Facebook CEO Mark Zuckerberg published a blog post yesterday on a “privacy-focused” vision for social networking that struck me as the equivalent of ExxonMobil proclaiming the end of fossil fuels. Those who have followed Facebook for the last fifteen years know its founder, until recently, has summarily dismissed privacy critics, and believed deep in his soul that the world would eventually bend to his vision of open sharing. In yesterday’s post, however, he did a complete about-face. “I believe the future of communication will increasingly shift to private, encrypted services where people can be confident what they say to each other stays secure.”
Really? As my friend and long-time tech guru Walt Mossberg tweeted from retirement: “How long has he personally believed this? An hour? A day?”
It’s possible, of course, the scandals of the last year have prompted Zuckerberg to do some serious soul searching. Or perhaps the growing tech backlash has convinced him more privacy regulation is coming, whether he likes it or not. But if he means what he says, the company has a problem. Its current advertising business model depends on open sharing of information. Take Zuckerberg at his word, and that business is headed for massive disruption, with implications that The Verge outlines here.
More likely, Zuckerberg “is trying to have his cake and eat it too,” as my colleague and Fortune tech editor Adam Lashinsky has put it. He wants to build up his business around encrypted communications on What’sApp, Facebook Messenger and Instagram, even as he continues to mint money from the lucrative advertising business built around the open Facebook News Feed.
Financial markets seemed to share Adam’s view: Facebook’s stock was down only slightly in after-hours trading.
More news below.
Huawei has launched its lawsuit against the U.S. government for banning federal use of the company’s equipment, claiming the move is unconstitutional. It’s also launched a massive ad campaign to try to get the public on its side. “We are left with no choice but to challenge the law in court,” said rotating chairman Guo Ping. The court in question is in Plano, Texas. Guardian
Amazon, Berkshire Hathaway and JPMorgan’s new health care venture now has a name: Haven. The moniker “reflects our goal to be a partner to individuals and families and help them get the care they need, while also working with clinicians and others to make the overall system better for all,” the outfit claims. Bloomberg
The U.S. merchandise trade deficit hit a record $891 billion last year, despite President Trump’s stated aim of reducing it. Indeed, the U.S.’s trade deficit with chief sparring partner China hit a record $419 billion. Fortune
China’s economy is smaller than the country is claiming, according to new research by the Washington-based Brookings Institution. The think tank says the Chinese economy is as much as 12 percentage points smaller than thought, largely because targets incentivize local governments to overstate growth and investment. Financial Times
Around the Water Cooler
In what may potentially spell more bad news for Monsanto owner Bayer, the European Court of Justice has ruled that EU food safety regulators cannot keep secret the details of studies into the toxicity and possible cancer risks of glyphosate, the active ingredient in the Roundup weedkiller and (now that it’s off-patent) other herbicides as well. Reuters
Russia’s parliament has green-lit an “anti-fake-news” law that allows authorities to jail or fine people who disrespect the government online. This is the latest example of many clampdowns on Internet freedom in Russia. CNN
Michael Cohen’s lawyer has admitted that, at Cohen’s direction, he last year asked President Trump about the possibility of a presidential pardon. Cohen, a former Trump lawyer who has been testifying about Trump’s alleged misdeeds, claimed to the House Oversight Committee last week that he had “never asked for, nor would I accept, a pardon from Mr. Trump.” Wall Street Journal
In the U.S., antitrust moves against Amazon are somewhat tainted by President Trump’s antipathy toward Jeff Bezos, but the U.S. isn’t the only place where Amazon is raising competition concerns. A piece in Politico Europe explains the case against the company in relation to how it handles small businesses, allegedly setting itself up as a competitor to them after studying their activities on its platform. Politico