“A Walled Wide Web for Nervous Autocrats” – WSJ.com

Evgeny Morozov has published a new book-The Net Delusion: The Dark Side of Internet Freedom. I just bought it, but I have read enough Morozov to be confident it is well-argued, controversial and important.

Today’s Wall Street Journal has an essay from Morozov based on his book. China features prominently. It is a must read:

The real Internet trade wars will begin once Russian and Chinese technology giants, with their poorly veiled government connections and piles of cash, come looking for American and European acquisitions. How will officials in Washington or Brussels react when China’s Tencent (with a market capitalization of $42 billion, almost twice that of Yahoo) or Russia’s Yandex makes a bid for AOL or Skype? [See this Quora question I posted a few weeks ago-Would US regulators allow Alibaba to acquire Yahoo?]

Painful decisions will need to be made soon. The Russian company Digital Sky Technologies, owned by a Kremlin-friendly oligarch, has a nearly 10% stake in Facebook and a 5% stakes in such hot Web properties as Zynga and Groupon. What will happen once Russian or Chinese firms seek to purchase a stake in companies like Google (a contractor to the National Geospatial Intelligence Agency) or Amazon (which caters to nearly 20 U.S. government agencies through its Web hosting services)?

The unpleasant effects of this rising nationalism are already evident in the case of hardware exports. When Sprint Nextel began considering bids from China’s Huawei and ZTE Technologies in 2010 for a projected $5 billion upgrade of its network, a group of American senators wrote to the company’s chief executive, expressing their concern that Huawei might be subject to “significant influence by the Chinese military” and that communications in the U.S. could be “disrupted, intercepted, tampered with, or purposely misrouted.” Sprint Nextel turned down the bids. The European Union recently announced plans to create an authority similar to the U.S. Committee on Foreign Investment to specifically vet approaches from China’s technology giants.

Even if they are spurned by the U.S. and Europe, China’s tech giants are likely to resurface elsewhere. For several years China has been using its huge cash reserves to hand out loans—mostly to governments in Africa, but also to neighbors like Cambodia—with the condition that those governments only do business with China’s telecom companies. With or without secret access to that data, the fact that China controls so much of the communications infrastructure in the developing world gives it political leverage.

Read the whole essay–A Walled Wide Web for Nervous Autocrats – WSJ.com.

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