of past pioneers to keep up with the times. We also need to inherit and develop what already exists."

Huawei, founded in 1987, remains a private company. According to its official website, the company is fully owned by its Chinese employees, and has no known plans to trade publicly. With more than 180,000 employees, Huawei operates in 170 countries.

Facebook said it would end its deal with Huawei this week. It is also planning to end its partnerships with Lenovo, OPPO, and TCL. More than half of the company's other worldwide partnerships have already been terminated.

(Reuters contributed to this article)