Facebook's China argument revealed in Mark Zuckerberg's hearing notes

Facebook Inc.’s Mark Zuckerberg was prepared to cite competition with China if asked whether the social-media giant should be broken up, according to a photograph of internal notes the chief executive officer took to a congressional hearing on Tuesday.

“Break Up FB? U.S. tech companies key asset for America; break up strengthens Chinese companies,” the document read, according to a picture published by the Associated Press.

Zuckerberg was speaking during the first of two days of testimony to Congress, after a data leak sparked the worst crisis in the company’s history. During a break, he left his notes and some journalists snapped pictures, including an AP photographer.

The memo also advised the CEO to highlight that Facebook is a small part of a much bigger advertising market, and to point out that consumers and marketers have choices. It provided a figure for Zuckerberg to cite, if necessary: that the overall ad market is worth $650 billion, with Facebook accounting for 6 percent.

Dominant Duo

Facebook and Google parent Alphabet got most of the digital advertising dollars in 2017

The document touched on roughly 15 topics in all, covering issues such as data safety, diversity, election integrity, disturbing content and who is accountable for past missteps. The most-detailed sections focused on Cambridge Analytica, the political-consulting firm that improperly accessed data on millions of Facebook users, and Apple Inc. CEO Tim Cook, who has criticized Zuckerberg recently.

Mark Zuckerberg at Congressional hearing (Photo: Reuters)

The advice on how to respond to calls to break up Facebook is particularly noteworthy because the company has grown to dominate the digital-advertising market with Google in recent years. There have been increasing calls for antitrust action against Facebook, but little talk of actually breaking the company up.

Facebook’s planned response — to cite rising competition with China — also contrasts with Zuckerberg’s efforts to woo Chinese officials to let the company expand in the country. The social network is now barred from the market along with many of its U.S. peers, which helps domestic social media titans such as Tencent Holdings Ltd. thrive.

During the hearing, Senator Lindsey Graham, a Republican from South Carolina, asked if Facebook has a monopoly. “It certainly doesn’t feel like that to me,” Zuckerberg replied.

Graham also asked Zuckerberg about regulation in Europe, where a new General Data Protection Regulation, or GDPR law, is about to kick in. Zuckerberg said he favors the right type of regulation.

His notes had even prepared him for this. In a section covering Europe’s GDPR, the document said, “Don’t say we already do what GDPR requires.” Instead, Zuckerberg was advised to highlight similarities, but also differentiate. GDPR “Requires consent,” it read. Facebook has “done a little bit” and is “now doing more in Europe and around the world,” the memo advised.

“Support privacy legislation that is practical, puts people in control and allows for innovation,” the document added.