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Facebook and Twitter on why they 'are not doing business in China'

Krystal Hu
Reporter

The Senate Intelligence Committee didn’t just grill Silicon Valley executives about Russian meddling. They also wanted to know how they are dealing with China.

During Wednesday’s hearing, Sen. Joe Manchin (D-WV) asked why Facebook and Twitter don’t do business in China, the second largest economy in the world.

“The Chinese government has chosen not to allow our service in China,” said Sheryl Sandberg, COO of Facebook. “You know we’ve been open about the fact that our mission is to connect the world and that means it’s hard to do that without connecting the world’s largest population. But in order to go into China, we would have to be able to do so in keeping with our values. And that’s not possible right now.”

“When we were blocked, we decided that it wasn’t a fight worth fighting right now. We have other priorities,” Twitter CEO Jack Dorsey added.

In July, Facebook got an approval to open a subsidiary in the eastern province of Zhejiang in China, to set up an innovation hub. But the Chinese government quickly withdrew that approval. Twitter never bothered to penetrate mainstream in China, where a similar social media platform, Weibo (WB), dominates.

An empty chair reserved for Google’s parent Alphabet, which refused to send its top executive. (AP Photo/Jose Luis Magana)

“I think both of you should and your company should wear it as a badge of honor that the Chinese Communist Party has blocked you from operating in their country,” said Sen. Tom Cotton (R-Ark.). He went on to blast Google senior executives’ absence at Wednesday’s hearing, criticizing the internet giant for terminating cooperation with the American military while reportedly developing a censored search engine for China.

“Perhaps they didn’t send a witness to answer these questions because there is no answer to those questions and the silence we would hear right now from the Google chair would be reminiscent of the silence,” said Cotton. Other senators used even harsher terms to criticize Google’s absence. Sen. Marco Rubio (R-FL) pointed out the empty chair on Google’s seat and said, “maybe it’s because they’re arrogant.”

Google offered to send its Chief Legal Officer and Head of Global Affairs Kent Walker but the Senate Intelligence Committee rejected Walker as a witness stating that he was not high-level enoughJohn Hennessy, chairman of Google’s parent company Alphabet, defended the company’s decision to send Walker on Tuesday. “I think Kent Walker was the right person to go,” Hennessy said on Yahoo Finance’s live show The Final Round. “Perhaps people don’t realize it — He sits in every single board meeting, operates at the highest level of the company and is responsible for its global brand, and image, and legal advice.”

Twitter shares (TWTR) slumped 6% at market close Wednesday, while Facebook (FB) shares dropped 2.3% and Alphabet (GOOGGOOGLshares slipped nearly 1%.

Krystal Hu covers technology and economy for Yahoo Finance. Follow her on Twitter.

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