Pompeo Calls Out Tech CEOs for ‘Incredulous’ Ignorance of Chinese IP Theft

July 30, 2020 Updated: August 1, 2020

Secretary of State Mike Pompeo called out big tech CEOs for claiming to U.S. lawmakers that they have no firsthand knowledge of technology theft from China, adding that such ignorance would seem “incredulous.”

“They need to get out more,” he said at a Senate committee hearing on July 30, adding that such Chinese threats have gone on for decades. “The idea that anyone in the tech space could not know of what the Chinese Communist Party is attempting to steal and the cyberattacks they’re making seems incredulous to me.

“It’s patently clear to anyone who’s watching that the Chinese are engaged in intense efforts of intellectual property theft, including to technology,” he said later at the hearing.

During a July 29 congressional antitrust hearing, the chief executives of four of the world’s top tech giants, Apple, Google, Amazon, and Facebook, gave a muted response when questioned by lawmakers on whether they believed Beijing was stealing U.S. technology.

“I don’t know of specific cases where we have been stolen from by the government,” Apple’s Tim Cook said. “I know of no case [of] ours where it occurred, which is, I can only speak to firsthand knowledge.”

Hearing of the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law on "Online Platforms and Market Power", on Capitol Hill in Washington
Witnesses Amazon CEO Jeff Bezos, Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai, and Apple CEO Tim Cook are sworn-in before a hearing of the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law on “Online Platforms and Market Power,” on Capitol Hill, in Washington, on July 29, 2020. (Mandel Ngan/Pool via Reuters)

Sundar Pichai, head of both Google and its parent company, Alphabet, similarly said he had “no firsthand knowledge of any information stolen from Google in this regard,” but later recalled a large-scale Chinese cyberattack in December 2009, weeks before the company pulled out from the Chinese market.

Jeff Bezos of Amazon, the wealthiest person in the world, said he hasn’t “seen it personally, but heard many reports of it.”

“Certainly there are knock-off products, if that’s what you mean, and there are counterfeit products and all of that,” he said when pressed by Rep. Greg Steube (R-Fla.). But “if the answer is the Chinese government stealing technology,” he said, “that’s the thing I’ve read reports of and but don’t have personal experience with.”

Mark Zuckerberg was the only one out of the four to directly address the issue. “I think it’s well documented that the Chinese government steals technology from U.S. companies,” the Facebook CEO said.

In an earlier part of the hearing, two lawmakers also asked Google why it chose to drop a $10 billion contract with the Pentagon to work on an artificial intelligence (AI) project in 2018, while still running an AI research lab at a top Chinese university in Beijing. The university also conducts AI research for the Chinese military. Pichai, in response, said that Google’s work in China is limited to “a handful of people working on open-source projects.”

Pichai said the accusation that Google was working with the Chinese military is “absolutely false,” and pointed out that Google began a cybersecurity project with the Pentagon in May.

The CEOs were silent when Steube asked for recommendations on how to protect U.S. firms from “aggression and government intervention abroad.” After waiting for 15 seconds and hearing no reply, Steube gave the floor to another lawmaker.

Big Tech CEO's Testify Virtually Before House Judiciary Committee
Rep. Greg Steube (R-Fla.) speaks during the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law hearing on Online Platforms and Market Power in the Rayburn House office Building, on Capitol Hill in Washington, on July 29, 2020. (Graeme Jennings-Pool/Getty Images)

China, the world’s second-largest economy, is a key manufacturing base for Apple’s iPhones. Amazon, however, gave up its local marketplace in China in April 2019 after struggling for years to compete with local e-commerce platforms.

And while the country remains the world’s top social media market, mainland Chinese users are unable to access Facebook and its properties, WhatsApp and Instagram, from behind the Great Firewall without special software.

At the July 30 hearing, Pompeo noted that Beijing could take advantage of international firms’ desire to enter the Chinese market to censor American speech.

“It’s sometimes the case—you hear it privately—because there’s continued threats made against their businesses that are operating not only in China, but … working in other parts of Asia and Southeast Asia as well,” he said. “The Chinese Communist Party is completely willing to bully and to threaten to get these companies to behave.”

Apple has come under fire for removing thousands of apps from its Chinese App Store upon the Chinese regime’s requests. In a recent case in October 2019, it pulled a crowd-sourced app that offered real-time updates about the Hong Kong protest movement. Around the same time, the company also came under criticism for sending iPhone and iPad users’ web browsing data to Shenzhen-based social media giant Tencent.

Gary Bauer, commissioner at the U.S. Commission on International Religious Freedom, previously urged U.S. companies against supplying technologies to the Chinese regime and potentially contributing to its human rights abuses.

“Tech companies need to remember that they are American tech companies. And they should be sensitive to the values that we stand for,” he said in a recent interview.

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