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US regulators should block such a sale. No Chinese firm should be permitted to own a controlling interest in any communication system widely used in the US. Ch

by Canada 9y ago

US regulators should block such a sale. No Chinese firm should be permitted to own a controlling interest in any communication system widely used in the US. China doesn't allow US companies to do so in China, so why should Chinese companies be permitted?

jonknee 9y ago
> China doesn't allow US companies to do so in China, so why should Chinese companies be permitted? China doesn't allow a lot of things, that's a pretty weak argument.
- notyourday 9y ago
  It's a fantastic argument. If China wants 'special rules' it shall have 'special rules'.
  - jonknee 9y ago
    The US can't easily go tit for tat with China because we have a much more free market system. It would be unfair to US investors if we all of a sudden started banning foreign investment.
    - rdxm 9y ago
      It's long past time to start ratcheting down on Chinese access to our markets. Until such time as they open thiers in a meaningful way. Without the essentially unfettered, one way street access to US markets it enjoys today, China looks a lot less economically sound.
    - notyourday 9y ago
      Of course it can. It just does not want to.
      - jonknee 9y ago
        Unlike China, the US needs a legal reason for this sort of decision, not just the whim of whoever is in charge. What's the legal basis for denying Snapchat to be bought by a Chinese founded firm? It's not a state owned enterprise which is the reason for most previous buyout denials.
        Canada 9y ago
        I'm not aware of any legal basis for blocking the sale. I just don't like the idea of China, a country that runs a brutal censorship and surveillance regime, to have any control over communication or publishing tools used by the rest of us. Even if it's only a frivolous one like SnapChat.
        deleted 9y ago
        [deleted]
        notyourday 9y ago
        Classify it as a critical infrastructure. Done.
        Chaebixi 9y ago
        > Unlike China, the US needs a legal reason for this sort of decision, not just the whim of whoever is in charge. Non-reciprocal trade/investment policy that disadvantages US companies, that's the legal reason right there. I understand a lot of trade policy is driven by similar kinds of things (e.g. reciprocally drop your tariffs and we'll drop ours).
fspeech 9y ago
Yahoo owned (before the spin off) a much larger stake in Alibaba both on a relative and an absolute basis than Tencent in Snapchat. And Alibaba is a much larger business with a dominant position. Baidu, Alibaba and Tencent are all largely owned by foreign investors, even though they are operated by Chinese personnel.
- seanmcdirmid 9y ago
  That is because they are traded on foreign exchanges. Though ownership doesn’t really convey much control in this sense given the voting rights public share classes (mostly to conform with Chinese laws). They are still chinese companies even if they have foreign share holders.
- polskibus 9y ago
  Can you elaborate on the ownership structure of Baidu, Alibaba and Tencent?
  - fspeech 9y ago
    Baidu and Alibaba are both listed in the U.S. I am not aware of Baidu but Softbank and Yahoo used to own the majority economic stake in Alibaba. Tencent is listed in Hongkong but a large stake is owned by a South African investor.
    - whatok 9y ago
      Both Baidu and Ali Baba are listed in the US in the form of depository receipts. You're not going to see any non-Chinese investor exert any meaningful influence over either of those companies as a result.
  - yerich 9y ago
    Tencent, surprisingly, is 33% owned by the South African company Naspers, as well as 7% other foreign institutional investors. Alibaba is 30% owned by the Japanese Softbank and 15% owned by a US holding company resultant of Yahoo's sale. [2] Baidu is 35%+ held by a hodgepodge of funds and holding companies. [3] [1] http://www.4-traders.com/TENCENT-HOLDINGS-LTD-3045861/company/ http://www.4-traders.com/TENCENT-HOLDINGS-LTD-3045861/compan... [2] http://www.4-traders.com/ALIBABA-GROUP-HOLDING-17916677/company/ http://www.4-traders.com/ALIBABA-GROUP-HOLDING-17916677/comp... [3] http://investors.morningstar.com/ownership/shareholders-major.html?t=BIDU http://investors.morningstar.com/ownership/shareholders-majo...
ztratar 9y ago
You sure do care about US national security a lot for having the username "Canada" :) I think your argument makes some sense, but I don't think the world needs an escalation of isolationism. Isolationism breeds war, and it only escalates significantly when multiple nations take part.
- Canada 9y ago
  We're using these services too, and we can say whatever we like about American politicians or policy. No problem. On WeChat we better watch what we say about the Chinese government or any of the issues it deems sensitive. I don't like isolationism either, but in this case I believe it's justified.
FLUX-YOU 9y ago
Or real estate, for that matter.
SurrealSoul 9y ago
How far would this extend to? For example Tencent owns League of Legends, a widely used video game in the US (or even, globally) with a communication tool? What if WeChat just suddenly gets popular in the US? What should the US do in that situation?
- komali2 9y ago
  WeChat is enormously popular in the US. Every Chinese person here uses it. That means a huge number of US students and employees. I think the US should pass and aggressively enforce anti-snooping laws. No company allowed to monitor communication of customers over whatever platform that company is selling (unless the product requires it or that IS the service - some sort of Mood Analysis API or whatever). Would also conveniently take care of a key net neutrality point :)
  - mi_lk 9y ago
    As popular as Chinese community in the US. I still don't know of anyone who doesn't speak Chinese use WeChat.
    - komali2 9y ago
      But that's still a lot of Americans, regardless of the language they speak.
  - seanmcdirmid 9y ago
    My wife uses it also, just no one outside of the Chinese sphere of influence does. It also has no functions outside of china beyond chat, you can’t even use it to buy things at merchants who accept it (mostly spots where Chinese tourists go) unless it’s connected to a chinese bank account (so not for daily usage).
  - dionian 9y ago
    yeah, part of the reason is so popular its one of the few platforms not banned in PR China because the state maintains full control over censorship...
matte_black 9y ago
Why block an opportunity for a country to better understand our culture through the monitoring of our social media communications?
kuschku 9y ago
> No Chinese firm should be permitted to own a controlling interest in any communication system widely used in the US. That can backfire very quickly, when Europe is going to say the same – no US firm should be permitted to control any system widely used in the EU. Which would kill Google, Microsoft, and many more.
- hobofan 9y ago
  (Playing devils advocate to some degree:) And maybe European states should. The USA and China (maybe Russia to some degree too) are the only states that have control over the main tech players whose products are used by their population. If there ever were to be a war-like scenario again with internet embargos for Europe, the internet would be a very empty space, smartphones would degrade to next to useless bricks and businesses that switched to the cloud would lose their IT backbone.
- Chaebixi 9y ago
  >> No Chinese firm should be permitted to own a controlling interest in any communication system widely used in the US. > That can backfire very quickly, when Europe is going to say the same – no US firm should be permitted to control any system widely used in the EU. China is a somewhat special case, though. It's an explicitly authoritarian oligarchy that have a proclivity for censorship and control. They should get more scrutiny from other liberal regimes than the US. Though, if Europe wanted to disadvantage US communication products, I think they'd have a more than enough justification by citing NSA mass surveillance.
guelo 9y ago
I would fully support this. And would extend it to News Corp which is Australian-owned and owns a huge chunk of our media including Fox News and the Wall Street Journal and is a much more insidious influence on our politics than Russia could hope ever hope to be. The first amendment only applies to Americans.
- SamReidHughes 9y ago
  Murdoch is an American.
  - guelo 9y ago
    Oh. Murdoch "became a naturalized U.S. citizen (and as a result, gave up Australian citizenship) in 1985 to satisfy the legal requirement for U.S. television ownership"
- dragonwriter 9y ago
  > The first amendment only applies to Americans. No, the first amendment (like the bill of rights generally) applies to the actions of the US government; it does not apply only when those actions effect US citizens.
seanmcdirmid 9y ago
I’m not sure how an app mainly used by millennials for very social purposes is going to be a security problem. Tencent acquiring it would not be a problem. The USA is not China, it is a much more open market that has no qualms about “taking your money.” Ya, we aren’t going to sell them anything that gives them tech they don’t have already (high end fabbing or jet turbine production), but snap is much more of a business idea than a technology.

by Canada 9y ago

jonknee 9y ago

> China doesn't allow US companies to do so in China, so why should Chinese companies be permitted? China doesn't allow a lot of things, that's a pretty weak argument.

notyourday 9y ago
It's a fantastic argument. If China wants 'special rules' it shall have 'special rules'.
- jonknee 9y ago
  The US can't easily go tit for tat with China because we have a much more free market system. It would be unfair to US investors if we all of a sudden started banning foreign investment.
  - rdxm 9y ago
    It's long past time to start ratcheting down on Chinese access to our markets. Until such time as they open thiers in a meaningful way. Without the essentially unfettered, one way street access to US markets it enjoys today, China looks a lot less economically sound.
  - notyourday 9y ago
    Of course it can. It just does not want to.
    - jonknee 9y ago
      Unlike China, the US needs a legal reason for this sort of decision, not just the whim of whoever is in charge. What's the legal basis for denying Snapchat to be bought by a Chinese founded firm? It's not a state owned enterprise which is the reason for most previous buyout denials.
      - Canada 9y ago
        I'm not aware of any legal basis for blocking the sale. I just don't like the idea of China, a country that runs a brutal censorship and surveillance regime, to have any control over communication or publishing tools used by the rest of us. Even if it's only a frivolous one like SnapChat.
        deleted 9y ago
        [deleted]
      - notyourday 9y ago
        Classify it as a critical infrastructure. Done.
      - Chaebixi 9y ago
        > Unlike China, the US needs a legal reason for this sort of decision, not just the whim of whoever is in charge. Non-reciprocal trade/investment policy that disadvantages US companies, that's the legal reason right there. I understand a lot of trade policy is driven by similar kinds of things (e.g. reciprocally drop your tariffs and we'll drop ours).

fspeech 9y ago

Yahoo owned (before the spin off) a much larger stake in Alibaba both on a relative and an absolute basis than Tencent in Snapchat. And Alibaba is a much larger business with a dominant position. Baidu, Alibaba and Tencent are all largely owned by foreign investors, even though they are operated by Chinese personnel.

seanmcdirmid 9y ago
That is because they are traded on foreign exchanges. Though ownership doesn’t really convey much control in this sense given the voting rights public share classes (mostly to conform with Chinese laws). They are still chinese companies even if they have foreign share holders.
polskibus 9y ago
Can you elaborate on the ownership structure of Baidu, Alibaba and Tencent?
- fspeech 9y ago
  Baidu and Alibaba are both listed in the U.S. I am not aware of Baidu but Softbank and Yahoo used to own the majority economic stake in Alibaba. Tencent is listed in Hongkong but a large stake is owned by a South African investor.
  - whatok 9y ago
    Both Baidu and Ali Baba are listed in the US in the form of depository receipts. You're not going to see any non-Chinese investor exert any meaningful influence over either of those companies as a result.
- yerich 9y ago
  Tencent, surprisingly, is 33% owned by the South African company Naspers, as well as 7% other foreign institutional investors. Alibaba is 30% owned by the Japanese Softbank and 15% owned by a US holding company resultant of Yahoo's sale. [2] Baidu is 35%+ held by a hodgepodge of funds and holding companies. [3] [1] http://www.4-traders.com/TENCENT-HOLDINGS-LTD-3045861/company/ http://www.4-traders.com/TENCENT-HOLDINGS-LTD-3045861/compan... [2] http://www.4-traders.com/ALIBABA-GROUP-HOLDING-17916677/company/ http://www.4-traders.com/ALIBABA-GROUP-HOLDING-17916677/comp... [3] http://investors.morningstar.com/ownership/shareholders-major.html?t=BIDU http://investors.morningstar.com/ownership/shareholders-majo...

ztratar 9y ago

You sure do care about US national security a lot for having the username "Canada" :) I think your argument makes some sense, but I don't think the world needs an escalation of isolationism. Isolationism breeds war, and it only escalates significantly when multiple nations take part.

Canada 9y ago
We're using these services too, and we can say whatever we like about American politicians or policy. No problem. On WeChat we better watch what we say about the Chinese government or any of the issues it deems sensitive. I don't like isolationism either, but in this case I believe it's justified.

FLUX-YOU 9y ago

Or real estate, for that matter.

SurrealSoul 9y ago

How far would this extend to? For example Tencent owns League of Legends, a widely used video game in the US (or even, globally) with a communication tool? What if WeChat just suddenly gets popular in the US? What should the US do in that situation?

komali2 9y ago
WeChat is enormously popular in the US. Every Chinese person here uses it. That means a huge number of US students and employees. I think the US should pass and aggressively enforce anti-snooping laws. No company allowed to monitor communication of customers over whatever platform that company is selling (unless the product requires it or that IS the service - some sort of Mood Analysis API or whatever). Would also conveniently take care of a key net neutrality point :)
- mi_lk 9y ago
  As popular as Chinese community in the US. I still don't know of anyone who doesn't speak Chinese use WeChat.
  - komali2 9y ago
    But that's still a lot of Americans, regardless of the language they speak.
- seanmcdirmid 9y ago
  My wife uses it also, just no one outside of the Chinese sphere of influence does. It also has no functions outside of china beyond chat, you can’t even use it to buy things at merchants who accept it (mostly spots where Chinese tourists go) unless it’s connected to a chinese bank account (so not for daily usage).
- dionian 9y ago
  yeah, part of the reason is so popular its one of the few platforms not banned in PR China because the state maintains full control over censorship...

matte_black 9y ago

Why block an opportunity for a country to better understand our culture through the monitoring of our social media communications?

kuschku 9y ago

> No Chinese firm should be permitted to own a controlling interest in any communication system widely used in the US. That can backfire very quickly, when Europe is going to say the same – no US firm should be permitted to control any system widely used in the EU. Which would kill Google, Microsoft, and many more.

hobofan 9y ago
(Playing devils advocate to some degree:) And maybe European states should. The USA and China (maybe Russia to some degree too) are the only states that have control over the main tech players whose products are used by their population. If there ever were to be a war-like scenario again with internet embargos for Europe, the internet would be a very empty space, smartphones would degrade to next to useless bricks and businesses that switched to the cloud would lose their IT backbone.
Chaebixi 9y ago
>> No Chinese firm should be permitted to own a controlling interest in any communication system widely used in the US. > That can backfire very quickly, when Europe is going to say the same – no US firm should be permitted to control any system widely used in the EU. China is a somewhat special case, though. It's an explicitly authoritarian oligarchy that have a proclivity for censorship and control. They should get more scrutiny from other liberal regimes than the US. Though, if Europe wanted to disadvantage US communication products, I think they'd have a more than enough justification by citing NSA mass surveillance.

guelo 9y ago

I would fully support this. And would extend it to News Corp which is Australian-owned and owns a huge chunk of our media including Fox News and the Wall Street Journal and is a much more insidious influence on our politics than Russia could hope ever hope to be. The first amendment only applies to Americans.

SamReidHughes 9y ago
Murdoch is an American.
- guelo 9y ago
  Oh. Murdoch "became a naturalized U.S. citizen (and as a result, gave up Australian citizenship) in 1985 to satisfy the legal requirement for U.S. television ownership"
dragonwriter 9y ago
> The first amendment only applies to Americans. No, the first amendment (like the bill of rights generally) applies to the actions of the US government; it does not apply only when those actions effect US citizens.

seanmcdirmid 9y ago

I’m not sure how an app mainly used by millennials for very social purposes is going to be a security problem. Tencent acquiring it would not be a problem. The USA is not China, it is a much more open market that has no qualms about “taking your money.” Ya, we aren’t going to sell them anything that gives them tech they don’t have already (high end fabbing or jet turbine production), but snap is much more of a business idea than a technology.