U.S. CTO Presses Vestager on Huawei While Urging Regulation Restraint

U.S. CTO Presses Vestager on Huawei While Urging Regulation Restraint

(Bloomberg) -- U.S. Chief Technology Officer Michael Kratsios criticized China’s approach to technology issues in a speech in Lisbon Thursday, while also asking allies to join the U.S. in “taking a stand” against Chinese encroachments into areas such as 5G infrastructure and artificial intelligence software, according to his prepared remarks. He conveyed a similar message to Margrethe Vestager, Europe’s newly nominated digital chief, in a face-to-face meeting earlier in the day.

Kratsios accused Huawei Technologies Co. of epitomizing Beijing’s “authoritarianism” at the Web Summit conference. Huawei has denied that it has ties to the Chinese government, but Kratsios pointed out that the company, by law, must cooperate with Beijing. He cited reports that China hacked computers in the African Union headquarters in Addis Ababa, Ethiopia after Huawei equipment was installed, downloading data nightly for five years. In a statement, a Huawei spokesman called the accusations “hypocritical and manifestly false.”

Kratsios also met with Vestager, the EU antitrust chief, who was speaking at the conference. It was Vestager’s first meeting with a U.S. official since she was nominated to an expanded role as the European Commission vice president in charge of tech policy. Kratsios’s speech was his first outside the U.S. since he became CTO in August.

“Huawei is just one piece of the conversation,” Kratsios said in an interview on Tuesday. “The larger issue we want to communicate to the Europeans is that the future of tech depends on Western democracies to lead on next-generation technology discovery.” His speech warned that China has “built an advanced authoritarian state by twisting technology to put censorship over free expression and citizen control over empowerment.”

In the interview, Kratsios warned that if the EU regulates big tech companies too aggressively, it could empower Chinese competitors with a greater willingness to censor users and turn over data to foreign governments. “There is an adversary developing tech with a set of norms and s dramatically in conflict with the U.S. and its allies’ view of the world,” he said.

The argument is similar to one made by Mark Zuckerberg, who gave a speech last month accusing TikTok, the fast-growing social media app owned by Beijing-based ByteDance, of censoring mentions of protests. Zuckerberg described the censorship as part of a Chinese effort to export “their vision of the internet to other countries.” The Committee on Foreign Investment in the U.S. recently began a review of ByteDance’s 2017 acquisition of Musical.ly, the U.S. social network, which it merged with TikTok.  

Kratsios declined to comment on TikTok, saying his critique was broader than any one company. He compared China’s efforts to integrate its technology into the global tech infrastructure to the way it embedded itself into the global economy by joining the World Trade Organization in 2001. China’s entrance into the WTO led to an increase in intellectual property theft, Kratsios said. His message to Vestager and European tech executives and policymakers: “We cannot make the same mistake again.”

©2019 Bloomberg L.P.

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