Don't Bogart My Blog: Bits: Navigating the Chinese Minefield

View in browser|nytimes.com

For the latest updates, go to nytimes.com/bits

October 11, 2019

An Apple store in Beijing. Apple removed an app from its App Store after the Chinese government objected to its use by protesters in Hong Kong.Gilles Sabrié for The New York Times

By Erin Griffith

Each week, we review the week's news, offering analysis about the most important developments in the tech industry.

Hello, Bits readers, I'm Erin Griffith, a tech reporter filling in from New York. Here's what happened this past week in tech:

The Chinese government has increased pressure on foreign companies that don't toe the party line on protests in Hong Kong. That has created a minefield for American companies, Amy Qin and Julie Creswell wrote. First, the National Basketball Association apologized to China after a team executive tweeted support for the Hong Kong protesters. Despite the apology, some Chinese sponsorships, broadcasts and preseason games were canceled.

Then Activision Blizzard, the gaming company, suspended a professional e-sports player for voicing his support for the protesters, saying it damaged the company's image. The move prompted a vigorous backlash from fans and lawmakers. And a group of Blizzard employees staged a walkout to protest the company's move.

Chinese media also attacked Apple for approving an app that lets Hong Kong protesters track police officers, leading to calls for a boycott of its products in China. On Wednesday night, Apple said it was withdrawing the app, HKmap.live, from its App Store just days after approving it because the authorities in Hong Kong said protesters were using it to attack the police.

That's all in just one week. Nike, Tiffany, Riot Games, Marriott, Zara, Delta and many others have also complied with China's requests.

I should note that one American group was defiant. The television show "South Park" issued a searing mock apology last Monday after it was banned from the country: "Like the N.B.A., we welcome the Chinese censors into our homes and into our hearts. We too love money more than freedom and democracy." Ouch.

The escalation is set to the backdrop of an increasingly tense trade war. Writing for Opinion, Farhad Manjoo argued in a column that dealing with China wasn't worth the moral cost.

Facebook's political ad conundrum

Facebook's decision to not ban ads that spread political lies set off a fiery debate about whether the social media giant is shirking its democratic responsibilities.

The company gave the O.K. to an ad from the Trump campaign that falsely claimed former Vice President Joseph R. Biden Jr. offered Ukraine $1 billion in aid if the country pushed out the man investigating a company tied to Mr. Biden's son.

Cecilia Kang wrote that Facebook's decision, which was criticized in many circles, was further evidence that the company did not want to weigh in on political fights that would make it look like it was siding with one party.

Facebook isn't the only company to agree to run the ad. Twitter and YouTube also said it did not violate their policies.

Some observers supported the move, arguing that making political ads available to public dissection was more democratic than censorship. But others said it was "empowering propaganda," a craven play for ad dollars, bad for democracy and "toxic." Some called for regulation, and others pointed out contradictions in Facebook's policies. Chris Hughes, Facebook's co-founder, said the policy was the equivalent of siding with President Trump.

People haven't been willing to give Facebook the benefit of the doubt for years now. That doesn't appear to be changing anytime soon.

Start-up change of heart

In light of weak receptions for the initial public offerings of the highest-profile start-ups this year, a new gospel is spreading among Silicon Valley start-ups: Profits are cool!

In a novel shift, venture capitalists and start-ups are beginning to focus more on business fundamentals over cash-burning, top-line growth. It's especially true for companies with untested business models, including gig economy start-ups or those disrupting old-line industries like real estate, orthodontics and exercise bikes.

If this feels a bit familiar, it's because start-ups have undergone a "pivot to profit" moment every few years for more than a decade. In 2014, there were predictions of "dead unicorns" and markdowns from mutual fund investors. In 2016, venture investors warned start-ups to raise money before the market closed. And most famously, in 2008, Sequoia Capital presented a dire slide deck, titled "R.I.P. Good Times," designed to scare founders into preparing for the recession.

But despite a few blips along the way, things have gotten only bigger and more bubbly in the enchanted forest of start-up unicorns. Even the recession of 2008 didn't hit the tech industry that hard. Will this moment of austerity last? Investors are hopeful. But if recent history is a guide, I'm not holding my breath.

Some stories you shouldn't miss

The Trump administration has been trying to protect tech platforms like Facebook, YouTube and Twitter from regulations overseas by including protections for them in trade deals.
India's internet and phone blockade in Kashmir means there's no way to call the doctor, leading to preventable deaths.
A shooting in Germany was live-streamed on the social media platform Twitch, which is owned by Amazon.
Tesla's self-driving Autopilot feature could save lives, but it has already been blamed for ending several. The ethical trade-offs create a conundrum for the company and society, Bloomberg wrote.
Kevin Roose profiled PewDiePie, the most influential YouTuber in the world. He has been name-checked in mass shootings and accused of being a white nationalist. Writing for The New York Times Magazine, Kevin asked what PewDiePie really believes.
Here's an interesting rebuke of the tech industry's assertion that tech innovation and evolution are evitable. Writing for Vox, Rose Eveleth argued that it's time for the tech industry to question what progress means.